The Hindu Business Line : Great performance can kill your business!

AH, how? The answer is in, The Paradox of Excellence, by David Mosby and Michael Weissman, from Jossey-Bass (www.josseybass.com). The paradox that the book speaks of is that "the better you do your job, the more your performance becomes invisible" because "improved performance does not necessarily translate into higher perceived value". Which is what companies that have successfully implemented improvement initiatives `in a quest for sustained market leadership and lasting value' find themselves in: Sliding customer base, even as the company becomes more efficient but invisible in the bargain!

"Try not to become a man of success but rather a man of value," said Albert Einstein. With this quote begins the intro where the authors speak of the value struggle. They then weave their ideas through a story that opens with Premiere Specialty Trucking, a mid-sized logistics company, losing it major customer MacroZip, accounting for 20 per cent of revenue. The news comes as a big shock to Hank Peters who lives by the motto `Excellence Delivers Victory'. Tom, the new VP sales wonders if he has to sell his new house, and start looking for a job again. "We blew it when they had needed us to come through the most. They feel like we lied to them — like we misled them. Now they don't know why they ever trusted us," explains Ryan, the sales rep, about how Premiere had botched up the last shipment of MacroZip.

At the management meeting, Carolyn, VP operations is puzzled how the customer can terminate the trucking services despite a 99.97 per cent performance that Premiere had achieved. "This is our first missed shipment in over nineteen months and only the third in three years," she defends. Meanwhile, Gary of Macrozip sounds to Tom that he may continue to do business with Premiere at 30 per cent discount. But Anne, who is in charge of Premiere's information systems, finance and HR is aghast. "We don't have those kinds of margins," she tells Hank.

Late evening, at the bar, Tom learns from his best friend Vijay Patel that as VP he has to get used to problems like this. "If you don't figure out how to duck, you'll be looking for work," advises Patel. The next day, after analysing the problem, Tom realises, "We aren't providing any data to our customers that actually prove we provide excellent service." Hank seeks help from Sam, his financial planner, and the two go golfing with an old couple, Darryl and Nancy. During the game, Hank learns that he is faced with a paradox.

"The paradox of excellence is this: As our performance improves, we become more invisible to our customers — to everything but bad news. As a consequence, customers lose sight of the true value we deliver because they forget the problems we eliminate," explains Hank at the staff meeting.

Carolyn discovers two dimensions of the paradox, performance and perception. "We spent a lot of time on the first box and not enough time on the second... We need to raise the visibility of our performance," she reasons. Over the phone, Sam counsels Hank on the importance of providing customers with the right context to do an evaluation, rather than forcing them to figure out the context, which in most cases may be `the heat of the moment', the most recent anomaly. "If we allow our customers to define the criteria by which we're evaluated, we give them too much control over how they view us," understands Hank.

Premiere's conference hall turns into a war room with everyone putting his or her head together to find how the company's service providers deliver value. Tom remembers how in Albertson's, the grocery chain, they hand you the receipt, circle the amount you saved and say, "Mr Peters, you just saved $7.31 with your Preferred Card. Have a great day!" How Google reinforces the completeness of the service by telling you "how many web sites they found and how quickly". How at Weight Watchers, "you get positive reinforcement for every five pounds you lose, and you also get a golden key when you achieve your goal weight". And how Dell establishes an expectation and then beats it; "they told me it would a week to arrive, and it showed up two days later," says Carolyn about the new monitor she had ordered.

Of immense value is `the roadmap for success' towards the end of the book, where the authors speak of `The Continuous Visibility Wheel' with its five distinct phases, viz. "discover the expectations; define and select your distinguishing value; select the metrics to be made visible and the best manner in which to present that information; uncover the best source of data to use; and deliver the information needed to keep your value in the minds of your customers and your employees." A book that can vastly help in business and also in relationships.

ManageMentor@TheHindu.co.in

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