Slow Leadership

Despite what they say — and often even think — many, perhaps most, companies are surreptitiously at war with their customers. Through nuisance games, dirty tricks and small print they take everyopportunity to extract more from your wallet for no extra service. . . . Trivial stuff, you might think. But the consequences of this subterranean struggle are momentous. We don't trust our service suppliers and are increasingly willing to drop them at the drop of a hat. Despite huge amounts spent on aids like customer relations management software, customer satisfaction levels are low and falling, and so is the esteem in which business is held. On the company side, that translates into more effort (to replace lost customers) for lower growth.

The culprit . . . is the profit-based system most companies use to manage performance. Managers are judged and often rewarded on their profit figures. But financial measures make no distinction between how profits are earned. Are they the result of creating new value from customer relationships ('good profits' from increasing loyalty), or were they earned by appropriating value from them ('bad profits')?