Price vs Value
“Price is what you pay, value is what you get” says Warren Buffet. As our world finds it increasingly easier to copy and “commoditise” products and services, the emphasis tends to be on price only.
The great thing about this is that consumers are finding there’s more competition for their money and that process are falling in many areas. The bad thing is that, if you make something cheaper, something’s “gotta give” and usually it’s either service or quality of product or service.
The expectation is that the more you pay, the better product or service you get. A simple illustration is between flying on a Low-Cost Carrier (LCC) vs First Class on (say) Singapore Airlines. The experience for travellers will be completely different. Complaints about LCC service (or lack of) on LCCs abound, but we don’t hear many about the service or experience on Singapore Airlines First Class.
Price also sets expectations. If someone is paying (what they consider) a higher price, they expect more value in terms of the product or service they receive. If Singapore Airlines First Class did not deliver the experience its passengers wanted for the price they were paying (a lot), the airline would find travellers shifting to the competition (and there’s plenty out in Singapore).
I’ve recently read several comments on the quality of the product of a certain well-known, high-end audio equipment manufacturer. The problem here is expectationsengendered by price as well as (in this case) the vendor’s prior history of quality results. This illustrates well the trap that many fall into (both buyer and supplier).
Having been lucky enough to experience Business and First Class travel (not with Singapore Airlines)., I can safely say that the experience to what I am accustomed to in Economy is truly different. Apart from the wider seats and increased leg room, the food, service and amenities are totally different. The traveller also gets the benefit of using a Business Class Lounge in which to relax before the flight as well as priority boarding at the departure gate. So, I got “value”.
The problem comes with the conflicting agenda of price vs value. People seem to want low prices, but high value. Given the training and investment needed to provide a superior product or service, this generally isn’t possible. However, we still see negotiators pressing for a lower price, and then expressing surprise at the result.
How to make sure we, as providers, don’t fall into the price/value/expectations trap? We need to know:
- What our customers want and expect
- What they’re willing to pay for it
- Whether we’re still delivering what they expect
Reaction time to correcting any perceived problems thrown up by the above issues and our success in doing so is what will differentiate us from the competition. If we're getting it right, our customers won't want to change us.
I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management. I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My website provides a full picture of my portfolio of services. For strategic questions that you should be asking yourself, follow me at @wkm610Labels: Customer Care, Selling, Strategy
Destructive Delegation Styles
We delegate for a number of reasons: ideally to free ourselves up for more value-added work and to develop skills in team members. These are good reasons to delegate - they result in more value-added to the organisation and to the individual. We also need to bear in mind that we are simply physically incapable of doing everything ourselves.
However, I repeatedly see instances of what I call “Destructive Delegation” (delegation for the wrong reasons).
1. “Drive-By” Delegation:
Like the “drive-by” shootings of gangster films, this involves the manager stopping briefly at a team member’s desk and delegating a project or task without ensuring that they fully understand the background, results expected and any limits on authority.
Result: task is done poorly or doesn’t include sufficient information. Manager and team member stressed.
When this works: with well-trained and experienced people who know how you work and the general background of what’s going on in the organisation, its business and customers. This means investing time in them up front. The “trained whale” doesn’t exist. Also works with tasks people have done several times before.
2. Delegation by Default:
Usually because the boss keeps things to themselves until they realise, at the last minute, that they can’t do it and drop it on someone else’ desk (using “Drive-By” Delegation techniques).
Result: all the manager has done is pass their impossible deadline to someone else. Task is done poorly or doesn’t include sufficient information. Manager and team member stressed.
When this works: it doesn’t.
3. Delegation by Delivery/Messenger:
Passing on a delegated task via a staff who may also not be able to supply necessary background/info... “The boss asked me to ask you to...”
Result: task is done poorly or doesn’t include sufficient information. Team member confused. Manager and team member stressed.
When this works: with well-trained and experienced people who know how you work and the general background of what’s going on in the organisation, its business and customers. This means investing time in them up front. The “trained whale” doesn’t exist.
4. Delegation by Mind-Control:
“This has always been done by this job…” - but did anyone tell them?
Result: task usually hasn’t been done because no one took the time to explain. Manager and team member stressed.
When this works: with well-trained and experienced people who know the other person’s job, how they work, the general background of what’s going on in the organisation, its business and customers. This means investing time in them up front. The “trained whale” doesn’t exist.
5. Delegating “Don’t Likes”:
When people delegate the jobs they don’t like, or the ones they consider beneath them, because “they’re the boss”.
Result: team members resent the manager, morale and productivity fall, people resign or transfer to other teams.
When this works: there’s a fine line between “don’t likes” or “what is beneath us” and delegating because someone else can do it better or because we need to free ourselves for a more value-added task.
6. Delegating to Divert:
When people delegate jobs they consider too "risky" in order to be able to blame "someone else" when things go wrong.
Result: team members resent the manager, morale and productivity fall, people resign or transfer to other teams.
When this works: one of the most toxic ways of delegating that soon gets seen for what it is.
How do we avoid situations, which could result in demoralised team members, stressed managers, falling productivity and perhaps poor customer service?
Train people. No team member is ever “fully trained” from day 1 (despite what Hollywood thinks).
Job descriptionsfor team members should include what tasks are done / delegated from above or “covered” …
Regular Team Briefingsso everyone knows what’s going on. These should be 30 minutes long, have a fixed agenda and be held standing up so no one stays longer than necessary and stays alert. It also improves health. *
Coach team members: delegate, but ensure they have what they need and review the task after to see how it could be done better.
Understand their strengths and weaknesses. Not everyone is good at everything (even us managers). Play to their (and our) strengths.
Cross-train– so everyone knows at least one other job. The military do this all the time.
Never assume anything– particularly with new staff.
Read books on how to delegate.
If we find we’re on the “receiving end”: we need to talk to our manager. Without criticising their management style (of which they may not be aware…), we could suggest how to “improve” things be means of the strategies above.
When taking over a job, never assume we’ve been given all the information. People forget. Ask questions about other colleagues covered, training available, where to get information.
* Apparently, we burn 50 calories per hour of standing. That may not sound much, but if we stand for three hours a day for five days that's around 750 calories burnt. Over 1 year that’s almost 40,000 extra calories.
I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management. I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My website provides a full picture of my portfolio of services. For strategic questions that you should be asking yourself, follow me at @wkm610.
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Labels: Customer Care, Leadership, Productivity, Strategy, Teamwork
