книги / PRactice Book
..pdfMessage machine creates a buzz By Bernard Simon
Like Google in search engines and Hoover in vacuum cleaners, Research In Motion (RIM) has achieved the distinction of having its product turned into a verb. Almost 3m people around the world now "BlackBerry" their friends and colleagues with messages using the Canadian company's distinctive hand-held device.
The BlackBerry has transformed RIM over the past six years from an obscure supplier of two-way pagers into the maker of one of the world's hottest products. RIM reported earlier this week that it had signed up 470,000 new subscribers in the quarter to February 29; it expects to add more than 500,000 more over the next three months. RIM shares have rocketed from less than $10 in autumn 2002 to $73 this week. The company now has a market value of $14bn, (£7.5bn), overtaking Nortel Networks as Canada's technology superstar. Not surprisingly, RIM's success is attracting attention from some of the giants of the communications and software industries, and observers are wondering how long the company can sustain its phenomenal record. The BlackBerry - whose name comes from the supposed resemblance of the miniature keyboard on its original device to the beads of the fruit - "remains the preeminent mobile messaging solution in the market today," says Jason Tsai, analyst at ThinkEquity Partners, an investment bank.
RIM has so far kept the competition at bay with a canny, three-pronged strategy: expanding its target market, co-opting potential rivals as partners and customers and constantly adding fresh features to the BlackBerry device and its supporting software. The BlackBerry began life as a gadget for Wall Street investment bankers, Washington politicians and corporate executives. More recently, RIM has turned its attention to the professional consumer retail market, which now makes up about onefifth of its subscriber base.
RIM has vastly broadened its market by licensing almost 100 distributors, including Vodafone, Verizon Wireless, Cingular Wireless and T-Mobile. RIM expects to sign up China Mobile Communications later this year. To make the devices more affordable, many carriers offer BlackBerry contracts similar to those for mobile phones. According to Mr Tsai, "the carriers love BlackBerry not only for the higher average revenue per unit it generates, but for the strong margins, since it consumes very little bandwidth." Unlike some other companies, RIM has not jealously guarded its technology, seeking out alliances with friend and potential foe alike, including Microsoft. "If you partner well and thoughtfully, you get pulled along by the current," says Jim Balsillie, RIM's joint chief executive.
The question is whether RIM's success will ultimately jeopardise its independence. Mr Balsillie and RIM's founders Mike Lazaridis and Doug Fregin own only about 16 per cent of the company stock in total. Brant Thompson, analyst at Goldman Sachs, singles out Nokia and Motorola as possible predators. Alex Slawsby, an analyst at International Data Corporation, the research group, says that "there are many different companies with designs on being an alternative to RIM". In his view, the BlackBerry's biggest advantage is an intangible one. For the time being, he says, none of its rivals possesses "that buzz creating element that the public loves".
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More about results than time By Philip Manchester
On the surface, flexible working might seem to be about people being able to choose their working hours and, perhaps, spend some time working away from the office. But it is also a fundamental change in the way people work -and, more importantly, the way they are managed. Flexible working is a shift from "time-based" to "results-based" working practices and could herald the biggest change in the workplace since the start of the industrial revolution.
New employee legislation is one of the main motivations for employers to introduce flexible working practices - but not the only one. In Europe, for example, employers are obliged to offer parents with young or disabled children the right to request flexible working. While legislation is a major catalyst to introducing flexible working, there are other reasons. In the US, for example, the fall in the price of mass market computer and communications technologies is encouraging organizations to allow more home working.
Flexible working is also likely to appeal to a wider skill pool and help with staff retention. Mary Sue Rogers, human capital management leader at IBM Global Services, says that IBM has embraced flexible working to help with recruitment. "In Europe, companies have to provide flexible working because of legislation -but it is also a way to recruit from a broader skill pool, including women and older people. With an ageing workforce we have to find ways to retain older staff. It also gives greater scope to male employees who increasingly want flexible working to create a better work/life balance. A recent survey of UK graduates found that work/life balance was third on their list of career priorities." She adds that 55 per cent of IBM's employees work flexibly and 90 per cent are "enabled" to do so. "To us, it is foremost a business imperative. It is about staff retention, increased productivity and cost reduction," she notes.
