July 2006

Lake_wobegon_usa_lgHarry Beckwith’s Invisible Ink column for July had some interesting thoughts worthy of consideration.  First, Harry noted that 80% of surveyed companies said they delivered a “superior experience” to their customer.  The customers, on the other hand, said 8% of companies delivered a superior experience.  This gap, which Harry (and others) label The Lake Wobegon Effect, exists with the delivery of legal services too.  Survey after survey confirms a similar gap in perception between lawyer and client.

Harry defines The Lake Wobegon Effect thusly:

Humans are prone to Overconfidence Bias: we consistently think we are better than we are. That assumption, and the complacency it encourages, explains why companies everywhere are failing to satisfy people’s growing demands.

Harry also notes that the comparison clients make is not to your competition but to the best service providers.  Again from Harry:

Customers do not measure companies like yours against your competitors. They measure you against the best providers: Jet Blue, Starbucks, Federal Express and Four Seasons Hotels. If a coffee shop staffed by kids overcharging us for coffee can deliver a superior experience, customers have decided, why can’t everyone?

Harry provides some suggestions, which are worthy of consideration, essentially taking small steps to be sure you are moving and involving the “alphas,”  the top executives.

Here’s my question:  Why does The Lake Wobegon Effect exist among lawyers?  We hear frequently that we are hyper-critical, tend toward analysis-paralysis, etc., but I’ve never heard that we are bad at those things.  Instead, our whole life’s orientation is toward being good at those things.  But if we’re at all good, how can we be so blind as to think we are providing an exceptional service experience when the ultimate judge of that issue has determined that we are not?  Is the answer simply that we are only good judges of reality when we look outward?  Or is it that our skill is really in the world of the hypothetical–“this might not work because”–rather than in a more concrete setting?

What’s the answer for a firm wanting to know if it is really providing the best possible client experience?  At this point, it seems clear that an external judge is necessary.  But one not afraid of delivering bad news.

Abandoned busI was cruising through my Bloglines feeds and stopped at Golden Practices (nicely redesigned).  Michelle Golden is one of my favorite bloggers.  That’s why I was so surprised by how much I disagreed with her post on The ‘Good To Great’ Bus Metaphor.  For those of you who have been on vacation for the last five years, Good to Great, authored by Jim Collins, has overtaken In Search of Excellence as the all-time best-selling business book.  In G2G, Jim Collins studies 11 companies that were transformed from ordinary performers (vs. the market) over a 15 year period to companies that outperformed the market by at least a factor of 3 over a later 15 year period.  Collins and his team studied those turn-arounds, including comparing each company to a well-known and regarded direct comparison company.  Collins identified a small number of factors that the data establish as instrumental in the change from good to great.

One of the factors is “First Who … Then What.”  In Collins’ words:  “We expected that good-to-great leaders would begin by setting a new vision and strategy.  We found instead that they first got the right people on the bus, the wrong people off the bus, and the right people in the right seats–and then figured out where to drive it.  The old adage “People are your most important asset” turns out to be wrong.  People are not your most important asset.  The right people are.”

Michelle had run across a post by Phil Gott that appears to take issue with the merit of Collins’ conclusions as applied to professional service firms.  Following Gott’s lead, Michelle concludes her post with this point:

‘Tis true that, as Gott shows us, firms are built a bit backwards. Accountants would say we’ve “backed into” our passenger list and varied routes. My Grandpa used to say, “Do your feet smell and does your nose run? Then you’re built backwards!”

Can we at least agree that we need our long term strategy first (destination and routes) before we determine if we have the infrastructure (fleet and drivers) to get there?

Maybe more people will come along for the ride (passengers) when we’ve established those first four things. Could this be a clue how to resolve the growing problems in recruiting and retention?

Unless I am misreading this, I see Michelle as asking if we can agree that Collins’ finding isn’t really applicable to professional service firms, that unlike his good-to-great firms, professional service firms can set vision and strategy before getting the right people on the bus.  I feel compelled to respond.

First, Collins’ discussion of “right people” is about the executive core, not production workers, middle management and maintenance crews.  Its the leaders, not the followers. So I don’t see this finding being at all relevant to recruiting and retention.  Those people don’t yet have seats on Collins’ bus.   Second, I would need to see data from professional service firms that have gone from good to great that shows Collins’ findings don’t apply for me to jump to that conclusion.  The fact that there are so few and that it is so hard to do is perfectly consistent with the fact that out of a universe of more than 1000 companies (all companies that were ever part of the Fortune 500 during the period 1965 to 1995), only 11 made the move from good to great!  The same difficulty will be experienced by professional service firms!

In a number of things I’ve read, I’ve seen people argue that because Collins’ findings are counter-intuitive or because they are so hard to apply (where do we sign up for Level 5 leadership classes?), they just can’t be true.  Me?  I look at the findings just the other way:  Because moving from good to great is so hard (as evidenced by the discovery of just 11 businesses that did so), it is a certainty that most firms will fail to make the move.  But its their failure not that Collins is wrong that explains why most firms don’t make the move.

Rock and Friends 005Rock and Friends 006  My family and I are enjoying a long weekend at our lake home in Stevensville, Michigan.  I’ve been playing with a new digital camera.  These two shots are from the top of our bluff overlooking scenic Lake Michigan.  I wish you all a happy 4th of July!