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Culture Shift: The Costliest Recognition Blunder
July 29, 2008
Hint: Believe it or not, this common and super-costly mistake involves recognizing employees for doing heroic things.
By Paul Levesque
The Good News: "We're lucky to have employees who'll do just about anything to correct customer problems or errors as they crop up. We always make sure these dedicated workers' phenomenal efforts are properly recognized and celebrated."
The Bad News: "I can't figure it out. Customer problems and errors keep cropping up at an alarming rate, and the number is still growing. If this keeps up, we're headed for big trouble."
Fixing customer problems is expensive, in ways that are painfully obvious—and in additional ways that are perhaps less so. The obvious immediate costs typically include spontaneous freebies and discounts, staff overtime, hasty schedule-shuffling (which often creates further problems down the line), etc. And a second wave of cost is incurred in the prizes and awards bestowed as recognition on those dedicated employees who go to heroic personal lengths to fix these problems for customers.
But the third wave of cost—the tsunami, in dollar terms—operates at a deeper cultural level.
The Hidden Cost of Recognizing Heroic Recoveries
Most management teams have (somehow) not yet discovered the importance of establishing feedback mechanisms that make it easy and fun for customers to routinely comment on their experience (We'll look at some of these methods in next week's column). Customers therefore typically ask "to speak to a manager" only when their experience has been either extremely negative or extremely positive. Heroic recoveries are what managers hear about most often at the positive end of the spectrum, so naturally these receive the lion's share of management attention and recognition.
This creates a dangerous situation. From the employees' standpoint, customer problems become a good thing—their best chance to be appreciated and rewarded by management. If a potential problem is spotted early enough to be prevented, some employees may feel tempted to let it pass uncorrected, and then position themselves to stage a spectacular recovery when "it hits the fan."
Some workers may even feel an occasional urge to surreptitiously cause customer problems, just to set the stage for a splashy recovery. Sound far-fetched? A number of employees were informed by co-workers of such instances—and even caught red-handed—in several of the organizations I've worked with over the years. When an expression of positive recognition mutates into a potential catalyst for employee sabotage, it represents an implementation blunder so costly it could end up costing the business everything.
Turning the Spotlight Toward Prevention
Praise and recognition reinforce behavior—and behavior that prevents problems before they happen is of course more valuable to any business than clean-up behavior after the damage is done. But, in your opinion, how much more valuable? In very general terms, would you say prevention before the fact is twice as valuable as recovery efforts after the fact? Five times as valuable? Ten?
Whatever number you assign, that's the proportion that should also be reflected in your recognition efforts. That is, if you feel prevention is five times more valuable than recovery, you should be recognizing "prevention behavior" five times more prominently than "recovery behavior."
The big question then becomes, how will you learn about this prevention behavior, in order to give it the recognition it deserves?
The simplest way to uncover worthy examples of such behavior is through regular cross-functional employee meetings of a special kind. The single key goal of these meetings is to analyze (one at a time) all the various internal processes that contribute to the total customer experience, and to define for each process where problems most often originate. Each meeting gets employees collectively brainstorming modifications to the process and ways to eliminate needless steps; incorporating "early warning" measurements; or otherwise detecting and preventing errors.
While such cross-functional meetings provide scores of opportunities for later "prevention recognition," the cultural benefits don't end there. These are also powerful team-building exercises in their own right, helping workers from different parts of the organization appreciate how all their efforts are interrelated and linked by their common objective. The meetings also help streamline many aspects of the operation (and often lead to significant cost reductions). They promote employee involvement and ownership, a highly motivational combination. And they reinforce cultural alignment, by keeping all employees focused on customer satisfaction as the entire organization's ultimate goal.
One final point, related to our earlier discussion around Overcoming Resistance to Change: Ever wonder why employees have resisted your previous "quality improvement" initiatives, specifically? They may have seen your efforts to eliminate customer problems as a personal threat, an attempt on your part to deprive them of their primary means of getting noticed and appreciated within the existing culture.
Just one more good reason to change the culture, and shift the recognition spotlight from recovery to prevention: There aren't many management actions that can generate so many benefits on so many levels at once.
 Editor's note: Once again, it"s "Storybook Corner" in this week's Culture Shift video podcast. Two rival lemonade stands compete for the same customers—each using a different approach to employee recognition. Will one of them fall prey to the costliest recognition blunder? Find out by clicking here.
INCENTIVE online "Culture Shift" columnist Paul Levesque is the author of five books, including "Customer Service Made Easy" and "Motivation," both from Entrepreneur Press. He's a seminar leader and public speaker with two decades' experience as an international business consultant specializing in the connection between employee motivation and customer satisfaction. Be sure to check out all of the podcasts from the Culture Shift series at www.incentivemag.com/cultureshift.
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