A survey of 300 UK human resource professionals in small to medium-sized enterprises (SMEs), commissioned by Arizona-based telecommunications company Inter-Tel, found that 40 per cent found it difficult to attract the right skills from their local market and 30 per cent thought they could attract staff if they were offered flexible working. But they also had significant reservations - with 93 per cent concerned that staff were more likely to bend the rules if they work from home. Doug Neal, research fellow at the US Computer Sciences Corporation, identifies this attitude as being at the heart of the cultural shift prompted by flexible working: "The problem is not all with the worker - it is also with the boss. Management has to find a way to measure 'results' rather than time. We have to find new ways to evaluate workers - and their bosses." He adds that organizations must find ways to build trust between employer and employee: "How do I evaluate people when I can't see them? In formal terms, trust is the outcome of a series of beneficial transactions. You have to build a culture of trust from working together."
Although new legislation is forcing organizations to adopt flexible working practices, there are sound business reasons to give employees more flexibility. Organizations which have embraced flexible working have found that it can cut costs and improve productivity. More importantly, it enables them to recruit staff from a
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much broader skill pool and retain staff. But it does mean a fundamental change in no the relationship between staff and management. Both must learn to trust each other and focus on results rather than time spent in the office.
How to engage your employees
By Michael Skapinker
Ade Sodeinde, a 17-year-old Nigerian, became famous last week for making some of Britain's trains run on time. Ms Sodeinde, in her year working for Central Trains before going to university, solved the puzzle of why trains leaving the depot ran late. She found that the tracks in the depot needed upgrading and were slowing the trains' journeys to their starting platforms. Drivers and conductors also had to wait before boarding because of the time taken for safety inspections and cleaning. By refurbishing the tracks and reorganizing inspection and cleaning, Central was able to eliminate the problem, potentially saving itself £750,000 ($1.37m) a year in fines for late running - and vastly reducing passenger frustration and delay. Ms Sodeinde will no doubt be in great demand when she graduates. But just how large, established companies persuade employees to put in that extra effort is one of management's great puzzles. Staff know where the problems and opportunities lie and there will always be employees with ideas for new products or better service. All it requires is for them to speak up and for someone to listen. Most companies say they listen to their people - but as managers are often unhappy to have their current strategies disrupted and new ideas get trapped in corporate bureaucracy, would-be innovators become jaded, and cynical.
Yet there is a link between engaged employees, satisfied customers and corporate profitability, according to a recent study by the Forum for People Performance Management & Measurement at Northwestern University. The Forum studied 100 US companies to find out how engaged their staff were and whether this had any effect on corporate profitability. The Northwestern researchers wanted to look at employees, such as Ms Sodeinde, who did not deal directly with customers. What impact did their attitudes have on the company's success? Well, the results were clear. The companies with the happiest and most engaged employees had the most satisfied, highest-spending customers.
So how do you make employees more engaged and content? Roger Martin, dean of the Rotman School of Management at the University of Toronto, argues that people are happiest not only when they are respected members of a team they admire but when the team and the company are respected by the world outside.
Being part of a trusted, honest group is an indispensable component of employee happiness and engagement. So is establishing ties with colleagues you respect. When groups appear to be performing, companies should hesitate before disrupting them. The vogue for forming new teams for each task may work in companies small enough for everyone to know each other. When people constantly have to establish new links of trust, customers will probably suffer. Companies should think hard, too, before they outsource the work of a functioning team. The company you outsource to may be a happy, engaged bunch, but I would not count on it.
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One strike and you're down By Richard Gillis
"Companies forget that staff have the power to wreck the brand." This warning comes from Martin Langford, a corporate reputation specialist. But brand owners that probably don't need reminding of this include British Airways, Royal Mail and Jaguar, because of the high profile which staff industrial action, or threats of industrial action, has assumed at all three.
Management at large organizations do not embark on widespread and risky company restructurings unless they believe their businesses are in straitened financial circumstances. And the potential long-term damage to company branding that can be done if staff and managers clash publicly over plans will almost always take a back seat to other priorities, such as getting the business back into profit. Nevertheless, brands are a key part of the intangible assets that are playing an increasingly important role on company balance sheets. This means that it can be a serious issue for any business if its brands emerge as tainted in the long term by strikes and other industrial conflicts. If this is the risk, how can corporations or other branded organizations reduce this danger? Langford estimates that about a third of his clients' problems with respect to this risk are caused by the behavior of their staff; with industrial action and disaffected workers being the most common examples.
