Image courtesy of Flickr user DaveMN

Spring 2014
Volume 55, Issue # 3

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Special Report: Understanding Your Customers

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From the Editor: How Important Is the Customer’s Voice?

It’s easy to say customer satisfaction is very important – but harder to put that into practice.

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Reading Global Clients’ Signals

Big data analysis can help geographically distributed companies monitor customer satisfaction.

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What Unhappy Customers Want

Customers are unsatisfied with complaint handling despite years of effort. A new approach is needed.

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The High Price of Customer Satisfaction

Misguided attempts to improve satisfaction can damage a company’s financial health.

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The Pitfalls of Project Status Reporting

  • Research Feature
  • Read Time: 17 min 

Accepting five inconvenient truths about project status reporting can greatly reduce the chance of being blindsided by unpleasant surprises. For instance, many employees tend to put a positive spin on anything they report to senior management. And when employees do report bad news, senior executives often ignore it. Overconfidence is an occupational hazard in the executive suite, and executives need to examine their own assumptions and beliefs about project status reporting.

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Should Your Business Be Less Productive?

  • Research Feature
  • Read Time: 17 min 

Research suggests that productivity improvements can have counterproductive results in a service business. Productivity gains are not always easy to make without sacrificing perceptions of quality, and unlike on the assembly line, increased productivity may not always lead to increased profitability. Instead, in a service business, productivity must be treated as a strategic decision variable.

tupungato/iStock Editorial/Thinkstock

Reducing the Risk of Supply Chain Disruptions

  • Research Feature
  • Read Time: 23 min 

Most managers know that they should protect their supply chains from serious and costly disruptions — but comparatively few take action. The dilemma is that solutions to reduce risk mean little unless they are evaluated against their impact on cost efficiency. To protect their supply chains from major disruptions, companies can build resilience by segmenting or regionalizing supply chains, and limit losses in performance by avoiding too much centralization of resources.

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Finding the Value in Social Business

  • Research Highlight
  • Read Time: 21 min 

A recent survey by MIT SMR and Deloitte shows that companies are starting to derive real value from social business — with the payoff concentrated most strongly in companies that have reached a certain level of sophistication in relation to their social business initiatives. The higher a respondent rated his or her company on a “social business maturity” scale, the more likely he or she was to report that the company is deriving business value from its social business initiatives.

Justin Sullivan/Getty Images News/Thinkstock

The Surprising Benefits of Nonconformity

  • Research Highlight
  • Read Time: 6 min 

New research finds that under certain circumstances, people who deviate from a dress code or other norms in appearance are perceived as having higher status and greater competence. Studies found that nonconformity leads to positive inferences when it is associated with deliberateness and intentionality. On the other hand, nonconformance due to lack of awareness does not lead to positive inferences from others. And nonconformance is risky: It comes at the cost of abandoning a comfort zone.

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Image courtesy of Flickr user Sjors Provoost

How to Win a Price War

  • Research Highlight
  • Read Time: 10 min 

There are usually no winners in price wars. But under the right circumstances, it’s possible to win a price war by leveraging a specific set of strategic capabilities. These include the ability to read how things are changing, the skills to analyze data to identify trends and opportunities and the wherewithal to implement organizational changes both internally and across the value chain. Albert Heijn, a Dutch grocer, started and won a price war through its strategic capabilities and skills.

Image courtesy of the World Economic Forum/Flickr.

Creating Societal Benefits and Corporate Profits

  • Research Highlight
  • Read Time: 10 min 

The odds of launching a new business that creates value for both the company and the public can be improved with good planning. An in-depth analysis of how four companies created for-profit initiatives that also have high societal value suggests that each followed a similar step-by-step process to achieve what the researchers call synergistic value creation. Those steps include establishing cross-business incubators and installing multi-perspective monitoring systems.

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Is Your Brand a Living Entity?

  • Opinion & Analysis
  • Read Time: 3 min 

Traditional ways of building brands have passed their sell-by dates, while social media opens up new possibilities. Effective Twitter strategies, for instance, are helping brands such as Starbucks and Whole Foods gain a special status and sense of personality among some of their Twitter followers.

Image courtesy of Flickr user DaveMN

What Unhappy Customers Want

  • Research Feature
  • Read Time: 13 min 

Companies have tried for decades to improve customer complaint resolution — without notable success. Customer expectations are rising; customers now expect positive results and not just the chance to complain. Many customers want nonmonetary remedies, such as an apology or a chance to vent. In addition, companies must recognize that they must treat every customer interaction as if it were playing out on a Facebook page or a YouTube video, because it might be.

Image courtesy of Flickr user mike fabio.

The High Price of Customer Satisfaction

  • Research Feature
  • Read Time: 25 min 

No company can last for long without satisfied customers. But misguided attempts to improve satisfaction can damage a company’s financial health. Research finds that the relationship between customer satisfaction and customer spending behavior is very weak, and that the return on investments in increasing customer satisfaction is often trivial or even negative. What matters is how customers rank your brand in satisfaction relative to your competitors.

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Free Article

From the Editor: How Important Is the Customer’s Voice?

  • Opinion & Analysis
  • Read Time: 2 min 

It’s easy to say customer satisfaction is very important – but harder to put that into practice. The Spring 2014 issue of MIT Sloan Management Review features a special report on understanding your customers, from gauging global clients’ satisfaction through the use of big data to figuring out better strategies for improving customer complaint resolution.

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Reading Global Clients’ Signals

  • Research Feature
  • Read Time: 17 min 

How can geographically distributed companies monitor large clients’ attitudes about their services? Traditional customer satisfaction surveys can lack sufficient timeliness and detail. But taking a big data approach to analyzing collaborations lets companies gain valuable and timely insights into client satisfaction. Examining the structural properties of email communication patterns and correlating them with external performance metrics can offer managers helpful insights.

Photo by Bengt Wanselius

Combining Purpose With Profits

  • Research Feature
  • Read Time: 23 min 

A sense of purpose that transcends making money can motivate
employees. But to sustain both a sense of purpose and a solid level
of profitability over time, companies need to pay attention to
several fundamental organizing principles.

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Avoiding Layoff Blunders

  • Research Highlight
  • Read Time: 8 min 

It’s surprisingly common for companies to make mistakes in their layoff decisions — and those mistakes can be expensive for both the individuals affected and the organization. Fortunately, simply by avoiding five common decision-related problems, businesses can do better.