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Friday, January 27, 2012

Measuring Happiness

BY Bain Insights, Forbes Contributor

Fred ReichheldFred Reichheld

Happiness has been a hot topic in business lately and I’ve been delighted to see such a serious subject get the attention it deserves in the corner office. In the Jeffersonian tradition, the “pursuit of happiness” is considered an inalienable right on par with life and liberty. Yet, until recently, managers here and elsewhere in the world made little effort to rigorously measure or manage happiness.

That was part of the reason I created the Net Promoter score (NPS) nine years ago. When I was considering various names for the new metric, I thought seriously about calling it the Net Happiness Score. We describe NPS as a measure of loyalty, but the overarching objective of the framework is to make people happy—so happy that they recommend a product or company to friends and loved ones so they can benefit from a similar experience.

Of course, I ended up calling it NPS. I decided against NHS as a name because I feared it might sound too corny or whimsical to hard-minded business execs, causing them to overlook the very real connection between how customers feel about their experience with a company and that company’s profitable, sustainable growth.

But even today we still maintain a not-so-subtle link between NPS and happiness through the emoticons we use to report the scores.  For example, we communicate a Net Promoter Score of 75 with a wall of faces like this:
Net Promoter score emoticon wall

It’s pretty hard to miss the link between NPS and the emotional energy of happy or unhappy people when looking at a picture like this. Using emoticons to represent promoters, passives and detractors requires little additional explanation. What’s more, the happy, passive and angry faces illustrate that making people happy and earning their loyalty creates emotional outcomes, not just economic ones.

“If you figure out how to make employees happy and make customers happy, then the business just kind of takes care of itself,” says Zappos CEO Tony Hsieh. “It’s just about delivering happiness.”



Well, it’s not quite that simple since the happiness must deliver profits—but companies already have well-advanced measures to focus efforts on profits. What they have lacked is a rigorous metric for happiness—until the adoption of NPS. Leading practitioners use different language to describe the underlying emotional engine of NPS: Apple talks about enriching lives. Intuit talks about delighting customers. Rackspace talks about “Fanatical Service.”  But they are all talking about the same thing: making customers happier.

As I have noted before, in our work at Bain & Company we find it nearly impossible to separate the notions of employee happiness and customer happiness—they are two sides of the same coin.  There is no way to consistently turn customers into promoters unless they are being served by employees who are equally enthusiastic about their work, and there’s no way employees can be enthusiastic about their work if the customers they deal with all day long are detractors.

Some leaders assume that simply making employees happy will result in happy customers. That is dangerous thinking. When employees come to believe that the job of their leader is to make them happy, the result is almost always entitled but uninspired employees—who help create fewer and fewer happy customers.

Leaders can and should treat their employees well, but they can’t make them happy. True happiness must be earned through meaningful service to others. When a customer scores an employee’s work a 9—or especially a 10—they are giving a standing ovation that provides a real source of sustainable happiness.

What bosses can do is make sure their people are in a position to earn lots of 10s from their customers—by structuring teams correctly, assigning good leaders, providing the right tools and training, supporting them with good policies and putting individuals in roles that play to their strengths. And, as important as any of these, they can install a system that measures the impact employees have on customers and lets employees hear that feedback in a timely manner.

Many loyalty leading companies install employee NPS feedback systems to work in parallel with their customer NPS systems, because they recognize the close and interconnected relationship between customer and employee happiness. Integrating those two systems isn’t always easy—employee feedback has long been the province of the HR department, and employee NPS drifts naturally in that direction.

But loyalty leaders such as Apple Retail and JetBlue work hard to ensure that employee engagement isn’t pursued independently of the goal of delighting customers. Instead, they ensure that they set up a virtuous circle that positions employees to earn “10s” from customers and to hear about it and are rewarded for it. Employee and customer Net Promoter feedback systems remain fully integrated at those companies, because they are part of the same pursuit—the pursuit of happiness.

Fred Reichheld is a fellow at Bain & Company and co-author, with Rob Markey, of The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World, published in September by HBR Press.

