Incentive - March 2008 - (Page 12)

IN THE NEWS Beating Short-Termism In their latest book, Peppers & Rogers make a case for managing (and incentivizing) for the long-term BY LEO JAKOBSON “ Study: Consumers Will Pay for Green Electronics More than one in 10 Americans would pay more for consumer electronics that draw less power or are environmentally friendly, according to a recent study by Cambridge, Mass.– based Forrester Research M I n a survey of 5,000 Americans, 12 percent were identified as “bright greens,” willing to spend more for products that do less damage to the environment. Forty-one percent are concerned but would not necessarily pay more, and 47 percent say they are not concerned about environmental issues, the survey found. While most major electronics firms are working to reduce toxic components, virtually all electronic devices include some, such as mercury in LCD screens and lead in circuit boards. In the most recent “Guide to Greener Electronics” produced by the activist group Greenpeace, the three top-rated companies in this regard are Sony, Samsung and cell phone maker Sony Ericsson. —L.J. ost companies are good at measuring what their customers spent today, but are bad at measuring what that customer will or won’t buy in the future,” says Martha Rogers, Ph.D., a founder of Peppers & Rogers Group, the consulting arm of incentive and engagement firm Carlson Marketing. “Companies always manage the future to make the present look good, because the present is all [the managers] are responsible for.” In Rules to Break & Laws to Follow: How Your Business Can Beat the Crisis of Short-Termism, (Wiley, 2008) she and partner Don Peppers argue that this live-in-the-present corporate focus—on how much you sold today, on the company making its quarterly numbers—has driven a host of bad business decisions that companies can no longer afford. “Are we making our numbers at the expense of the future or while building the future?” Rogers asks during an interview with Incentive. “Look at trust. Social networking makes trust more important than ever,” she says, noting that one disgruntled customer can out a bad experience to millions of other consumers using Web sites like YouTube and Google. “You can’t un-Google yourself. It will be there for years and years.” The same thing, she says, applies to how companies treat employees. “Networked employees all talk to each other, too,” Rogers says. She adds that traditional companies concerned with short-term numbers are focused on the revenue employees earn today, “and reward accordingly.” For a better model, she points to a Canadian bank, CIBC, that holds employees accountable for current earnings from customers and for the three-year value of those customers. Before corporate executives can beat the short-term mindset, they need to break the three rules that have governed most of the decisions they make, Peppers and Rogers argue. These are: The best measure of success for your busi• ness is current sales and profits • With the right sales and marketing effort, you can always get more customers • Company value is created by offering differentiated products and services The current book is in many ways a followup to the duo’s last book, Return on Customer (Currency, 2005), which made the argument that long-term customer equity is a company’s most valuable asset, and then proposed a way to measure it. In Rules to Break and Laws to Follow, Peppers and Rogers take the next step and show how a focus on customer trust builds that equity and leads to profit, and then provide executives a 12-rule how-to manual for getting there. 12 | Incentive | March 2008 | incentivemag.com http://incentivemag.com

Table of Contents Feed for the Digital Edition of Incentive - March 2008

Incentive - March 2008 Contents Editor’s Note: Delivering on Diversity In The News Cover Story: Leveraging Diversity in the Workplace Incentive Interview: Paul Levesque on Why Awards Fail Case Study: AEIS’ Max!-imum Incentive Program Mine Employees’ Creativity with Innovation Incentives Incentive Must-Reads The Third Annual Gift Card Roundtable My Turn: Motivation or Bribery? Everybody Get Together In Her Shoes: Why Bosses Should Be Flexible Incentive Primer: Passport Problem-Solving potentials Here and Now Is CES Electronics Heaven? China and Crystal: More Than a Pretty Face Travel News Florida: What’s New on the Beach? Smooth Sailing for Incentive Cruising Come To Hawaii And Take It Fast Last Word: But Enough About You

Incentive - March 2008

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