Michael Mainelli, The Z/Yen Group
[A version of this article originally appeared as “Good Grief, Whose Customers are They”, I-FM Opinion, www.i-fm.net (June 2000) 5 pages.]
FM – Middle-people or Piggies-in-the-Middle?
My most distressing business moments have been trying to help privatised entities accept that they have customers. The distress comes from realising that the people in these entities have been isolated from nearly a century of not just business, but social, thinking and advancement. Accepting the concept of customers goes through five stages, very similar to the 5 Stages of Grief defined by Elisabeth Kubler-Ross in her book "On Death and Dying", 1969 - Denial, Anger, Bargaining, Depression, Acceptance:
Denial – “we never needed customers before”, “these customers aren’t going to change anything”, “I’ll just get on with my job”;
Anger – “well, they’ll just have to accept our needs as a business”, “why doesn’t the Government understand – how could they forsake us”, “I should have got out of this industry years ago”;
Bargaining – “we need quite a bit more time”, “how can we delay this process”, “perhaps we could enforce some fifteen or twenty year contracts”;
Depression – “I give up; my job is at risk and I don't really care any more”’;
Acceptance – “alright, well customers they are then”, “we’d better find a way to talk to these people”.
Ironically, Kubler-Ross’ stages were originally entitled The 5 Stages of Receiving Catastrophic News. Before readers have a bit of a laugh at an easy target of ex-civil servants, most FM creations have paralleled privatisation – one large owner gets determined to have a customer-supplier or lower cost FM service through in-sourcing or Best Practice, leading to contracts with an external entity. While many privatisations have still to get over their grief (one large, UK, formerly government-owned telecomms company for instance), quite a few of the supposedly private FM organisations have yet to start trying. Many FM organisations are still in Denial.
One of the most telling examples of denial is how FM companies are not seizing advantage of the internet/wwwhathaveyou. Most have sat back and watched it happen around them. Many UK FM companies had some exciting, innovative ideas five years ago – the problem is that five years on they are still ideas. Internet development moves so rapidly that if you’re not already moving fast now, you’ll never get there. The internet is a global shopwindow where an innovative idea from an Indonesian FM company can be copied (if you’re tracking things well), but is now lost to you forever as a first mover. It obvious that I don’t buy the trendy, received wisdom in the UK that first movers lose. Sure there are anecdotes and even an HBR article which purports to support the couch potato theory of strategy – wait and copy a good idea - but anecdotes and research show much more overwhelmingly that first movers win. Internet piranhas are eating FM companies’ lunches.
The key is the customer. Over the past couple of years, no FM company can deny that the internet would rank in the top two or three business issues of their customers. Customers occur at many levels and can be quite a complex issue for a FM operation. The following diagram shows the complexity of customer definition encountered by a moderately large FM organisation, which starts from the bottom of the diagram – general support services, which move away from their core customer to compete in a market.
Is there a single core customer such as the firm of origin? What is the competitive advantage and which is the core customer group? What are appropriate service extensions? What are opportunistic contracts? The majority of FM companies struggle with defining customer. Clearly, this goes a little way to explaining why they can still be in denial. Nevertheless, constant denial ensures death. What’s a poor FM company to do?
I would like to suggest that another way to approach the problem is to look at the ‘customer’ as the people served by FM services in clients, rather than as the firms in which they work. Most net growth to date has bypassed corporations and gone direct to people. These people are consumers, hence B2C largely came before B2B, but there is more than that. The internet empowers individuals first, and then, through those individuals, their organisations. The customers are 5,000 people in a client organisation, not the single client.
The internet has allowed all sorts of piranhas to go around FM companies and get straight to their customers’ desktops – stationery provision, power contracts, car hire, travel arrangements, temporary staff, package deliveries, time recording, even cleaning and catering. Companies that allow other companies to get to their customers directly, through lack of thought or sloth, die sooner rather than later.
FM companies should be looking to the desktop for their internet strategies. I will make the assumption that for most FM organisations their customers will be middle managers who spend a reasonable amount of time as white-collar desk jockeys. We need to look at building markets for them, which provide services they need as people, not as cogs in the client machine. We should be at the centre of providing their real needs - flowers for spouses, preparing presentations, arranging childcare, analysing financial statements, evenings out, report production, refrigerator servicing, mortgage help, and so on. We can be their ‘hortal’ to the world when they are at work – a portal which delivers information about and connections to a wide range of horizontal services. There is value in being a hortal middleman (see value creation at one of the first hortals, www.itnetwork.com). When we add value, we will find ways of sharing some of that value ourselves.
In order to keep control of these customers we need to control that desktop. The four basic interactions are the telephone (don’t forget to control your helpdesk/customer support and look for outbound applications), the messenger (yes, physical delivery is still crucial), the direct service (think about your walking about account managers and the temporary staff you deploy) and the PC on the desk (if you don’t provide the IT, set yourself the target of making your homepage on the client intranet the preferred intranet portal for desktop users). If we control the desktop, and the relationship with customers, we can eat those internet piranhas for our dinner.
When dealing with grief, we need to look ahead. The internet is depressing for an FM company just starting to come to terms with customers but, as with most misfortunes in life, it really opens up many more doors than it closes. Professionals in grief work sometimes use the acronym TEAR to help remember the four tasks in moving people past grief:
To accept the reality of the loss
Experience the pain of the loss
Adjust to the new environment without the lost object
Reinvest in the new reality
The 5 Stages of Grief occur in the first task. We’ll know that FM companies have moved past the grief of having customers when we see the substantial reinvestment they make in wwwebways of taking advantage of the new reality for their customers.
Michael Mainelli is a Director of Z/Yen Limited. Z/Yen is a risk/reward management firm which uses risk analysis and reward enhancement techniques to improve organisational performance. Z/Yen advises FM organisations on strategy, systems, people and organisation. Michael has been on both the supplier and the customer side of FM and IT deals for 15 years, as well as served on the board of one of the UK’s largest FM organisations.
For those who wish to explore other thinking on Kubler-Ross’ work, I have drawn in the first instance from: http://www.death-dying.com/grief/griefstages.html, although I do recommend her book heartily, even if more for personal than professional use.