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Obama and Bernanke: Cooking Up Another Market Bubble?


BY James Marshall Crotty, Forbes Contributor
 
"Ben, look. You have to keep interest rates low or I am toast, dude."

The two most important leaders on planet earth each delivered major public speeches in the last 24 hours. Last night U.S. President Barack Obama, in what might be the last State of the Union address of his political career, suggested that the economy is improving, unemployment is heading down, the world is safer, and America’s standing in the world vastly improved all because of his administration’s policies. In a press conference this afternoon, Federal Reserve Chairman Ben Bernanke (by far, the most powerful non-elected person on the planet) delivered a more cautious assessment, suggesting that improved economic conditions, including decreased unemployment and steadily low inflation, will be affected by what happens in Europe and in the broader non-U.S. global economy (hint: China). Today’s upward rise in the U.S. stock market suggests that investors believe both men might be right. That is, there will be economic headwinds, but the U.S. will manage those headwinds well.



Just to make sure, Bernanke signaled that the Fed would keep interest rates low at least through 2014. This is unhappy news to America’s savers and the rabidly anti-Fed Ron Paul (who believes Fed money printing is the root cause of our economic malaise), but music to the ears of investors, new homebuyers, and for what Obama terms those “responsible homeowers” seeking home refinancing (who will now pay a 30-year mortgage rate of just 3.88%). Who knows, maybe housing principal forgiveness is on the way too (ah, heck, throw in a toaster while’s you’re at it).

But, with such initiatives, are Obama and Bernanke just cooking up another housing and market bubble to go along with the current student loan bubble?

What are your thoughts on Obama’s State of the Union and the Fed Chairman’s news conference today? Are things slowly getting better? Will we be able to manage the turmoil in Europe and a slower growth China? Will their remedies make the U.S. economy stronger long-term?

Or are these two men missing some elephant in the living room?

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‘Trillionaire’ Emperor mocked by Netizens!

kamal2

Kamal Ashnawi's tale draws scorn and sarcasm from online community

P. ARUNA aruna@thestar.com.my The Star/Asia News Network

PETALING JAYA: The Tanjung Malim-born, who claims to be a “trillionaire” and the owner of treasure stashed away in a secret cave, has got the online community buzzing about his proclamation of royalty, too.

Most of the comments were scornful and sarcastic, with many calling Kamal Ashnawi the creator of a mighty tall tale.

In response, Kamal said he was not surprised by the negative reaction, saying the “common people” would soon see evidence of his claims.

Facebook user Khairul Nizam Anuarul Hakim said Kamal’s story was illogical and compared it to popular Japanese comic character Doraemon.



“The story of Doraemon seems more logical than this guy’s story,” he said.

Kamal, 48, a Dutch citizen, claimed, in an article published in The Star yesterday, that he was a descendant of royal families in China, India, Java and Siam.

He said 86.7% of the money in the world belonged to him as he had treasures hidden in a three-metre-high cave, with gold bars stacked up like a pagoda, US$15mil (RM46mil) in jade and US$10mil (RM31mil) in diamonds and stacks of US dollars.


kamal_namecard

Kamal, who hopes to be recognised as the Emperor of Indonesia soon, claimed that the treasures belonged to the dynasties that ruled China, and that there was more in other mountains and vaults all over the world.


He had shown documents, allegedly from a London branch of HSBC, to prove that he has five trillion euros (RM20 trillion) in an account there.

Kamal said he had come forward because there were too many false claims by others who said they were owners of the royal assets.

Both the local and London branches of HSBC bank declined to verify Kamal’s claims, citing confidentiality.

Acting Indonesian ambassador Mulya Wirana said they had heard of others making such claims but “nothing of this magnitude”.

“There have been many others who have made claims about treasure belonging to Indonesian royalty and they have all turned out to be fake,” he said yesterday.

Mulya added that his government had never heard of Kamal but said he would look into the claims.

Related post:

A 'trillionaire' descendent of the Emperor of China is the ‘Emperor of Indonesia’?