Nobody sells widgets anymore – on the importance of services

No-one sells widgets any moreMost people have heard of widgets, hypothetical thingamajigs manufactured and sold to hypothetical customers of hypothetical businesses. They are often used in exam questions in business courses such as accounting, economics and even more often in marketing classes. However, the study of marketing has evolved from discussion of selling mere widgets.

It could be argued that marketing is not only about selling manufactured things, like widgets, but rather providing a service to customers. In their 2004 paper, Stephen Vargo and Robert Lusch describe this concept nicely when they say:1

“…times have changed. The focus is shifting away from tangibles and towards intangibles, such as skills, information, and knowledge, and towards interactivity and connectivity and ongoing relationships.”

So what does this migration away from manufactured objects and towards services mean for the business manager?

Managing the Myths

If you’re looking to understand why everything you offer is a service, it’s important to consider four aspects of what you’re marketing. Again, borrowing somewhat from Stephen and Robert:2

be mindful of your customers’ perception of your service

  1. Even tangible objects that you sell have an element of service to them. A more obvious example is a smart phone (a physical object) with a subscription to phone and internet services. It is important to examine everything you have on offer and try to understand the service it provides and how it can better meet your customer needs.
  2. Customer’s perceptions play a large part in how they evaluate what you have on offer. This is because service levels can vary a great deal more than the physical dimensions of quality-controlled, manufactured widgets. As a business manager, you need to be mindful of your customers’ perception of your service and make the most out of the opportunity to customise your service to match individual customers’ needs.
  3. You don’t necessarily need to be there for the customer to provide a service. There are countless opportunities to add and enhance the service component of what you’re offering customers. One of the best examples of this is making information about the support that you provide to customers pre- and post-purchase available on online.
  4. Services, like objects, can fail, they can become less fashionable, they can be replicated. It is essential that you continuously improve and innovate your services. It is vital that you ensure you understand the needs of your customers and look at new and more effective ways to meet their needs.

No one just makes widgets anymore; if there is a physical object to be offered at all, it is entwined with a service of one kind or another. A lucid manager understands how to make the best advantage of the service aspect of what they offer to customers and understands that a widget is merely a tangible and small part of the service being offered.


  1. Vargo, S.L. and Lusch, R.F. (2004) The Four Service Marketing Myths: Remnants of a Goods-Based, Manufacturing Model. Journal of Service Research(6)4: 324–335. doi: 10.1177/1094670503262946

  2. Vargo, S.L. and Lusch, R.F.(2004) Evolving to a new dominant logic for marketing. Journal of Marketing 68: 1–17. doi: 10.1509/jmkg.68.1.1.24036 

Don’t want to be *that* guy—five steps of complaints management

Don't want to be *that* guy—five steps of complaints managementI know that you would rather shuffle self- consciously near the service counter and try to pretend you have nothing to do with that guy.

That guy is standing there outlining, somewhat passionately, just how disappointed he is that, as a customer, his expectations have not been met. It’s almost a reflex that most of us don’t want to be part of the conflict in any way. Many would just take their business elsewhere; it’s bad enough to be near that guy, imagine being him!

Some companies might, somewhat rudely, label that guy a complainer. Complaining, however, is merely a description of what he is doing. He should be viewed by the business as Santa Claus bringing the gift of opportunity.

Rather than walk away, quietly taking his money with him, he is providing critical marketing intelligence and providing a golden opportunity to turn some very negative word-of-mouth publicity into a clear positive message.

if you’ve misinterpreted their concerns, empathise!

We all have stories of companies who have done a bad job of “Service Recovery”. I recently became that guy when a local company failed to do what they promised to do for a member of my family. After sending a written complaint, the manager of the company called and asked to meet with me and what I experienced was service recovery done the right way.

Complaints Management

The way that this manager handled the meeting provides an excellent template of how to deal with a customer’s complaint in a way that, in most cases, will lead to customer satisfaction and excellent word-of-mouth endorsement. The five steps that he used were:

1. Thank the customer for making the complaint

It’s likely that the customer will feel awkward. It is easy to say, “Thank you for telling us about this problem, most people would have, just left but you’ve given us the chance to fix this problem, not only for you, but for other customers.” Being thanked for making a complaint is often surprising for the customer but helps them feel more open to discuss the problem.

