Organizational Behaviour vs Organizational Theory

Organizational Behaviour (OB) is a study of people. While this could be likened to the famous Pavlov and his experiments with dogs, in this case, the study is specifically around the attitudes and performance of people in organizations.


OB tries to analyze how the work performed contributes to the effectiveness of a business and it specifically looks at it in three different ways. From the point of view of the individual, the group or team and then the larger organization itself. At the individual level, OB focuses on what makes an employee tick and looks at things like motivation, leadership and employee attitudes to work. This analysis is very specific and focused on the employee level. From the point of view of the larger organization, organizational theory (OT) becomes the tool of choice and its focus is targeted more towards structure and design at the organizational level.

Both disciplines are heavily guided by psychology (how people interact and work together), anthropology (the culture of different people) and economics (why and how people are incentivized with respect to motivation). 

Management & OB

Management is generally defined as the process of planning, organizing and leading the people and processes within an organization. Traditionally managers were responsible for supervising and motivating subordinates, but newer styles of management focus more on allowing a manager to be someone that enables and coaches an employee to succeed. The old-fashioned style of repetitive, activity-based management is changing to a more proactive method. Management and its definition is something that changes from organization to organization - there is no "one guiding principle" that all managers follow as it evolves naturally from the environment.

There is a strong relationship between OB and management where OB tries to explain how and why people act in certain ways due to current prevailing theories. These theories are often focused on many of the day-to-day responsibilities that managers face. OB in this context is the theory that managers use to put practical applications into effect to benefit the organization that they work for.





Why Managers Need To Understand Organizational Behavior

Regardless of if you spell it Behavior or Behaviour, Managers need to understand what makes their teams "tick". With the internet continually forcing businesses globally to become ever more innovative with little to no increase in resources or budgets, it's essential that companies embrace this challenge if they want to survive.



Over the course of the coming months, I shall be covering a key discipline of management - namely Organizational Behavior & How it Impacts Team Management. For some of you, this might seem a departure from a blog focused on customer service and operations, but I believe that if you want to have a successful team, you need to understand how to lead and grow that resource.

With the growth of the "gig economy" and freelancing taking an ever-larger proportion of the employment pie, understanding how to manage and lead teams is even more important. Now, the simple 9-5 office worker drone is frequently replaced by remote staff either working from home or performing a job in another country. Leading teams separated not only by geography but possibly time zone and culture has challenges that are quite distinct and finding a happy medium is key. 

However, Organizational Behaviour (OB) is not only about the teams and management. Key criteria that I've spoken about often is the requirement of understanding the importance of Quality within the organization. This could be through the use of tools like Six Sigma and ITIL, but those also are just a "symptom". It is important within the organization to realize that Quality matters and that it's only by continually striving to improve can true success be achieved.

Understanding NPS, How It Works & Whether it’s a Measurement that Makes Sense



Improving customer experience is one sure-fire way of expanding your business and establishing a credible brand name for yourself. After all, who doesn’t want their brand to be known for a great customer experience?! Great customer experience is essentially the key to a successful business. So why not use tools to help you improve your customer experience? There’s an abundance of tools available both online and offline that are designed to help you achieve the ideal you’ve envisioned for your clients. However, few can boast the power and usefulness that the NPS can provide you with.

So, What Is This “NPS”?


NPS stands for Net Promoter Score and it was developed by Fred Reichheld. It helps to create a clear and understandable customer satisfaction score which can then be used as a comparison between various businesses over even a single business across an extended period of time. This is done through surveys (we’ll get to that in a bit), and sometimes questionnaires, which are directly given to consumers so that accurate data can be collected. Of course, you’re probably wondering where this happens.

Well, think about any random time you ever got a pop up on your screen while you were visiting a website. Often times you will get questions like “would you recommend this product (or service) to a family or friend?”. Considering how little time it takes, you will probably answer and then continue your search. Well, that is the kind of surveys used to determine the NPS. They’re short, to-the-point and strategically placed by companies so that you answer them as honestly as you can as you’re doing your search.

Calculation


The NPS question given to the customer will generally include an 11 point scale from 0 to 10. Think of it as a rating with 0 meaning that you are not likely to recommend it at all to 10 meaning that you are extremely likely to.

According to the NPS guidelines, consumers can be broken down into three categories:

Category #1: Promoters


These are the people who will be giving your recommendation question a 9 or a 10. We call them promoters because they are very likely to spread the word about your product


These are the people who loved your customer service and will probably be advertising your brand to others through the word of mouth; never underestimate the power of word of mouth! It is a great, genuine and free advertisement for your business and as such makes promoters very valuable.

Category #2: Passives


Next up are the “passives”. These are the people who will give a score between 7 and 8. These are the most vulnerable of your clientele. Why? 


Because, unlike the promoters, they aren’t spreading the word about how great your brand is. They’re just there because. 

They don’t love your brand; they don’t hate it either, but they can be easily diverted elsewhere if the competition is offering the right price tag.



Category #3: Detractors


Detractors are the unhappy customers who’re giving you’re a score of 0 to 6. These are the people who can cause some serious damage to your brand. Like the promoters, they’re going to be spreading the word...of how bad your brand is. 

You need to make sure that you do not have a lot of detractors because they can seriously hinder the growth of your business.

