Friday, August 2, 2019

Table Stakes Not the Same Thing as "Delighting the Customer or Employee"

There is, in organizational theory, vast difference between employee or customer happiness and unhappiness; satisfaction and dissatisfaction; reasons to leave or stay. There is a difference between product or job attributes that are necessary, and those which create commitment, motivation, loyalty, differentiation, value, joy or happiness.

Motivators include such attributes as challenging work, recognition for one's achievement, responsibility, opportunity to do something meaningful, involvement in decision making, sense of importance to an organization, other forms of recognition, achievement, or personal growth.

Hygiene factors are different. These are attributes whose absence causes customer or employee churn or unhappiness on the job. These include attributes of job security, salary, fringe benefits, working conditions, vacations and so forth whose absence or insufficiency cause people to want to leave.

The important observation Herzberg made is that hygiene factors can cause people to leave, but they cannot make people “motivated,” loyal, committed or enthusiastic.

Those outcomes are on a different scale, entirely. “Hygiene” (maintaining health) inputs only prevent your customers and employees from wanting to leave you.

But hygiene does not--and cannot--lead to “delight” with a product or commitment to an organization. Put another way, some categories of customer or employee benefits--pay, working conditions, fringe benefits--can keep employees or customers from deserting. But those inputs cannot create the motivation to excel on the job or create “moments of joy” for consumers.

Where we often think of satisfaction and dissatisfaction as opposite ends of a single scale, theorists argue that there are two separate dimensions of experience.

On one scale are practices that make employees or customers more or less unhappy. On the separate scale are practices that delight customers. In other words, dissatisfaction and happiness are orthogonal.

At a high level, there are four possible combinations of hygiene and motivational factors:

1. High Hygiene + High Motivation: The ideal situation where employees are highly motivated and have few complaints; customers absolutely love a product

2. High Hygiene + Low Motivation: Employees have few complaints but are not highly motivated. The job is viewed as a paycheck; customers use a product, but do not love it

3. Low Hygiene + High Motivation: Employees are motivated but have a lot of complaints. Perhaps a job is exciting and challenging but salaries and work conditions are not up to par. In the consumer realm, In the consumer realm, this might include any number of apps, devices or services that are highly desired, but too costly, in terms of value, compared to price.

4. Low Hygiene + Low Motivation: This is the worst situation where employees are not motivated and have many complaints. In a consumer context, this is a product, app or service that does not work, provides little value, is hard to buy and use, is unreliable and also expensive.

In other words, in either a work setting or a consumer products setting, one ideally would remove sources of dissatisfaction, while at the same time increasing sources of delightfulness, commitment, loyalty and value.

This ”two factor theory, associated with Frederick Herzberg, is among the few insights from organization theory I’ve ever actually used in business life.

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