2. Outline your understanding of the problem

While simple, this lets the customer know that you have heard their complaint and allows them to correct you if you’ve misinterpreted their concerns; empathise! Show them that you understand the impact on the customer.

3. Take personal responsibility for fixing the problem

This is a tough one to do. While you might not feel that you personally are at fault, the customer will often need someone to be accountable for fixing the problem. A simple approach is to say, “I could have made sure that my staff were aware that this approach may caused you and I didn’t do that well enough on this?occasion?- I take personal responsibility for fixing this problem”

4. Negotiating an agreed approach to fixing the problem

In most cases this could be simple. A refund, a next free visit, an apology. It is also vital that you outline how to ensure that the problem does not happen again. During this step, it is essential that you gain an acceptance from the customer that the solution is agreed upon and that it will resolve their concerns.

5. Do what you promised to do to fix the problem!

Whether you actually deliver on your promise to fix the problem or not the customer will?tell others. By delivering on the promise, you get to choose positive word-of-mouth endorsement and much higher levels of customer satisfaction. I’ll leave it to your imagination what stories will be told if you don’t deliver.

Customer service engineering may still be, in the larger part, more art than science. It is important to bear in mind that “individual results may vary” but taking the?five steps to customer service recovery very much increases the odds that you’ll turn that?guy into one of your company’s best resources.

Seven wrong reasons for developing a business process

Not another bloody business process!How often have you been in a meeting and when discussions reach a sticky issue someone, who I’ll call the ‘processifecator’, chills you to the core by saying:

We obviously need to develop a business process for this.

You let out a sigh of disbelief, knowing that the momentum of your team is in jeopardy and you need to break this impending deadlock before the project stalls. Fortunately, you know how to deal with situations like this because you know the seven wrong reasons for developing a business process.

A process is an instruction on how to perform a routine task to reduce the risk of tripping over problems that have been anticipated or encountered in the past. Processes often form part of a business management system, such as ISO9001).

A process is a precision weapon that should only be used when it adds value. Wrong processes lead to toxic processifecation, which grinds innovation and creative thinking to a halt.

Seven good reasons not to have a business process.

1. Punishment

You’ve made somebody angry, and now they want to exert some power over you. Under these circumstances, it is important to deal with the underlying reasons that the processifecator is punishing you and move on.

2. Laziness

The processifecator doesn’t want to do the work and rather play Minesweeper or check Facebook. A process can provide an excuse not to think about an issue and just tick the boxes as you progress. Laziness will impact on innovation as a process can stop free thinking in its tracks.

3. Ignorance

There is already a process that is available and documented that is appropriate maybe with some minor modification. Provide a copy of it and move on.

4. Security Blanket

The processifecator doesn’t want to be blamed for a decision and hopes to avoid this by ensuring that all of the stakeholders are “on board”. While communication with stakeholders should not be ignored, you should not disregard the money you’re paying someone for their expertise, rather than slavishly following a process.

5. One-off Activity

Almost universally, one-time activities should not be documented, unless health, the environment or large amounts of money are at stake. In most cases, it will be enough to discuss the task first, do it, then move on.

6. Performance Management

Processes are sometimes developed because an individual is not competent and requires guidance in performing a task. Creating a process to manage performance is risky because somebody is performing a task that is beyond their level of competence.

7. It’s a trap!

The final and worst reason for creating a process is to deliberately spring a trap so that someone (the target) will fail to follow that process, justifying the subsequent disciplinary action or dismissal. This is one of the worst reasons for developing a process because you’ll be left with a flawed process and team members who will shift from performance behaviour to risk avoidance behaviour. This will have a fundamental impact on trust between team members and performance of the team.

When it’s all said and done. There are good reasons to create a documented process. The most appropriate occasion to write a process is when documentation leads to significant improvements in production efficiency or customer experience and, more broadly, when the risk of not documenting the task is greater than the risk of recording the job.

If the reason for a documented process is not clear when the processificator speaks up, it is likely that you’d be better off without one.

Learning to Drive a Bus

One day last summer, on my way to work and dressed in my business suit, I boarded the bus to find only two other people on board: a trainee driver and his instructor sitting two rows back from him. As I boarded, I said, “Good morning” to the driver. When I walked past the instructor he said, “It’s going to be easy for you, working in your air conditioned office all day while we’re stuck in this thing for ten-and-a-half hours in this heat.”