In order to calculate your Net Promoter Score, you subtract the percentage of detractors from the promoters. The NPS is not expressed in terms of percentage. It needs to be an absolute number between -100 and +100. Generally, a positive NPS is considered good for businesses. In fact, many businesses aim to make sure that their NPS does not fall to zero or negative as zero shows that your business is stagnant while a negative NPS will show that your business’s customer experience is bad and that there are more detractors than promoters. This will, in turn, lead to a series of losses for you, so it is vital to make sure that your NPS is always positive.


By using this data, you can begin to plan a business strategy that improves your NPS.

Why Is It Important?


The biggest advantage of NPS is that it is able to provide a simple, yet holistic, understanding of your customer experience. This coupled with the fact that your customers are the ones directly answering questions without any filter, provides you with accurate data. 


The NPS is able to give you the real picture of how your clients perceive your business. Similarly, by comparing the NPS of other businesses, you can determine how well you’re doing. In some sectors, the NPS score rarely comes out to be more than +50 and even though this may not look good, if held up against the rest of the market, you will find that the NPS of +50 might actually be the score of the highest performing company in that industry. 

It’s relative yet it does not generalize or marginalize any competitor. You get a clear picture of what’s happening and that is great for business. There are many other benefits to the NPS which you can find here.

Does It Make Sense?


While it might initially take some time to wrap your head around it, once you get it you'll realize the NPS is actually really easy to use and understand. While other tools can be very complicated, the NPS is simple, and its effectiveness lies in its simplicity. 


The results are pretty clear: the promoters are your loyal customers, the passives may be deterred away and the detractors are leaving. As we’ve already said before, you can use this to your advantage and establish an order that helps to grow your business. It accurately shows how your client feels.

Consumer Trust (Part 2)

Customers’ Preference for Innovation 

In this world of ever-increasing change, companies have the chance to improve customer trust through innovative technological advances. Research has shown that customers have a preference for companies that have implemented innovative strategies of operation. Historically this innovation has taken the shape of improved efficiencies in business but today the provision of digital services is a key preference. 

Brands that use intelligent software like AI have a sharper impact on customers due to the user experience they have when engaging with these companies. Innovation in technology also offers brands a chance to engage customers in different ways while also providing customers with a variety of tools they can utilize to improve customer self-service

Customer expectations are being surpassed due to the multiple possibilities that have been brought about by the implementation of technological innovation. When customers realize that they can get digitized customer service and engaging artificial technology, they develop trust in the brand owing to the ease of engagement with brand services. Technological innovation has so far been a major driver in building customer loyalty and improving customer experience.


Data and Improving Customer Trust

Customers are sensitive about their personal data. Research findings have proven that more than 75 % of customers will not purchase services or products from a company that is not assured to protect their personal data. The pool of customer data collected is like an oil field-rich in possibilities. Aside from brand owners, customers have also come to understand this fact and since then have been protective of their personal data. 

With this in mind, companies have to maintain ethical and responsible data practices that will see them become more effective in handling customer data. Data practices within the organization can only be successful if the employees are correctly trained. From the management level down, employees should be able to maintain a high level of data integrity in a bid to protect customer data

Ethical practices in handling customer data will ensure that customers are satisfied with services which eventually improve customer trust. This commitment maintained in handling customer data with care goes a long way in drilling employees towards a positive culture of data integrity. Through a systemic operational framework in data management, a company can establish strong data principles that will ensure customer satisfaction and improved CX.

Engaging Customers

Most of the time, customers do not have a way of ascertaining whether the company they rely on preserves or misuses their private data. This can make them skeptical as to whether the brand is, in fact, protecting their personal data. 

A recent trend in customer service has been formulated to engage customers in data management practices. Here, customers are able to participate in data protection practices like authorizing the use or manipulation of their data by the company. In this way, brands can directly address customers in matters related to their personal data. As customers’ preference for ethical data practices increases, businesses need to take the initiative and provide ways through which they can provide customers with a chance to protect their private data from ill use.


Having a Competitive Edge

Every business is in a competition with others in their sector and they are all competing for a chance to show the customer who can best provide the service to their liking. 

True to the fact, customers are more receptive to companies that they think offer a differentiator when compared to the other companies. This matter of maintaining the top spot among your competition impacts heavily on customer perception and eventually customer trust. 

Customers will be automatically driven to your brand since they deduce that being the best, your brand offers most of the needed services in customer support and service provision. If a brand can maintain a high appeal from customers and relative brands as well, then they are in a better position to improve customer loyalty and customer trust in the brand. 

Customer Convenience 

As customers engage with business services whether online or offline, they have to enjoy an ease of operation. If the customer finds interaction with your brand representatives tedious or too long, they won't take long before they switch off and move to more promising brands. 

We live in a digital world where almost everything revolves around mobile phones and computers. Most people are usually stuck on their phones and computers for a large part of the day making it a concrete pathway for brands to engage with customers. 

Developing mobile-friendly websites and automated assistants can go a long way in improving customer experience. If a customer can receive brand assistance quickly as he navigates through social media and other similar sites, they are likely to enjoy the brand service and observe brand trust in the long run. Making operations customer friendly and easy to access for customers is very vital in maintaining your customer base while also providing good customer experience. 

Conclusion

Probably one of the most relevant points to make here is a simple recitation of a quote from Warren Buffett. Buffett stated that

 “It takes 20 years to build a reputation and five minutes to ruin it.” 

For many of the companies that have been impacted by data breaches, hacks and security scandals the impact to the business is still only just being realized. Companies need to realize that their customers' matter and they need to put the necessary effort and systems into place to protect their most valuable commodity – you and I!