John Williamson, board director of brand consultants Wolff Olins, says: "Poor industrial relations do not come about in isolation. They reflect on the business as a whole and the way in which it is being managed. If the management thinks the brand is something done by the marketing communications department, this makes for very poor brand strategy."
The danger here for service companies is that the impression of the brand given to the customer is often dictated by the behavior of staff at the bottom of the organization hierarchy. And, in the maelstrom of media activity that goes with major industrial action, the senior management can develop the habit of briefing journalists before their own staff. This has a direct impact on the quality of the service.
"Brands represent the value of the organization’s relationship with its customer. It's the one thing a competitor cannot copy," says Brenda Banks of insurers Aon, which works with clients on the issue of brand risk. Companies are not able to insure against declines in brand value, but often compound the problem by not managing the risk to their most valuable asset. "Reputation risk only comes home to roost when things go wrong."
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Online shopping expected to grow by 35% this year By Elizabeth Rigby
Consumers are expected to spend 35 per cent more buying a host of items from clothes to CDs online this year, taking total spending for 2005 to an estimated £19.6bn, according to the Interactive Media Retail Group. In its first annual report, published today, IMRG said it expected 4m more Britons to shop online this year, taking the total shoppers to 24m, more than half the UK's adult population. The latest figures underline the sharp growth of internet shopping in the decade since 1994. While internet shopping accounted for just £300m of retail sales in 1999, by 2004 consumers were spending £14.5bn online, according to IMRG.
Online shopping is also counteracting sluggish consumer spending on the high street. Household expenditure grew by only 0.2 per cent in the fourth quarter of 2004. "For a sector to have grown from scratch in ten years with very little investment suggests that the internet's time has come," said James Roper, IMRG chief executive.
The larger retailing groups -Kingfisher, Argos, Dixons, Tesco and Boots - are spending money on developing their internet offering, but many retail chains are not investing in online shopping, which in turn is allowing entrants such as figleaves.com, which sells underwear, and asos.com, the clothing e-shop, to gain a foothold in the market. In 2004, the IMRG estimated that the top 100 retailers in the UK spent just £100m on their internet presence - and most of this came from a handful of stores. But in spite of the neglect from big retailers, the growing popularity of online shopping looks set to continue as more people gain access to the internet.
Figures out from 2004 from Ofcom, the communications regulator, showed that more than 56 per cent of homes had internet access, with a third of those having a broadband connection. The emergence of mobile commerce technology could also mean that people will be able to shop online from their mobile phones.
IMRG said electrical and clothing goods were experiencing strong growth online, with more than £2bn of electrical goods sold over the internet in 2004. Dixons, the high street electrical retailer, expects its online sales - currently at £170m - to hit £lbn in the next five years. Meanwhile, clothing is another big expansion area, with sales growing 37 per cent to £644m in 2004.
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Virtual teams: Global harmony is their dream By Sarah Murray
If managing diversity in the workplace is a tough task for business leaders, the challenges of keeping executives from different back grounds working together efficiently in various parts of the world is even more difficult. "One of the things you should take into account is whether your team includes members who don't speak English well," says Joanne Yates, a professor of management at MIT Sloan, who has studied the use of communication and information systems in companies. "Any good virtual team has a communication plan that includes weekly conference calls or e- mail check-ins, but with a virtual team where not everyone speaks English well, the regular report-ins should be in written mode rather than by phone or conference call."
The other advantage of e-mail communications is that, for those working in different time zones, group messages can be responded to when it is convenient, reducing the need for early morning or late night calls. At the same time, using e-mail can remove much of the hierarchy of professional communications, since many executives find it far less intimidating to send an e-mail to someone in a senior position than to telephone them.
However, cultural or behavior al differences that can manifest themselves in face-to-face working situations can be exacerbated in virtual team working, particularly when the group has members from different backgrounds. One reason for this is that, when one is physically immersed in a new culture, it takes less time to adapt to the social norms and become aware of cultural sensitivities. So those trying to do this at a distance may find it tougher to fit in, increasing the potential for misunderstandings between team members. "You don't build the relationships in the same way as you do working face-to-face," says Martin Galpin, managing psychologist at Pearn Kandola, a UK 60 based research business and consultancy of occupational psychologists.
