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Saturday, April 17, 2010

Broken Windows, Broken Business by Michael Levine

Broken Windows, Broken Business writes about how little things that are visibly broken which are left unfixed will feed a perception that the business as whole is also broken. This is a good book that my wife borrowed from Perpustakaan Awam Negeri Terengganu (the Terengganu State Public Library). It's located at the Lincoln's Corner and the Call ID is 659.2 LEV.

The book takes the perspective of the business owner or CEO. To address managers and employees, this is what the author has written "If you hire someone with good intentions, and that employee is trying his or her best but can't harness the skills necessary for the job, you have two choices: find another job for this person that better suits his/her skill level or fire that employee." If however, "the employee is simply not trying hard enough, or doesn't care enough to do the job properly, you have to let him or her go."

The book observes several examples of broken windows. One that really struck me of the whole concept is dirty toilets in a food business. When a toilet is dirty, the perception that a customer gets is that the business does not care enough about hygiene, they will probably think maybe the kitchen is equally dirty and maybe the business does not care about the quality of the food. That the business does not take into account of details and is not able to maintain employee discipline.

The 'dirty toilet' example reminded of me Tan Sri Halim Saad, the former chairman of Plus Berhad, the operator of Malaysia's North-South Highway. He was known to travel and visit all the rest areas along the highway and was especially meticulous about maintain cleanliness even in the toilets. Single-handedly he changed how public toilets in Malaysia should be maintained.

Another good read is on exceeding expectations. Exceeding expectations is a very simple policy that must be followed through by all employees, it is about "employees who go out of their way to help customers with a problem, who notice the regulars and remember their preferences, but are just as accommodating and helpful to newcomers." All employees need to have the attitude that "If the customer has a problem, the employee serving that customer must consider it his problem until it is successfully solved". Otherwise, if the employee is not willing to do it, the only choice is to fire that employee.

There must be an obsessive compulsion to fix broken windows. And the largest window into a business is customer service. Not solving your customer problems leads to the customer looking for other business who can solve their problems. Lower revenue means cost cutting measures that may mean good employees will not get rewarded accordingly, and eventually these will be the first to leave. This will eventually harm the business irreparably.

As the book notes "Bad customer service is the ultimate broken window".

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