I was talking to a colleague the other day and we were discussing some issues he was having at work.  He was saying how challenging it was to get his senior leadership to understand the issues the front-line employees were dealing with every day.  He said there was a big disconnect between upper management and the employees at the customer level.  I shared with him some research I learned years ago - The Iceberg of Ignorance.  It is a study done by Sidney Yshido in 1989 which indicated that senior management is so far removed that they often fail to understand business operations from the perspective of the customers and employees.  The alarming finding of this study was that this Iceberg of Ignorance can affect a company’s profits by as much as 40%.

The study was fascinating in that it found that issues known to top leadership were merely 4%, managers were aware of 9%, supervisors 74% but the front-line employees were aware of 100% of the issues that affect the quality of a product or service being delivered to a customer.  

So how can senior leaders be so clueless?

The ability to recognize and solve problems is an essential skill for leaders.  Senior leadership should be in tune with what day-to-day issues are but often these executives don’t know what they don’t know and if there is not a structured process for gathering and analyzing performance data, executives can fail to see and feel what is affecting their employees and ultimately their customers.  Whether it is faulty equipment, aging facility or broken processes, senior leaders need to be aware of them so they can help affect positive change.  

These statistics are troubling in that the very people who have the ability to improve things for the organization are the very ones who are not aware of the issues or problems that employees or customers are dealing with.

4 Ways for Senior Leaders to be More Aware of Issues that Affect the Customer

1.  Talk to the Employees

Organizations should have a structured process for senior leaders to interact with employees.  It is important for both the employee as well as the senior leader to discuss front-line issues.  This makes the employee feel valued and it helps the senior executive understand things the employee is dealing with.  A great model I experienced was employees were invited to eat lunch with the president on their milestone anniversary date.  The organization hosted a monthly lunch where the senior executives had lunch with front-line employees and encouraged employees to share ideas and work related challenges.  The model worked remarkably well and was an encouragement to the employees and facilitated quick problem solving.  We all know there are no kinks in the process when the senior executive gives the directive to fix something - so problems were resolved very quickly.  

2.  Collect and Analyze Data

Managing data is one of the critical aspects to managing any kind of operation.  Every organization should have identified Critical Success Factors that should be monitored on a monthly basis.  Executives should have a good understanding of how to interpret the data so they can help affect positive change in response to negative trending data.

3.  Manage by Walking Around

It is amazing what can be learned by just walking around and mingling with employees.  This approach is great because the employees interpret the senior leadership presence as they care and by walking around, you can observe behaviors, customer response and issues that may not be obvious as reported by data and consequently not on the radar for fixing.

4.  Test the Product or Service

Senior leaders should never be so far removed that they are not very familiar with the product or service they are offering.  Whether it is sampling the food in the kitchen of a restaurant or watching the printing process of a printer company, the senior leader should experience what the customer experience so they can help influence improvements.

The current economic environment demands that leaders of all levels be aware of issues within their organization and get involved in studying the root cause of the issues and influence putting together action plans to affect positive change.  Customers today don’t have the patience to wait around for improvements, so neglecting to break the Iceberg of Ignorance may very quickly affect the bottom line.   

Do you know what your employees know about issues affecting the organization?