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Home Depot Needs a Participatory Management System

Leon Stafford's column, A New Emphasis of Service, in the Atlanta Journal-Constitution speaks to the monumental importance of customer service and the millions spent annually by companies to improve their customer service.

Good customer service can improve a company's image, distinguish it among competitors and bring in consumers who increasingly have more and more choices about where to spend their money.

"It's all about the competitive culture in terms of raising the bar," said Tim Mescon, dean of the Coles College of Business at Kennesaw State University. "To me, it's an essential market factor."

It's especially crucial for those sectors that rely heavily on repeat business, like hotels, restaurants and retail.

Atlanta-based Home Depot — for years perceived as lacking in customer service — launched an effort last year to improve consumers' experiences. Spending $350 million, the company hired additional staff and installed more self-checkouts and new radio-equipped call boxes that shoppers can use to summon help. The company is continuing those efforts.

A widely cited survey on customer satisfaction released in February showed the company's scores rose 4.5 percent in 2006. The previous year, Home Depot scored last among retailers in the American Customer Satisfaction Index, which is compiled annually by a University of Michigan researcher.

Home Depot spent thirty-five million and customer satisfaction only scored a measly 4.5%. What are they spending millions on? Whatever it is, it is being spent to avoid dealing with the real problem at Home Depot. And it is not the short-staffing that is getting a lot of press.

After the Nardelli regime, the management system needs to get store employees involved in improving the company. I would suggest buying their Store Managers a copy of The Enthusiastic Employee, have a group think discussion about the book, and then try to sell every one in the company on getting involved in helping the company learn how to inspire customers to remember, return, and recommend.

The company has lost it's passion and identity, but an active engagement program can get them back in the game. They need to spend their "training" budget on training Store Managers how to motivate, educate, and appreciate their teams. Customer service is not rocket science, it's rooted in common sense,  common courtesy and customer concern. Customer service skills that employees are well aware of, but often need a top quality front line leader to make certain they use their skills daily.

Extraordinary sales teams create extraordinary companies...

If a retail business has an exceptional sales team, they are guaranteed success. Yet few businesses do. Most rely on their products and services for their repeats, referrals, and reputation. It's common, it's easy, and it doesn't require a passion to achieve great things. It's the only way they have, so far, learned how to do it.

Nordstrom is a classic example of a passion to excel in the retail industry.  They are known for excellent  products and "best of the best" service. But it's their customer service (sales) teams that create memorable customer service experiences. Professional, sincere, trustworthy, well-groomed, efficient, and energetic. The company supports them with their unique policies, but every person on the sales floor is an expert (or being trained to be an expert) in how to sell customer service. Sincere, effective  persuasion skills that make "Would you like______________ to go with that?" a comfortable inquiry, not a robotic question asked of every customer because it is company policy. Nordstrom has the policy, but  you don't feel like they are asking to improve the size of their commission check.         

A trip to Nordstrom is "the excitement program!" I live a couple of blocks from their Flagship store and stroll through the store every few days just to see excellence in action. Without exception, every walk through looks, sounds, smells, and feels exceptional.

Tully's Coffee, and many retail businesses like Tully's, have great products, provide average to above average service, and offer excellent benefits to their employees. They are good companies doing a good job of delivering their products and services to the general public, but they seldom have a passion for excellence that is evident in their coffee houses. They seldom have the excitement, energy, or enthusiasm of a top flight team that excels in selling both products and customer service. They lack a team a leadership and management system that creates, motivates, and retains entire staffs of memorable achievers.

I think the coffee Tully's Coffee serves is among the best of the best. But if their model model for success also included a passionate best of the best sales and service staff (customer experience), going public would soon be a reality.

Automobile Dealerships: Don't expect "great" anything...

Seth Godin is one of my favorite bloggers and authors. In his Good is not almost as good as great post about a trip to an auto dealership, he describes his experience with frontline auto salesmen. He was not inspired to remember, return, and recommend, but he was inspired to write a blog about an experience that is a common occurrence throughout the auto industry.

A great auto dealership? Where? I don't know of one! My guess is that the percentage of dealerships that are exceptional is about 3%. A great sales team in the car business is almost non-existent because the standards for customer service in the auto industry are much lower than most consumer sales industries.

A local (east side of Seattle) high-end dealership consistently receives awards for exceptional customer service and satisfaction, yet I have yet to know someone who is happy with the dealership. Their TV spots, that have one thrilled customer after another, are typical of the industry. A lot of bragging, but reality proves them to be average at best.

I measure the quality of a sales force by the number of quality achievers that have been attracted and/or developed, and the quality of the team chemistry (esprit d'corps, camaraderie) that has been instilled in the fabric of the sales team.

In high-ticket sales, an extraordinary sales team has 90-100% achievers and an exceptional one has about 80%-90%. (It would be rare to find a car store with 50% achievers.) Team chemistry or esprit d' corps ? I know the ins and outs of the industry fairly well. I have never heard of a car store with a true (authentic) passion for excellence and/or teamwork.

Seth suggest firing half the sales line. If that would get everyones attention focused on personal and team excellence, why not? At least the staff would be paying attention to providing great service and improving their sales, service, and team skills.

I would have a meeting with the frontline staff. It would begin with my pointing out that the room is full of people with varied experiences, insights, perspectives, and intuitions regarding the auto industry. Then I would tell them I want this dealership to be the best of the best in the industry and I want to know how we are going to accomplish becoming the very best?  I would ask every person, without exception, for input. What do they think should go into a mission to become the best of the best.

I've had these meetings many times with sales and customer service staffs. They energize teams because employees support, often with a strong passion, what they help create. When it comes to team excellence that is especially true because the true achievers in the group love to be a part of a business that is "something special in the industry."