I would like to share Insight #64 from my book “The Dangerous Book for CEOs” with you.

 

I know one leading-edge niche market hotel chain where everyone’s bonus, from the general manager down, is dependent on the TripAdvisor rating. And, everyone is empowered to do whatever it takes to achieve a 5-star rating – because that is what the company has identified as the best measure of the key driver of their business – customer satisfaction.

 

You have to incentivise your people to solve customers’ problems. You must reward them for delivering on what the customer wants. That includes things like looking for creative solutions, investing in innovation, and allowing people to take risks and make mistakes. You have to reward that kind of behaviour, not punish it.

 

If someone acts in a way that detracts from the customer experience – lowers product quality, makes it harder for customers to communicate with you, offers a product or service that you know doesn’t support the customer, or drives a sale that is not in the long-term interest of the customer – their conduct should not be reinforced with financial rewards, career advantages, or other incentives. Yet, all too often, that is exactly what happens.