Providing Leaders with the Missing Link: Making Customer Information that is Linked to the Bottom Line Part of Leaders

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Providing Leaders with the Missing LinkMaking
Customer Information that is Linked to the Bottom
Line Part of Leaders 360-Degree Feedback

• Jim Miller
• Shon Magnan
• Jennifer Mattocks
• For more information please contact Jim Miller
  at
• 651-688-1912 or jmiller_at_questarweb.com
• Presented in Making 360 Matter Program
  Attributes and Links to Organizational Outcomes
  at the Eighteenth Annual Meeting of the Society
  for Industrial and Organizational Psychology,
  Orlando, FL April 11, 2003

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Background

• Strategic benefit of 360 feedback is receiving
  input from each of a leaders constituents

Supervisor
Subordinates
Leader
Peers
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Background

• Why isnt customer feedback included in
  leadership development?
• Not all leaders interact with external customers
• Reliability of customer ratings is suspect
• Often no direct link between particular managers
  and customers.
• Instead of attempting to include customer
  feedback in a typical leadership assessment
  model, some retail organizations are using
  linking models to target leader development as
  one way to improve consistency and excellence in
  concept delivery.

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Background

• Linking
• Models of organizational functioning and outcomes
  (e.g., Heskett, et al., 1994 Wiley, 1996 Rucci,
  et al., 1998)

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Research Questions

• Will the climate for service created by a leader
  impact the consistency and excellence of concept
  delivery?
• Does it make a difference if customer feedback is
  utilized for administrative vs. development
  purposes?

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Method Sample

• Program 1 Survey responses obtained during a
  customer service tracking survey for a
  nation-wide 4000-unit retail chain.
• Customers were invited to complete an IVR survey.
• Data collected from March 2001 through December
  2001.
• Total sample size 500,000 respondents.
• Survey used for administrative purposes - store
  managers evaluated and compensated for their
  customer results.

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Method Sample

• Program 2 Survey responses obtained during a
  customer service tracking survey for a
  nation-wide 150 unit restaurant chain.
• Customers were invited to complete an IVR or
  Internet survey.
• Data collected from January 2002 through December
  2002.
• Total sample size over 90,000 respondents.
• Survey used for developmental purposes - store
  managers are not compensated for their customer
  results.

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Method Measures

• Program 1 Service Compliance
• e.g. Associates Professional?, Wait Time Under 15
  Minutes, Cleanliness of Store
• Program 2 Customer Satisfaction
• Taste of Meal, Atmosphere of Restaurant,
  Knowledge of Associate, Overall Satisfaction
• 5-point Likert satisfaction scales.

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Results Linking Feedback to Sales Performance

• Found significant correlations between customer
  feedback scores and sales growth

Retail Chain (administrative)
Sales Growth
Overall Customer Score
.23
Restaurant Chain (developmental)
Sales Growth
Overall Customer Score
.31
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Results Customer Feedback and Sales Growth
Sales Growth - YTD
Restaurant Chain Customer Satisfaction Scores
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Results

• Feedback was developed for store managers that
  correlated sales growth to specific customer
  feedback items.
• Allows leaders to focus on the aspects that most
  affect their bottom line.

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Results

• For feedback to be valuable, store managers need
  to receive timely feedback.
• Unlike traditional 360 feedback, data are
  collected continuously.
• Managers do not have to wait a year to see if the
  improvement efforts they are making are impacting
  their customers.
• Feedback can be used as a early warning system -
  dont need to wait until sales lag to correct a
  problem.

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Results

• Results used to determine not only where managers
  need to improve - but how to improve.

Inconsistent Service
Percent Very Satisfied
Overall Low Service
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Conclusions

• Customer feedback can be an important component
  of a leaders development plan.
• Strategies, such as linking, need to be created
  that provide timely customer feedback.
• Customer feedback developed with either an
  administrative or developmental purpose can
  provide valuable data.

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Further Research

• How do we integrate customer feedback into a
  traditional 360 program?
• How does an organization where customers cannot
  be linked to individual leaders take advantage of
  this type of feedback?