Admittedly the weather forecast was for 42°C throughout the day: I did feel some sympathy for their situation and responded, “I hope it won’t be too bad for you today”.

I sat down and thought about how, despite it being the Monday after an excellent weekend, I was going to work feeling that the following week held many possible opportunities and felt quite positive. The instructor’s remarks were, however, as the arrival of dark clouds.

I sat quietly and decided not to allow someone else to choose my mood for me, so I set aside his remarks and mentally prepared for the day ahead. He decided, however, that he wasn’t finished with me yet …

Apropos of nothing, he told me that his philosophy on life was to “Trust no bastard and hate everyone”. I had come across people that had a bleak view of humanity in the past, but few who rivalled the instructor’s point of view. I decided to listen but not challenge him politely—I could tell from his attitude that he was looking for an argument so that I could confirm his beliefs.

“I’m going to be stuck in this glass chamber all day, in this heat and so will he,” he said as he pointed to his student, “but I feel sorry for him: he has to drive all bloody day.”

I wondered if this man’s philosophy on life placed him directly in the middle of his current misery. Feeling little sympathy for him by this point, I was looking forward to arriving at my bus stop. I thought about what negative thoughts and attitudes I held that made me miserable. I would need to be more aware of this in the future but, my stop was approaching.

The Trainer then decided to share another of his views with me, that anyone with “dark skin, slanty eyes or a straw hat had benefits handed out to them by the government and if you’re white ya get nothin’.”

It was then that any sympathy I had for him evaporated and all my sympathy was with the driver. I wished the driver “Good luck” as I stepped off the bus.

As I walked to work, I moved my mind to the coming week and all that I might achieve in my “fancy air-conditioned office”. I felt good and am acutely aware that I have a lot to be thankful for: a wonderful family, a beautiful house, a steady job, and so much more. Today, however, I had one more thing to be thankful for—that I’m not learning how to drive a bus.

The Lies We Tell—Double Deception in Recruitment

The Lies We Tell—Double Deception in RecruitmentMatt was nervous. Most people are under the circumstances. Matt sat in front of the recruitment specialist, hoping that he’d end up with the job that was on offer. It was a step up from what he had done in the past—in pay, responsibility and influence.

Daniel, the Recruitment Manager, pushed a folded piece of paper and a pencil across the table to Matt and then did something appalling. He lied.

“Please answer the questions for this personality test there are no right or wrong answers”, Daniel reassured Matt.

There are no right or wrongs answers.

Mind you, Daniel had no intention of lying nor did he even realise that he had, at the time. “There are no right or wrongs answers”, is a lie that many managers and human resources professionals use from time to time. The personality tests that are conducted in workplaces throughout the world in job interviews have no answer that is intrinsically correct—as you might find in a high school mathematics exam. However, the presence of a series of questions that is included as part of the selection process for an employment role makes a lie of Daniel’s reassurance.

If a recruitment test of any kind is used in the context of an employee selection process, there is an intention to use it to justify the selection of a particular candidate and to exclude others. It has already been decided by the interviewer, recruitment expert or organisation that a particular personality is required for the role (or, conversely, that particular personality profiles are to be avoided). This means that for the organisation, particular responses on the personality test are, in fact, right or wrong.

Looking at personality tests from the candidate experiencing the job interview process, there are also right and wrong answers. In our example, Matt desperately wants the job but does not necessarily know what personality profile Daniel is looking for, nor does Matt know what responses he needs to give to present the ‘right’ personality profile for the job. Additionally, he knows that he should be honest during a job interview. When nervous, the tension created by the need, to be frank, and also the desire to meet the needs of the interviewer is unlikely to help Matt through the selection process nor help Daniel find the right candidate.

Set aside for now whether there is any validity in using Myers-Briggs, Keirsey, DISC or any other personality test or temperament sorter in a job interview, the simple message is that there are lies in the workplace that we use to smooth the path or placate people, but they are still lies.

A lucid manager will make every effort to assist Matt through the interview process and would also be aware that, truth be told, there is a right or wrong answer to every question in a job interview—the answer that demonstrates suitability for the job.

For more information and critique of personality profiles, confirmation bias and the Forer effect check out Peter’s essay, Know Thyself. Also check out Peter’s article on recruitment, arguing that every business gets the employees they deserve.

