Small Business

These Problems Mean You're Doing Something Right

Frances Frei and Anne Morriss, Guest Columnists

Customers are up in arms. Employees are lounging on the job. Someone — a colleague, an investor, the little voice inside your head — thinks something must be horribly wrong.

Uncommon Service - Frances Frei | Anne Morriss

Should you do whatever it takes to fix it? Not necessarily. It depends on your service model and positioning; in other words, on the specific contract you have with your customers. Sometimes friction is a sign that you’re doing something exactly right. And sometimes it’s a serious red flag. Here’s how to tell the difference.

These four “problems” may actually be signs of a healthy business:

You’re not excelling at everything. To be able to invest in excellence in the areas your customers care most about, you need to conserve your resources elsewhere. If you’re making these kinds of smart tradeoffs, then you’re strategically underperforming. It’s the first step towards excellence.

Customers are complaining. Not all customers want to be served in the same way, and so most companies have to pick an operating segment — a group of customers that wants the same things – and design a service model around it. This means that some customers, by definition, will be left out. If the squeaky wheel isn’t in your target segment, it’s a sign of disciplined management.

Employees are complaining. There’s no path to improvement that doesn’t go through an honest assessment of where you’re falling short. If your employees want to be a part of that conversation, encourage them. It means you’ve created that a culture where it’s ok to discuss problems – an enormous competitive advantage.

Your people are slacking. Slack has become a bad word in business, but service excellence requires some slack in the system. Keeping some resources idle, some of the time, means that you can respond to unexpected challenges — like a spike in demand — with speed and grace.

Of course, sometimes problems are true signs of distress. Give these your undivided attention:

You’re making customer promises you can’t reliably keep. The most pervasive problem we see in service organizations is a lack of coordination between marketing and operations. If your brand is signaling excellence, and your organization is delivering mediocrity, then it’s time to head back to the strategic drawing board (we recommend sprinting). Customers are intolerant of this kind of disconnect, now more than ever. 

Your people are overwhelmed. Whenever there’s a gap between the complexity of a job and your employees’ ability to do it, then the service you’re delivering is about to take a big, bad hit. To avoid service failures, you must either hire and train differently or redesign the job. In most cases, option two is easier.

You’re not recovering your investment in great service. Service excellence must be funded in some way. If not, you risk delivering gratuitous service, service features that are donated to customers but never paid for in any way. Gratuitous service delights customers in the short run, but kills your profitability over the long haul. There are three ways to avoid this trap: find a palatable way to charge your customers more, reduce costs while improving service, or get customers to do some of the work for you.

Your service is highly customized. If you can eventually make your customers happy, but it requires reinventing the wheel (or even the Post-it note) each time, then you’ve designed a hobby business – a model that can’t scale. Businesses like these can sustain a small team, but you must give up your ambition to grow. The secret to growth is standardization.

Frances Frei and Anne Morriss are the authors of "Uncommon Service: How to Win by Putting Customers at the Core of your Business (Harvard Business Review Press, February 2012)."