The name Sydney Yoshida might not ring a bell for many business people but, it must…because this man opened the eyes of the world to a very important phenomenon in the world of work. A person does not have to do too many great things to receive the necessary recognition. One powerful act or work should suffice for one to be acclaimed in this life. Based on that, Sydney Yoshida deserves a lot of recognition.
In 1989, Sidney Yoshida conducted a study at Calsonic Kensei, a large Japanese automotive parts manufacturer. He asked a cross section of the employees to note all the significant problems in the company that they were aware of. What the study found was quite interesting, to say the least.
The study which became known as, “The Iceberg of Ignorance”, found that the top level of management of the company was only aware of a mere 4 percent of the problems in the company. General supervisors were aware of only 9 percent of the problems facing the company. Supervisors knew about 74 percent of the problems. Meanwhile, the front line employees of the company were aware of 100 percent of the problems.
It was evident that the higher up one goes on the ladder of the corporate leadership, the less one knew about the problems facing the organisation. From the top, just a tiny fraction of the organisation’s challenges could be seen-just the tip of the iceberg. This study proved something that many workers have known all along, and that is the fact that, those perched at the very top of the corporate ladder have very little idea about what was actually going on.
It is not hard to see that the findings of this study have serious implications for the management of any organisation. As we all know, management of every organisation has to do with what we call Internal Customer Service. Internal Customer Service, by extension, has a very direct effect on the way an organisation treats its external customers. In short, this study should be of immense interest to any organisation that wants to be known for the best in customer service.
To be known for best customer service, an organisation must know how to treat its customers like royalty. Customers must walk away from every encounter with the organisation feeling good about the interaction. Customer satisfaction is said to have been achieved when the customer’s expectation are either met or exceeded. One way in which any business would know if it is matching up to customer expectation is through customer complaints. Customer complaints are great source for ideas to improve what the organisation is offering. Microsoft’s Bill Gates says, “Your most unhappy customers are your greatest source of learning.” In other words, an organisation cannot do without the complaints (or views) of those it intends to serve.
However, the interesting thing about customer complaints is that they are a rare commodity on the market. Far less customers complain as compared to those who just prefer to walk away. The statistics are quite varied but all quite serious. Service experience consultant, Ruby Newell-Legner, states that a typical business would hear from only 4 percent of its dissatisfied customers. This means that more 9 out of 10 would simply refuse to complain about a bad experience. Close to that same number that refuses to talk would also walk away and never return.
Another piece of statistics from the White House Office of Consumer Affairs stated that “For every customer who bothers to complain, 26 other customers remain silent.” That is approximately 3.7 percent of customers, which is in line with the 4 percent stated by Newell-Legner. If one compares the figures about customer complaints and the figures from Yoshida’s Iceberg, then the picture becomes a lot more worrying, especially for managers.
Very few customer complaints reach the organisations as a whole. The very few that get through, i.e. the 4 percent, are also lodged with the front line managers. So, assuming the 4 percent formed the 100 percent of complaints that the front line managers receive, then what it means is that those at the very top are going to receive just 4 percent of 4 percent of the complaints and grievances of the customers. I hope you get the picture? Definitely, then, the Iceberg of Ignorance can really sink a Titanic of an organisation!
The concept of the Iceberg of Ignorance should ginger every business leader, owner, or manager, to put in place systems and structures that would ensure that, even if the iceberg is not turned upside down, something drastic is done about it. To put it bluntly, top managers must actually dive deep down to the depths of the organisation to fish for that 4 percent. That 4 percent is not going to float up to the top. This calls for a drastic change in strategy.
One of the first things that top managers must do is to ensure that they create a culture that enhances a free and open communication. Management must lead the way in creating that atmosphere where people are not afraid to express themselves. In a culture of silence, as is seen in many organisations in this country, people tend to hold on to valuable information for fear of getting themselves into trouble. This information could be a customer complaint. If a customer complains to a front line manager about something and this manager knows that her boss would not be too pleased with what the customer has said, chances are that the front line manager will keep the information to herself. Why should she come out and say something if it would only get her into trouble?
The culture of the organisation must also be one where punitive measures are not always the first port of call in dealing with situations. When an individual knows that he or she would be punished if the customer complaint is his or her fault, there is very little chance that the one will come forward with the complaint. An organisation with an open culture where customer complaints are well-received without any negative undertones is also one that has the greatest potential to thrive in the market.
Beyond the culture, it is also important for front line managers to be trained in spotting customer concerns before those concerns turn into complaints. Managers must learn to listen, not only to the words customers say, but must be able to read between the lines to know what is actually bothering customers.
In my experience, there are times when a customer might complain but, he or she would do so in such a polite way that a front line staff might not really recognise the statement as a complaint. When front line employees become skilled in the art of identifying customer complaints, a vital first step in the customer complaint handling strategy would have been achieved. A system must also be set up to ensure that the complaints identified or received are also recorded. When all that is available are people’s accounts of what a customer said or did not say, there is the potential of the issues being lost in translation.
The next step after that is to ensure that front line employees have easy access to the top. There is no use in training people on how to easily identify potential customer concerns, record these complaints and not have the information passed on to the relevant top managers in time. The information must also be passed on regularly.
So, long as human beings are manning the front lines, it is to be expected that some information would get swept under the rug. It is, therefore, imperative that top managers make themselves accessible to their customers. There was a time when a managing director of a bank provided a personal phone number to be placed in all the branches of the bank so that any customer with any complaint can call and register that complain directly to him.
I am aware that there are many managers who would cringe at the thought of having to pick calls from customers. Some would say they have better things doing and besides there are people who are being paid to handle such issues. That would be a sad thing to say. What is more important than talking to the people who are the main reason the business is in operations in the first place? Great managers have a way of balancing their “more important” things to do with making themselves visible to both their employees and customers.
Among the things every top manager must be able to do is to be able to have information coming from the base of the organisation, i.e. the shop floor. It does not pay to be holed up in an ivory tower and not have sufficient clues as to what is happening on a day-to-day basis. Any manager who sits on top of an organisation with the isolationist mind-set would be akin to a ship captain who makes vital decisions on the course of the ship’s direction based on just the size of the tip of the iceberg. On most occasions, at the time that the full size and expanse of the iceberg comes into view, it would be too late for the ship to make a turn and then disaster strikes.