Procedures Versus Empowerment: Which Comes First?
In the service line, it is important for a company to uphold its brand and service level standards. At the same time, it is equally important to provide front line employees with the flexibility and freedom to be empowered to create positive experiences for customers.
In a study published in Harvard Business Review, it was found that customers who had the best past experiences spend 140% more compared to those who had the poorest past experience. At the same time, it’s not just about creating that “wow” experience, but providing reliability and consistency, and being apologetic and quick to correct mistakes when they are made.
According to research published in Forbes, the reward pathways in our brains “over-react disproportionately to losses in comparison to gains. This is why we humans are so loss averse and why understanding how your customers have been let down in the past is so important.” Therefore, “a strategy of minimising disappointments could offer a better return on our investment of time, money and resources.”
So what is the secret to empowering employees to create exceptional customer experiences or to minimize the effects of negative ones? Many employees want to be empowered, and many leaders say they seek to empower their employees. However, for many companies, “empowerment” is still a buzzword. Talking about empowerment at the top and “motivating” employees to “be empowered” isn’t enough.
As long as the policies and procedures in place are overly prescriptive and goals or KPIs set are unrealistic (e.g. closing a ticket in X seconds or zero service failures), employees will be incentivized to play it safe and within the boundaries of the rules, instead of going above and beyond for the customer.
At the same time, companies may in their zeal for empowerment go the opposite direction, and provide too few operating boundaries and guidelines for their staff. While this may give them the freedom to do all that is necessary to service the customer, it also creates a lot of uncertainty and leaves a lot of room for interpretation.
Companies that have become legendary for empowering their teams to provide top levels of service, such as the Ritz-Carlton, have managed to successfully strike that delicate balance between procedures versus empowerment. Instead of asking themselves whether to focus on operationalizing service or empowering their staff, they focus on the customer, understanding that it takes both clear operating procedures, as well as empowered staff, to deliver not only good, but outstanding service.
At the Ritz-Carlton, every single employee is famously allowed to spend up to $2,000 a day per guest to delight them or fix a problem, a drastic act of trust and empowerment by the company. Conversely, their Gold Standards are extremely well defined. For instance, their “Three Steps Of Service” clearly defines what service means at the Ritz-Carlton:
A warm and sincere greeting.
Use the guest's name. Anticipation and fulfillment of each guest's needs.
Fond farewell. Give a warm good-bye and use the guest's name.
What the Ritz-Carlton has mastered is separating what can be operationalized (such as greetings and farewells) and what can’t be (going out of the way to accommodate a customer request or fix a problem), and training for the former, while hiring and empowering for the latter.
While operational procedures can be trained for through repetition and reinforcement, an attitude of going the extra mile cannot be trained. This is why getting hired at the Ritz-Carlton is so extremely difficult. Based on the number of applicants and number that actually pass the rigorous screening process and get hired, getting a job at the Ritz-Carlton is touted to be around as hard as getting into Harvard.
This emphasis on service formed the core of the Ritz-Carlton’s business model, and was one of the key strategic elements that Steve Jobs “stole” from the Ritz-Carlton, after enrolling all its new store managers into the Ritz-Carlton’s training and leadership program.
At URBN Playground, we deal with a wide range of frontline staff, from concierge and front desk staff, to lifeguards, fitness trainers, porters, lifestyle directors, and more. We invested three months this past summer into developing a 170-page operations manual with clear guidelines for each role, with detailed guidelines and checklists of things to do before the shift, during the shift, and after the shift. In short, we operationalized as much of what we do as possible, to clearly define for ourselves and our teams what an acceptable level of service means at URBN Playground.
At the same time, we know that there are many things that cannot be trained or taught. Where the do’s and don’ts are fuzzier, such as dealing with customer complaints or out of scope requests, we have turned to our best teacher - past experience - and developed case studies based on real life as part of our operating manual.
For example, instead of giving our staff blanket rules such as “Never entertain out of scope requests”, we provide examples of when it may be inappropriate to do so and when it is okay to do so:
Ask yourself, does this request violate safety policies or will it potentially affect operations?
Example 1: A bather asks a lifeguard to watch her kids in the pool while she leaves the pool area. The pool rules clearly state that children cannot be left unsupervised by an accompanying adult, and hence this is a request that cannot be entertained.
Example 2: A resident asks to turn up the temperature in the gym, which is centrally controlled. You should not do this as it will affect temperatures in other amenity locations as well.
If the answer is no to the above, you may entertain the request:
Example 3: A resident asks a concierge to hold her bike temporarily in the package room. If there is enough space to hold the bike, and entertaining her request does not impact your job, you can entertain the request and potentially make the customer’s day.
With these measures in place, we know that it still comes down to hiring the right people, people who can be trusted to have the customer’s best interests at heart, and to sense what is needed before it is even asked for. We have had the good fortune of hiring some amazing people into the team in our first year of business - we’ve had people who would run out to buy an important piece of replacement equipment at a moment’s notice, out of their own pocket, and people who have gone above and beyond to make a customer’s day.
It is an iterative process, and we are constantly evolving. As we learn new things and develop new best practices from working with top class people, we incorporate this into our operations playbook. At the same time, having a set of operationalized service norms and examples of case studies inspires new staff we hire and serves as a baseline from which to continue improving.