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The Scary Facts

Empowerment is a myth, while all CEO’s think that their employees are empowered, the reality is they are afraid to make even the smallest decisions.

I don’t believe you can be a service leader without Empowerment. I’ve never met a CEO anywhere in the world who disagreed with my concept of Empowerment, which is to get employees to make a decision, on the spot, in favor of a customer. All CEO’s believe their employees are empowered. The reality is that it doesn’t happen, and empowered employees just don’t exist.

Even the most customer-driven companies like Nordstrom, TD Bank, and Dell have huge problems. They can’t get an employee to make an empowered decision. About 90 percent of all empowered decisions will cost less than $50.00. The Ritz Carlton has a $2,000 ceiling that an employee can spend on the spot. A typical guest spends thousands on a stay at the Ritz, so the amount makes sense. Maybe at your company the amount should be $200 or $500. Getting an employee to make a $25 - $50 decision in favor of the customer is like asking for two miracles at the same time. The single biggest reason employees won’t make an empowered decision is because they fear getting fired. If it’s between getting fired or losing the customer, it’s an easy choice.

“Half the money we spend on advertising is wasted, and the problem is we do not know which half.” Lord Leverhulme British, Philanthropist, Founder of Unilever

The best way to test this is to try to get employees at companies where you do business to bend the rules. Ask them, “What would happen if you made an empowered decision?” They’ll usually laugh and say, “What’s Empowerment? Are you kidding?” And when you push them further, 95 percent of the time employees will say they’ll get fired.

That same perception is true in your organization, contrary to your beliefs. If you don’t make an empowered decision, the customer will probably leave and not return. Very few customers complain or push the problem up the chain of command. They just walk. The fear that some executives have is that an employee might give away too much. I suspect that half of your marketing money is wasted. The problem is that nobody knows which half. When you put an ad in the newspaper, on radio or TV, very few people even pay attention. The truth is they’ve come to distrust advertising. Of those who are exposed to the ad, even fewer respond. Of those who do respond, you have no idea who they are or what motivated them to buy. Most marketing people claim to have these answers, but in reality they don’t.

You have a live customer in your hands and something goes wrong. Your employee could easily solve this problem with Empowerment and maybe a small amount of money. You have targeted marketing money. Isn’t it better to use your marketing money to keep that customer happy? What’s the worst thing that can happen?

An employee might give away too much. Now you have an overhappy customer. If you have overhappy customers you’ll own the market and you’ll have more money than you ever dreamed of.

Here’s an excellent example of lack of Empowerment

I was checking in for my Minneapolis/St Paul to El Salvador flight. I had no idea that, when Continental Airlines discontinued its alliance with Sky Partners, it would affect my trip. On Delta, I was a Platinum Elite traveler, which was the highest volume status at that time.

The employee at the Continental First Class check-in counter said they no longer honored the baggage allowances of Delta. I had three bags; two weighed 55 pounds, and the third weighed 45 pounds. Previously I could fly with three bags, each weighing 70 pounds.

The employee said I had to pay overweight fees for two bags and pay extra for the third bag. I had no idea of the change in baggage allowances.

What she should have said is, “Mr. Tschohl, Continental Airlines has changed its alliance with Delta. We would love to see you fly more with us, so I’m going to waive the fees and hope we’ll be seeing more of you here at Continental Airlines.” I’m probably one of the top 1 percent of flyers. If I’m not their targeted customer, I don’t know who is.

I took all the excess weight out of the two bags and put it in my carry-on baggage. They charged me for the third bag, and I was a very unhappy customer. I started to fly Delta to the same Latin America destinations.

The employee never made an empowered decision; she was probably not allowed to do so. Continental Airlines spends millions a month on advertising, just to get the attention of the few people who fly. Now, right in front of them is someone who flies constantly, and they destroy the relationship for about $100 in excess baggage fees. I avoided Continental for months.

Empowerment uses marketing money, and most companies seem to have an unlimited marketing budget. For some reason there’s a disconnect between marketing money and Empowerment. Interestingly enough, when an employee makes an empowered decision it fuels word-of-mouth advertising, which is 10 times more effective and 10 times less expensive. In my mind, that’s marketing money well spent. I have bought all my computers from Dell, but virtually no one can make an empowered decision at the company. You have to email Michael Dell to get an empowered decision based on common sense. With 96,000 employees, I have to email the CEO to get the problem solved?

This is the perfect example of a company that has lost it’s focus on customer experience and lost billions of dollars in revenue. The stock value has dropped about 50 percent since Michael Dell originally retired in 2004. An empowered workforce at Dell could restore it’s foundation of customer service and regain its number one ranking in PC sales worldwide.

Companies spend millions on the land, building the store, and stocking it full of product, all for one thing – the customer. But when the customer actually appears, they fall down on the job. All that time, thought, and money is wasted if the customer walks out, never to return. When a new Walgreens was scheduled to open near my home in Bloomington, Minnesota, I was thrilled. I had been waiting to switch my prescriptions from my current drugstore, which is slow, incompetent, and expensive, to a new place for quite sometime. Opening day, I was at Walgreens at 8:05 a.m., probably the second or third customer in the new store.

The assistant manger greeted me warmly as I came into the store. I inquired about the location of the pharmacy and the special offer for customers transferring their prescriptions. She said there weren’t any special offers.

Usually, when a new retail drugstore opens up, it has incentives to get you to move your prescriptions to that store. The real money is made as people walk to the back of the store, buying other products before they pick up their prescription. I really wanted to switch, but I wanted a deal.

I asked if she could make an empowered decision. She said NO, she would be fired. (This was her first day on the job and most employees do not want to get fired, especially on day one.) She called the store manager, who appeared with another assistant manager. They said there is normally a $25 coupon, but they could not break store policy to give it to me. Then along came a District Manager, who could not make the big $25 decision either.

Four managers were unable to make a $25 empowered decision to make an immediate sale with long-term implications. Let’s face it, if management will NOT make an empowered decision, there is little chance an employee will. The store manager said they were running an ad in the newspaper in two weeks. I should wait until then, clip the coupon, and bring it in to take advantage of the $25 special. I wanted to say, “You’re kidding, right? There are over 20 pharmacies in the local area and you are letting someone who wants to become a loyal customer wait two weeks for a $25 discount.” I didn’t say anything; like most people, I just walked out.

No one appears to have been trained on customer service, customer experience, or Empowerment. The entire focus has been on advertising. Seldom do firms understand the power of a service strategy and how it fuels the most influential, least expensive form of advertising-- word of mouth. I started helping companies drive a service culture and train their employees on customer service back in 1980. Since then, I’ve noticed ALMOST all firms are addicted to advertising.

They never hesitate to spend a fortune on marketing and advertising. Walgreens in Bloomington will spend thousands of dollars on just one ad. I suspect the cost for each person who responds will be more than $50 a person, and that is before the $25 discount. If Walgreens went to the local newspaper, TV or radio station with $25 and wanted to buy a media campaign to attract new customers, how many words or seconds would it get on any of these media outlets?

Empowerment is marketing money. All employees should have one single objective each day, and that is to produce overhappy customers. It’s really simple: smiling customers come back again and again and bring their friends, resulting in two very valuable assets to any company: customer loyalty and word-of-mouth advertising. Four managers in any organization who will not make a $25- empowered decision scares me. I would have been their first prescription customer and probably stayed with them for years, making regular purchases with long-term sales resulting in thousands of dollars in revenue.

I never did see the ad and didn’t change to Walgreens. Instead, I transferred to my local supermarket’s pharmacy. I am, however, still curious about how high you need to go in the Walgreens Corporation before you find someone who can make one tiny empowered decision.