The Hidden Cost of Having a Noisy Culture
All of us are faced with judgment calls every day – hundreds of them, if not thousands.
Most are insignificant, such as where to go to lunch or whether or not to wear a tie to a meeting. However, there are other judgment calls of great significance your employees make every day that could make or break a customer relationship, strengthen or damage the reputation of your brand, or ones that could profoundly impact your productivity and output.
According to an article in Harvard Business Review, Noise: How to Overcome the High, Hidden Cost of Inconsistent Decision Making, one global firm measured noise in the billions of dollars due to large gaps and variances in judgment calls made by people in identical roles or functions. Noise is most prevalent in any industry where trained professionals are placed in positions to make judgment calls, such as appraisers, credit-rating agencies, financial planners, accountants, underwriters of loans and insurance, service technicians and physicians in emergency rooms.
Examples of Noise
Assume for a moment that Marriott International contracted with a manufacturer of large, industrial dehumidification units to install them into four of its latest developments. Marriott would have a right to expect that all installations would be completed in near identical fashion, to exacting specifications. In other words, none of the installers would take any shortcuts or do anything outside of spec in the process because s/he thought s/he had a better way of doing the install. Or, taking an example from the financial industry, if an identical loan application was submitted to two different underwriters at the same lender, management would have a right to expect that both underwriters would arrive at a similar outcome. Whenever there is a variance to an outcome, there is noise, and not only is there always a dollar amount that can be tied to it, any exposure to, or evidence of noise will have an impact on a brand’s performance and credibility.
When an organization lacks a strong brand of purpose, values and culture, judgment calls are perilously driven by mood, temperament, prejudices, experiences and quite literally, whether or not someone commenced their day with a halfway decent cup of coffee.
How to reduce Noise in your organization
The first thing you’ll need to establish is a benchmark (or reference point) of how management and employees should make decisions along the analysis journey, and provide supporting explanations for each. (This will likely require an enhancement and/or modification to your training programs.) Of course, this can only be done if your brand is well-defined and supported by distinct values. And, the reason is because noise can only be kept to a minimum when everyone throughout the organization is trained to think, act and believe in the same way, and subscribe to the same philosophies of thought at each stage of the decision-making process. This is what is referred to as “culture.”
An ideal example can be taken from the vehicle rental industry when Avis boasted the tagline, We Try Harder. In this case, assume for another moment that you just landed at the airport and briskly walked to the Avis counter with your rental confirmation number in hand. When you speak with the Avis rep, you are very disappointed to learn, along with other customers, that Avis ran out of cars. Now, based on their tagline We try harder, which happens to be staring at you from the counter and the wall behind it, you would expect that Avis reps would have been directed to offer identical and equitable solutions to all affected customers – arrange for an Uber to take customers to their destinations while searches are made for vehicles in the network to be delivered to customers’ hotels, all free of charge.
In a “noisy” environment, reps would not be given such guidance and each would treat the crisis differently, based on their individual judgment calls. One rep may simply decide to apologize to all customers, issue each a refund and refer them to other rental agencies at the airport. Another may also apologize and tell customers that “all he can do” is take their number and call them when more cars arrive. And yet another rep, who is a senior manager, exercises her authority to have Avis shuttles take affected customers to their destinations and have cars delivered to each as they arrive. In other words, in a noisy environment, the way the customer is treated is based on who they happen to deal with – not on how Avis trained its employees to handle the crisis. In the first two scenarios, Avis would suffer a major blow to its brand, likely losing customers forever. In the third, Avis would have a greater chance of retaining customers who are appreciative of the rep’s efforts, understanding that sometimes sh*t really does happen.
Question: How much noise exists in your organization? Consider that the noisier it is, the more expensive it will be to your bottom line, reputation and credibility.
Scott Seroka is one of 29 Certified Brand Strategists in the U.S., and is a Principal of Seroka Brand Development and Strategic Communications.