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Team-building for charity brings tears to my eyes By Sathnam Sanghera
British managers from John Lewis, the privately run retailer have released a music album for charity. The worthwhile cause is Whizz-Kidz, a charity dedicated to helping "non-mobile children". And the record in question is entitled New Shop On the Block. These managers were given the task of composing, arranging, producing and recording the LP as part of a team-building exercise, the aim of which was to bond them in a "powerful collective experience". As he gave me the CD, the man from the training company that organized this "Face the Music" exercise for John Lewis remarked that the task had "created one of the most highly bonded teams" he had ever come across. It was also "very deep" in terms of the changes it made in them. "The managing director involved in the project was crying by the end," he explained. A couple of hours later, when I played the CD for the first time, I understood exactly what he meant. The record made me want to weep too. And it wasn't just the awfulness of the music that upset me. It was also the fact that "Face the Music" marked a worrying trend in team-building exercises.
Once upon a time, people just came to work and bonded by "working and getting along with each other". Sometimes they would "go for a drink after work", "play football on Saturday" or "go for dinner at the weekend". But, generally speaking, team-building was a casual, natural, informal thing.
Then, in the 1980s, the business world decided that the only way of establishing a rapport between colleagues was by getting them to do group activities together - preferably on weekends, preferably outdoors and preferably in the rain. The idea was that workers would become immersed in an activity, learn new skills together and become closer-knit as a result. A search through the cuttings shows that, over time, businesses have asked employees to participate in every group activity under the sun in the name of team-building: paintballing, mountain climbing, Porsche racing, sailing, horse whispering, clowning, treasure hunting, potholing, go-karting, cookery, international folk dancing, wine blending - and, my own favorite, motorized toiletbowl racing.
While such exercises are generally useless, as most take place behind closed doors or in the middle of nowhere, they are also mostly harmless. However, exercises such as "Face the Music" represent something new and ominous. Unlike paintballing and motorized toilet-bowl racing, these "multisensory experiences" require an audience.
And if there is one thing more excruciating than being involved in a teambuilding exercise, it is watching or enduring someone else's team-building exercise. I speak from experience, having listened to New Shop On the Block three times. John Lewis may defend the release of its atrocious album by saying it will raise money for a good cause. And the charity element is certainly a mitigating factor. But I suspect that the people who have heard it would give even more generously if their donations meant they would never have to listen to New Shop on the Block ever again.
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Balance between cost control and service By Keith Rodgers
One of the problems in dealing with customer service calls is that you can never be sure whether they're going to end up as a net cost or generate additional revenue. The more people you employ to handle incoming calls, the greater your overheads, yet the better you're able to satisfy a customer, the greater your chances of selling them something else. To achieve a balance between cost control and quality of service, many leading telecoms and software suppliers are now applying the lessons they have learnt in larger businesses to the small-to-medium-sized enterprise (SME) market.
Relatively simple telephony techniques can make a big difference to the way you cater for fluctuating call volumes, route customers to the best person, or avoid answering the phone altogether. Likewise, customer support software designed for SME businesses allows you to streamline your support processes, let customers find their own answers on your website, and even use your service teams as part-time credit control agents.
With telephony, much can be done using technologies such as interactive voice response (IVR), the self-service facility that helps companies filter customers by prompting them to select from a menu of options when they first call in.
With application software, the core techniques available to SMEs are similar to those provided for larger call centers. A good customer service application will help you track an inquiry from its creation through to its resolution, escalating it to the appropriate levels if it can't be solved on first contact. The application will also create customer histories, which pop up in front of agents as they answer a call. If you know what products the caller owns and all the previous service issues they've had, you're halfway to resolving their problems.
You can of course reduce the overall volume by encouraging customers to seek answers on the web. This can be as simple as posting answers to frequently-asked questions (FAQs) on your website. There are also tools for small businesses to build self-learning knowledge bases - if customer queries aren't resolved online, an agent steps in, and the resulting exchange is fed back into the knowledge base for future reference. Ultimately, much of the value from such customer service applications will depend on how well they're integrated with other systems. It is important to be able to pool customer information from both the sales and service departments, so both teams have an up-to-date customer history. By linking credit control or warranty systems to the customer service application for example, you can automatically warn agents that the customer they're speaking to is past due payment. That's a powerful weapon for cash-conscious businesses - when a caller needs help, there's no better time to encourage them to settle their bills.
