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This Land of Strangers - Robert E Hall

This Land of Strangers

"..the most important book of the decade." — Richard Boyatzis, co-author of best seller Primal Leadership

Relationships, in all their varied forms, have been the lifetime study of Robert Hall. He brings a rare combination of experience as a researcher, consultant, writer, teacher and CEO in dealing with the real-world relationship challenges of modern organizations. When coupled with a decade of hands-on experience in the gritty world of inner-city homeless families it translates into a tapestry of vivid stories, well-researched and oft startling facts, and strategic insights that weave together the yet untold narrative of society's gravest risk and most stellar opportunity.

Growing Larger or Growing Smaller

Blessed are the flexible for they shall not be bent out of shape. 

• • •

Dr. Paul Uhlig, a nationally known thoracic surgeon recently asked several of us: What do you think is the most frequent question I and my team get from cardiac patients? After some lively speculation and discussion, he gave us his answer: “Don’t you guys ever talk?” Dr. Uhlig has worked intently the last few years on improving the experience and medical outcomes of cardiac patients. One specific focus is what happens in daily rounds with doctors and other staff in meeting with patients. He ticks off a list of challenges with the traditional processes: medical staff uses language that is foreign and intimidating, the story keeps changing as a barrage of medical staff meet with the patient, and often the patient feels left-out in key decisions. These factors affect patient outcomes and the financial viability of hospitals. As one hospital executive said, improving clinical quality without addressing patient satisfaction is not financially feasible. Patient communication with doctors and staff is the number one determinant of patient satisfaction.

Virtually every organization out there is dealing with a similar challenge. As organizations grow larger and more complex, areas of expertise grow deeper, more players are involved in customer/patient interactions and service delivery, and as processes grow more bureaucratic – how do we improve satisfaction of and relationship with the end-user customer or patient?

There are two paradoxical challenges that are uniquely related to organization size. First small successful organizations are concerned about how to effectively grow larger. Often their nimble, personalized, local approach differentiates them from their larger, slower, impersonal and more bureaucratic competitors. Many smaller banks have recruited refugees from large banks who have weathered the perils of acquisition, mergers, bureaucratically numbing processes and rampant downsizing. These folks are often vocal about avoiding a replay with their new employer. So the challenge is how to provide the necessary infrastructure to scale up – without losing their sacred customer and employee relationship culture. Nothing exposes organizational cracks like growth. These organizations sound a tad schizophrenic (remember that old line: I am schizophrenic and so am I) promoting the advantages of their smaller size while struggling to add infrastructure support that enables healthy growth – without losing their relational soul. The fear: the advantage of small, fuels growth which struggles to scale or as it scales becomes less attractive to customers, employees and local markets – growth shrinks growth.

Second, is the fear large organizations have of becoming so complex, bureaucratic, specialized, and distant that they lose their competitive edge. Their legitimate concern is that employees lose the ability to flex, and quickly and easily get things done that grow local customer and market relationships. We might call this the challenge of growing smaller. That is, the larger they get, the smaller are their relationships with both their employees and customers – and eventually their shareholders. The metrics of smaller customer relationships include less loyalty, fewer referrals, less tolerance for problems, greater price sensitivity, shorter tenures, and less wallet share. Interestingly the metrics of smaller employee relationships are very similar. For example, customer and employee referrals are relational affirmations, and any decline points to relational erosion. The continued movement of market share from large banks to smaller banks confirms this fear: the advantage of large scale, leads to smaller relationships which eventually limits growth – rather than grow larger, they grow relationally and organically smaller.

All of this leads to a very difficult question: How can large organizations act smaller and how can small organizations scale-up without starting to act large? There is no easy answer but as I look across industries like healthcare, financial services, real estate and retailing, I see three key components.

First, we must embrace our relationships with customers and employees as our highest priority. That means that every decision and action – financial, IT, marketing, people – must be designed to grow our relationship capacity – larger, longer and more productive relationships. While that sounds like common sense, it is often not common practice.

Second it means designing and refining our processes such as customer management, marketing, recruiting to be relationally accretive. We must continually add value and expand the relationship platform. Mostly our processes are designed for efficiency, quality and control – all important things. However, if they are toxic for relationships – then the diseconomies of relationship destruction will overtake the economies of scale.

Dr. Uhlig contends that the traditional process doctors apply for making rounds provides efficiency and autonomy for the various doctors and specialist but is often relationally negative. It  leads to patients who are confused, alienated, dissatisfied and thus less clear and committed to crucial medical instructions during and after their stay which harms patient outcomes, hospital brands, and future revenues. He and his team have redesigned the process of making rounds. Rather than generalists and specialists doctors and staff meeting one-at-the-time, they meet as a team encircling and engaging the patient (and family) as key questions and decisions regarding prescribed medications and procedures are handled live. They even discuss different opinions so at the end of the “round” there is no confusion regarding, “Is that your final answer.” They literally put the patient relationship in the middle of their process and then designed from there.

Third it means empowering local teams with the flexibility and accountability to tailor common processes. A seasoned real estate agent with one of the top firms recently explained to me that autonomy of local market teams drove their sustained success. The trick: ask a common set of questions and find the unique answers. Doing the same thing in every market ensures mainly doing the wrong thing in most of them because markets are different. Empowerment yields a big advantage: stronger customer and employee commitment. As Michael Porter of Harvard has famously said, ’A-level’ level commitment to a ‘B’ strategy beats ‘B-level’ commitment to an ‘A’ strategy.

Relationships are the key differentiator between growing larger and growing smaller.

(Column appeared originally in ABA Bank Marketing magazine – December 2012)

By ROBERT E. HALL

Not to be reproduced without written permission. All rights reserved. © Copyright Robert E. Hall 2012

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