Here’s how to prevent ‘nincompoopery’ at your organization

If you’ve ever gotten off the phone with a customer-service rep feeling even more frustrated than you did before calling, or have witnessed top talent leaving the organization because they felt stymied in trying to do their jobs, then you’ve probably witnessed the effects of what the author of a new book refers to as “nincompoopery.”

John Brandt, whose book is titled Nincompoopery: Why Your Customers Hate You—And How to Fix It, defines the problem as “corporate stupidity that drives our customers crazy, makes employees feel terrible and kills our profits.” Nincompoopery refers to silly and unnecessary rules, practices and management behaviors that rob employees of initiative and prevent them from serving customers and clients in the best way they can. Although individual managers and employees may be labeled as nincompoops by frustrated customers or colleagues, he says, the real problem is often the “ridiculous and outdated organizational structures” that make them seem like nincompoops.

Brandt has spent the past 16 years as CEO of global research firm The MPI Group, where he’s interviewed, studied and surveyed executives at more than 50,000 companies. He’s also the former publisher and editor-in-chief of IndustryWeek magazine. I recently spoke with him about his new book; our edited conversation follows below.

First, what’s up with the book title–Nincompoopery?

Nincompoopery is around us all the time. It refers to the way we’ve failed to organize our companies in a proper way so that our customers feel well served and our employees feel empowered to serve them. A lot of times we just get comfortable with the way things are and stop looking at things through the lens of the customer. Many managers have this mindset that “Oh, customers are cranky and stupid”—well, they’re not stupid but they are cranky, and it’s because you’re not giving them what they wanted or expected. Most of the time a cranky customer can actually help you. It pays to listen to them. After all, there are lots of studies out there that demonstrate it’s five to 25 times more expensive to acquire a new customer than to make an existing customer happy again.

Can you share some examples of nincompoopery at organizations?

Let’s take innovation, for example. Lots of senior execs are in favor of innovation, but the problem is they think it has to be some sort of massive technological breakthrough. Look at the Segway: It was supposed to revolutionize transportation, but it ended up selling far fewer units than predicted. Most people simply couldn’t figure out why they needed one. Instead, we should be thinking of innovation in terms of how we can create new value for people. Another example is failing to empower employees to make decisions and ensure they’re properly trained. We’ve looked at over 50,000 companies—the top two factors that determine an organization’s long-term success seem to be the number of hours per year of employee training and employees’ level of empowerment. The higher those two numbers are, the better the company does.

What’s an example of an organizational structure that fosters or tolerates nincompoopery?

Having a rigid hierarchy in a modern organization. If you’re trying to kill a company with an organizational structure, I’d recommend putting in rigid command-and-control hierarchy, policies that limit control for employees and useless processes. Studies have shown that in monopolistic industries with little competition, the powers-that-be will install hierarchy in customer service centers because it limits the amount of redress that dissatisfied customers can get. Now that may be a strategy for the short term, but it’s disastrous for the long term.

What’s the most important role for HR in helping to eradicate this?

The most important role HR can and does play at great companies is when they help with the entire talent-management process. We have lots of managers who get promoted under the assumption that because they did their previous job well, then they’ll be good managers. So, a lot of them don’t get the training they need and end up doing things like relying too much on resumes to find talent. When you look at great companies, you’ll find the HR department is there helping managers figure out how to hire people who care about customers, who’re willing to learn, who are willing to be part of a team and then go beyond that and partner with the business. HR should be actively involved in developing employees, not just training them on technical processes.

Another important thing for HR to help with is ensuring employees understand how their particular unit makes money. If we’re going to have decentralized organizations with empowered employees, which is necessary for success, then they need to understand profit margins. They also need training on collaborating with others and on improvement methodologies like Lean and Six Sigma.

The fact is, if you have employees who can only just do the work or make just a few decisions, those are the most expensive employees. The least-expensive ones are those who are always thinking: How can I improve this? How can I make this process better?

Any additional thoughts on how HR can help companies move forward?

HR could really be involved in helping managers and leaders understand what change really looks like. Getting people to embrace change starts with understanding the three things human beings are looking for: security, followed by relationships and then meaning. And for most people, meaning comes from family, friends and faith but a secondary search for meaning comes from work. After all, we spend a lot of time there and we’d prefer it actually mean something rather than hating every day of it. So if you’re proposing change, you have to think about how it may affect those things. But you should probably tackle them in reverse order: Start with meaning, as in ‘Why we’re doing this.’ Next, go to relationships: fear of change is often about fear of what this may do to my relationships and how people see me. Then, you can explain how the change will enhance the organization’s financial security—or at least, we’re not sure if this is going to work but we definitely will fail if we don’t at least try to do this. People will forgive a lot of things when going through change, but one thing they won’t forgive is if you lie to them.