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Can't get no By Richard Tomkins
I cannot be the only person to have noticed that customer satisfaction surveys have become a modern-day plague. Market researchers phone us, write to us, e-mail us or stop us in the street to ask us about products or services we have used. When we are online, questionnaires pop up asking us about the usefulness and effectiveness of websites we are visiting. There is no escape even within the workplace where we are quizzed about our satisfaction with the staff canteen, the IT department help desk and our working conditions generally.
One good thing about customer satisfaction surveys is that they make us feel important, giving us the opportunity not just to hand out plaudits or brickbats but, seemingly, to have them brought to the attention of the right people. This is a refreshing change from the experience with which most of us are familiar. But why are most companies hopeless at providing good customer service? Patrick Barwise of London Business School says one reason is that it goes against human nature. Placing someone else's needs above your own just does not make sense unless it helps perpetuate your genes. From this, we may deduce that employees are rarely predisposed to give any customers good service unless they fancy them. Another big reason, says Prof Barwise, is that everyone lies to their boss (at least a bit, even in good companies), but bosses always underestimate the extent of the deceit; so when problems emerge, they tend to be hidden instead of being reported and solved. Look at it this way: if you are responsible for dealing with customers every day, and your customers are intensely dissatisfied, are you going to risk getting the blame by telling the management?
This, I surmise, explains the mania for customer satisfaction surveys; instead of asking your employees to report customer dissatisfaction, you ask the customers themselves. But identifying problems is not the same as solving them. And I am not sure that customer surveys are even very good at identification.
Above all, though, my criticism of these surveys is that they are a sign of failure. Good companies with good products or services do not need to pester people with questionnaires; their measure of customer satisfaction is rapidly rising revenues and profits. Do Amazon or Starbucks assail their customers with questionnaires? I doubt it. Interestingly, they do not advertise much, either. So many companies spend colossal sums on advertising and branding, yet destroy the value potentially created by delivering poor quality products or services. The intelligent response, perhaps, would be to demote the marketing director and create a customer satisfaction director instead.
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FT SUMMER SCHOOL: Expect the unexpected By Morgen Witzel
Crises are an inevitable part of management and the larger the business grows the bigger the crises seem to become. However robust a business seems, it is still fallible - as has been shown by the recent histories of Arthur Andersen and Marconi. An understanding of risk is essential in crisis management. Sophisticated modeling techniques and expert consultants can help managers appreciate risks better, especially those stemming from global issues such as terrorism and climate change. Closer to home, risks such as changing customer preferences or takeover threats may be best analyzed within the company itself. The constant monitoring of what is going on in the larger world is an essential activity. Once a range of possible future crises has been established, contingency plans can be put in place.
However, not every crisis can be foreseen. The chances of an airliner crashing, for example, are extremely small, but every airline must still live with the possibility. When an Air France Concorde crashed on take-off from Paris -the first accident involving a Concorde - Air France was prepared to deal with the issue. Managers moved quickly to withdraw Concorde from service, announce an investigation into the accident and reassure the traveling public that it was still safe to fly Air France. The following day the airline's share price did decline, but not by much and not for very long.
Intel, the world's leading maker of semiconductors, suffered a huge and unforeseen crisis when it emerged that a small proportion of its Pentium microprocessors were faulty. Quickly assessing the options, the company took the brave step of recalling and replacing the entire production run of the series. The move cost more than $1bn (£550m) and probably saved the company. Intel showed that it was committed to its product, whatever the short-term cost, and customers responded positively. Looking back on the incident, Andy Grove, Intel's chairman and then chief executive, compared managing in a severe crisis to an illness. Strong, healthy companies will survive, although at a cost to themselves. Weak companies will be carried off by the disease and will die. In Mr Grove's view, the key to successful crisis management is preparedness. Forward thinking and planning are essential; understanding the nature of the crisis that might occur can help managers be better prepared, as the Air France example shows. Yet even while managers are planning how to deal with seismic events such as terrorist attacks or natural disasters, they may be missing more subtle threats such as the development of new technologies that could undermine their business. Good crisis management requires the ability to react to events swiftly and positively, whether or not they have been foreseen.
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