Driving Significant Business Results

I was going through my notes from the past few years and I stumbled onto my notes from a book called “Turning Goals into Results” by?Jim Collins. In the book he talks about the power of something he calls “Catalytic Mechanisms”. These are devices or systems that we put in place within our businesses that play an outsized role in translating our lofty aspirations into reality.

We can understand what a catalytic mechanism is and how it helps us by looking at an example.

I would like to introduce you to?Granite Rock. They are a California-based construction materials and contracting company. They are a family business, owned and operated by the same family since their founding in 1900 (on 14th Feb – maybe that explains their focus on delighting their customers).

They introduced something they call “Short Pay”. So, what is short pay? On their website, they state, and I quote

This is not a refund policy. The customer need not pay and neither do they have to return the product unless they are fully satisfied.

By putting in this policy, they have given enough incentive for their customers to point out areas which could become problematic from a customer satisfaction perspectives and also gives the managers clear areas to focus on so that they can deliver on their promise of total customer satisfaction.

What this policy does is completely take away any place to hide for their employees, when it comes to delivering total customer satisfaction. When you have a culture where the employees want to provide awesome customer experiences for their customers, knowing what is causing dissatisfaction is a clear direction for the employees to focus on.

We can set up our own catalytic mechanism based on our goals.

Characteristics of a Catalytic Mechanism

In order create effective catalytic mechanisms, here are a few things that we need to keep in mind:

1. The mechanism clarifies what the goals are and allows our employees to take initiative and bring their creative problem solving skills to address any problems that they may discover as a result of putting in place the catalytic mechanism.
2. The mechanism distributes power for the benefit of the entire system, often to the discomfort of people who traditionally hold power. The tool empowers anyone who is willing to take initiative.
3. The mechanism should be designed such that it guarantees the result that we want to achieve. Either everything goes right the first time or if the catalytic mechanism is activated, it leads to addressing the problem identified, so that the next iteration goes as per plan.
4. The mechanism should be design such that they weed out the players who are not aligned to our goals from the system. There is no place to hide anywhere in the system.
5. The mechanism should create a flywheel effect for the business by creating a feedback loop which continuously improves our ability to achieve the goals that we set out to achieve.

The commitment of the leader who puts these in place drives the impact of these mechanisms - higher the commitment, higher the impact.

Example of a Catalytic Mechanism

Let’s say you are the CEO of a retail company and you decide to publish your phone number, publicly, at every customer interaction point and are encouraging them to call you if they were not treated well.

Now, every time a call comes through that number, the customer who called needs to be responded to and as the CEO, you need to act on the feedback given by the customer. Let’s say that the customer says that a specific employee at a specific store treated them badly or a product was not up to the mark.

As the CEO, you need to respond to the customer, thanking them for their feedback and the assurance that you will look into the matter and revert. Then you (or someone your office) need to follow up with the employee or the store or the product manager in question to figure out what happened.

The interaction is not to find or fix blame but to figure out what went wrong and what can be done to ensure this doesn’t happen again with a different customer. Once this is fixed (if it needed to be fixed), you (or someone from your office) responds back to the customer and closes the loop with them.

Once you are committed to doing this, the employees working in the frontline will get the message that this is a critical activity and one that they need to have unwavering focus to do well. This will lead to better customer experience, which in turn can lead to better business results.

This entire process will fail, if as the CEO you don’t do anything about the calls that you get or if employees think that these feedback given by customers are not looked by you as you are too busy. This entire process will also fail if you just delegate this to someone junior with no power or teeth. This process will also fail if the staff don’t know if you will be closing the loop with the customer and that you value this as a high impact activity.

Conclusion:

In conclusion, I will only say that this is a powerful mechanism, that, if used well, has the potential to deliver outsized impact. This can provide significant leverage for the impact that we can create as leaders.

The one thing that we need to remember is that we can’t be partly committed to this. This only works if we are totally committed to making this work and the catalytic mechanism we design has teeth (clear expectations about what employees need to do when the mechanism is activated and what are the consequences if not followed through, for all levels of employees).

Though this is not a new concept, I think it augurs well for us if we haven’t heard about it or implemented something similar in our organizations.

PS: This post was originally published on my blog - Leading Transformation and has been republished here.