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YOUR EMPATHY PROPHET T - ISSUE 3/ FEBRUARY 2009 16ACADEMIA Reputation Quite clearly having an enviable reputation can heap huge rewards in all aspects of business. But in challenging economic times reputation may be the deciding factor in business survival. Take the mortgage market as an extreme example of the impact of the current challenging economic conditions. By September 2008 mortgage sales had dropped by around 64% for the year and mortgage rejection rates had more than doubled in 3 months. Now predictions for 2009 are inconsistent and without a consensus in the market, the predictions look speculative at best. In shrinking markets where conditions require urgent change to business rules, consumers choose recognised brands and reputations. Because the stresses on front line staff translate into customers' perception of their treatment, having a good reputation means that customers and staff will trust a business to steer through difficult times when confidence is low. Golden Rule - Know what your reputation is and if it meets your business needs. Golden Rule - Never confuse Brand Values and reputation. Customers & Reputation The Harding & Yorke description of the Customer is: ' The customer is anyone you need to treat well in order to thrive'. It is the customer that is responsible for reputation. For internal customers, the ability to be empathetic ( looking after the needs of the individual) far outweighs your ability to pay high salaries - albeit this may serve as an initial attraction. This empathy is also a fundamental influencing factor in the development of your reputation with external customers. We already know that there is a direct correlation between Empathy ( as measured by ERIC) and profit ( as measured by Return on Capital Employed) and it is equally clear that there is a strong correlation between Empathy and Reputation. We know that a company that understands and responds to all its Stakeholders ( Customers, Shareholders, Suppliers, Community and Employees and their families) is able to charge more for its products and services as well as build up market share at the expense of its competitors ( a good example would be Innocent Smoothies in the UK). Add this to the improved returns on capital employed and suddenly understanding empathy becomes a priority. Retention The Harding & Yorke Empathy Scale is a 10- point combined numeric and verbal scale. It ranges from 1 ( you can't imagine how it could feel any worse) to 10 ( you can't imagine how it could feel any better). N. B. The Empathy Scale referred to here has been developed by H& Y and is the scale that has been academically calibrated. Typically, the customer experiences delivered by a single organisation's people will fall within a four point range on the Empathy scale, i. e. between 4 and 8, 3 and 7 etc. This is for a number of reasons including: . The organisation's culture & approach . The way you train your people . The processes you expect them to follow . Reward and recognition . The environment that they are in . The function and channel in which they work. However, as in all situations you will have people who are either particularly good (' Mavericks') and those that fall below organisational expectations (' Saboteurs'). The ideal situation is to lose those people or behaviours that do your business and its reputation harm, and retain and learn from those who are better than average. Unfortunately the natural organisational pattern ( if it left to its own devices), is exactly the opposite of this. USING ERIC TO INFLUENCE HR ELEMENTS OF OPEX - CONTINUED

© 2009 HARDING & YORKE 70 60 50 40 30 20 10 0 70 12345678910 EXTREMELY BADBADNEUTRALGOODEXTREMELY GOOD MAVERICKS LIKELY TO MOVE 17 Mavericks will feel increasingly uncomfortable and will be counter- culture. In many cases they are what they are because they disregard processes that do little to enhance the Customer Experience. Unless you can learn from these people and engage them as Champions they will leave to find a culture that they can feel comfortable in. Saboteurs however are also counter- culture. Often they are the way they are because they religiously stick to the processes you expect but apply minimum effort and have little empathy for the customer. Instead of feeling the need to leave your company to seek pastures new, they will dig in and try to draw more and more of your people into their world. This is why these people, in particular, are dangerous to your organisation. The problem is that in defining the processes you want them to adhere to often the attitude or the outcome is left out. In other words and through their eyes they are doing nothing wrong - doing exactly what was asked of them. Golden Rule - Know your mavericks and saboteurs. Golden Rule - Set internal standards and measures ( such as those found in ERIC), that encourage, motivate and set an expectation of positive Customer Experiences. Use these as part of your individual performance management programme. Saboteurs then find their options are twofold. Firstly: to conform to the new environment ( with support and coaching) and be a part of a winning team, or secondly: to leave; because they have no intention of conforming. By setting and managing standards in behaviour you also have more control of your options and your ' saboteurs' become your competitors' problem - win- win. THIS ARTICLE IS CONCLUDED ON THE ENCLOSED INSERT. AVERAGE 6.48 SABOTEURS WILL STAY TO THE BITTER END