The Battle of the Disappearing Teaspoons

The Battle of the Disappearing TeaspoonsIt doesn’t matter how well-designed, functional or beautiful your office tea-room or kitchen is, it almost seems completely useless if you can’t find a teaspoon. From time-to-time, someone will snap, and there will be a call to arms. The indignant party who leads the charge will usually be well-meaning and genuinely concerned about standing up for the rights of others needing to create a vortex in their hot beverage of choice.

Emails go out, complaints are made and, if the workplace culture is entirely wrong, painfully polite and hilariously, hostile passive aggressive notes will adorn the tearoom. After some weeks of torment, the apparently intractable problem will be solved by buying some more spoons, but not before several people have walked around feeling guilty while the spoon crusaders end up muttering about never being listened to. All of this is avoidable once you understand the science behind spoon migration.

Science? Spoon Migration? Yes, it has been studied and published in the British Medical Journal. A research study at the Centre for Epidemiology and Population Health Research at the Macfarlane Burnet Institute for Medical Research and Public Health in Melbourne, Australia found that the half-life of teaspoons in their common tea room was 42 days.1

That’s right, it’s been studied by a group of epidemiologists and, to paraphrase and butcher their results, the conclusion is: communal teaspoons will eventually disappear. This has sparked a range of possible management interventions, including:

  • Don’t provide spoons
  • Provide disposable stirrers
  • Provide spoons on a heavy chain
  • Just accept that people are going to take them and buy more spoons

Do we defend the practice of stealing office property, regardless of how small, shiny and apparently valueless it is? Of course not! We should, however, understand which fights are worth fighting. Or in the wise words of Sun Tzu:

He will win who knows when to fight and when not to fight.

To provide a simple guide to where loss-of-teaspoons fit into the scheme of things, consider the following list:

  • Occupational Health and Safety issues
  • Working to gain multi-million dollar revenue streams
  • Teaspoons
  • Ensuring you’ve employed the right people for the job
  • Making sure your telecommunication systems are running effectively
  • Ensuring your corporate image is one that appeals to consumers

Note that the list above could have been written in any order and the addition of teaspoons will always appear unworthy and unwelcome. The Battle of the Disappearing Teaspoons is not an important issue.

For the amount of time and effort, people will spend badgering other staff members about the loss of spoons, complaining, writing nasty notes and disrupting the workplace, based on epidemiological science, if you have a tearoom it is best to accept that you will regularly need to buy spoons. This one simple tip will help avoid a lot of the angst and pain of not being able to measure your morning caffeine dose accurately.

He who knows when he can fight and when he cannot will be victorious.He who knows when he can fight and when he cannot will be victorious.

  1. Lim, Megan S C and Hellard, Margaret E and Aitken, Campbell K (2005) The case of the disappearing teaspoons: longitudinal cohort study of the displacement of teaspoons in an Australian research institute. BMJ (331)7531: p. 1498–1500. doi: 10.1136/bmj.331.7531.1498

Make Time Poverty History! The Cult of Being Busy

Good morning Agnes, how are you? You know how it is, busy, busy, busy … Have you read my latest proposal? No sorry, I am very time poor.

Make Time Poverty History! The Cult of Being BusyAs affluence has spread across Australia and parts of the rest of the world, time seems to be the new frontier of poverty. When asking the average professional what is happening in their life, the word ‘busy’ is frequently uttered. If they seek your sympathy, the superlative neologism Time Poor is used.

The underlying message is that, although these time poor people are financially wealthy, we should feel sorry for them as they equate themselves with the poor people of the world. They are, however, not poor cash poor, but time poor. We need to establish a charity and sell white sympathy wristbands:

MAKE TIME POVERTY HISTORY

Time Poverty is, however, more often than not a self-induced state of mind and not an actual state of affairs. It is not about a factual lack of available time, but the perception of a lack of available time. Being time poor and being busy has almost become a status symbol in what Scott Berkin describes as the Cult of Busy:

“That simply by always seeming to have something to do, we all assume you must be important or successful. It explains the behaviour of many people at work. By appearing busy, people bother them less, and simultaneously believe they ‘re doing well at their job.”

For some strange reason, as Berkin points out, a manager with a long line of people at her door will command respect, but a long line at a supermarket register will create frustration.

The Cult of Busy has a large following and has spawned numerous courses and books for managers seeking to squeeze more productive minutes out of a day. A manager I worked with some years ago was always busy, but never seem to achieve much. He decided to sign up for a time management course. Unfortunately, he was so busy that he forgot to attend the course!

forgot to attend a time management course.

Being busy is a status symbol for the apparently successful manager. If you are not busy or if you have enough spare time to speak to people, you are obviously not very good at what you do, is the subconscious reasoning.

Sadly, accompanying the new Cult of Busy, is also an abundance of guides available to support this hyperactive charade. WikiHow even provides a comprehensive program for those who want to join the ranks of the apparent time poor:

  • Know what the standards are (so you just meet them).
  • Create the illusion of furious activity (somewhat messy desk, lots of windows open on your computer, post it notes around the monitor).
  • Ask lots of intelligent questions to make each task appear more complicated than it is.
  • Be alert and watch out for ‘big brother’.
  • Carry a backup prop or document and make sure you have a cover story ready.
  • Send packages to yourself with documents to ‘review’.
  • Have personal conversations and phone calls away from your workspace.
  • Don’t brag to anyone that you’re doing any of the above.

In contrast, a lucid manager is never time poor but takes control over the available time to them. A Lucid Manager might have a lot to do but rarely says “I don’t have time” or “I am busy”. A Lucid Manager works efficiently and does not choose to live in false poverty but leads a productive life full of achievement.

Next time when you are very busy, and somebody asks a question, don’t brush them off by saying your busy but listen to their needs.

Enter the Dragon—Six Simple Lessons on Entrepreneurship

Some lessons on entrepreneurship from underneath an imperial dragon.Wearing bright pink pants, white T-shirt and green sash, I stood looking through the barbed wire and plague locusts at the trees filled, for the first time in Bendigo’s history, with a smelly and squawking colony of fruit bats. The sound of Mancini’s Pink Panther theme was a stark counterpoint to the apocalyptic feel of the marshalling area and was an odd but pleasing reminder that, out there, where the festivities of the 140th Bendigo Easter Festival. My strange outfit matched that of the other sixty men, whose job it was to spread out over the length of Sun Loong—the forty-year-old, one hundred meters long imperial dragon—and carry him through the crowd; the grand finale of the Festival’s Easter Monday street parade. When I hoisted the bamboo and silk dragon’s midsection above my head, the one thing I least expected to receive was a motivating insight into entrepreneurship.

After being swept the 500 metres toward the parade starting area, each of the dragon-bearers had an hour to wait. This was when I met Ewan.

Lessons on entrepreneurship

Ewan was a fifty-something with close-cropped hair and a no-nonsense attitude. We talked about our kids, and he mentioned how he enjoyed the time he could spend with his children because he works from home—something he has done for a great many years. Ewan explained he could do this because he has a passion for starting up businesses and growing them. He also mentioned the many and varied industries in which he’d worked: pay-TV, repossessions, logistics, telecommunications; to name a few. Though I have no idea what level of success he’d achieved in any of the businesses in financial terms, it was clear that he had thoroughly enjoyed starting each business, each industry (except telecommunications) and he loved the lifestyle his choices afforded him.

Throughout our discussion he generously offered a lot of advice about how to avoid working for someone else … there’s only one way to do something: your way. Some of Ewan’s views on entrepreneurship were:

  • Start small and build up—that way you avoid getting trapped if the idea doesn’t work
  • Seek out a niche—something that no-one has thought of or bothered with
  • Avoid employing people—where possible use subcontractors
  • You don’t need training to be an entrepreneur
  • Treat others the way you expect to be treated: with honesty and integrity
  • Avoid the telecommunications industry—no one is making money in telecoms.

The shout went up that it was time for the dragon to march its way through the streets lined with families from all over Victoria. As I watched Ewan’s feet shuffle ahead of mine, I thought about what it is that makes him or any other entrepreneur successful. It’s an indefinable mix of self-confidence, energy, cleverness and determination that predisposes them to succeed.

After 4,237 steps over 2.1 kilometres, I helped Sun Loong rest in his Museum home to reluctantly sleep for another year. I returned to my regular clothing, none of which is pink, and walked out into the sunlight and away from the barbed wire enclosure, the bats and the locusts.

I don’t believe in signs, omens, or ‘messages from the universe’ and having walked through an apparent apocalypse, I left with a much better sense of entrepreneurship and what it is to have a real love of business—something I never expected when I entered the dragon.