RTM: So could you start to map out what problems people have with different products?

AS: Absolutely. With a large enough sample, you can really calculate what percentage of purchasers will have a problem with a particular aspect of a product.  You can map the faults and then you can design that out.  Often they were very minor things,  We were, for example able to improve the so-called "out of the box" experience. This significantly decreased the number of calls at all levels.

Sometimes solutions were suggested by customers.  And often we found that referring people to very clearly laid out websites with "tips-to-solve-your problem" databases was very popular and reduced people costs significantly, whilst increasing satisfaction. However, access to a live person is still needed for certain situations.

RTM: Did you take these calls yourself?

AS: Sometimes I got the tough ones. And at the end I would suggest that I would drop by to see the customer. They loved this. People would say: "We haven’t had an HP vice president visit us in twenty years." I still get Christmas cards from some of them…I am not kidding!

RTM: What other lessons did you learn?

AS: We learnt that we should empower and trust our own people more, give them the freedom to make fast decisions to satisfy a customer - engineers tend to want to analyze each situation to death before making a decision. However, we are in a different, faster world today.

When we gave our middle managers more leeway to make decisions on the spot, for example to ship a new product or to reimburse a customer or in the case of an enterprise customer to provide a free service, this led not only to dramatically improved customer satisfaction, but also to more motivated employees.  And….. if you want to have happy customers you need to have happy employees!!!

But I guess the real battle was internal. We really tried hard to get divisional and group managers to understand that they needed to construct real-time information backbones to listen to customers and to use that information to build better products.

RTM: Alex, you have been around a long time in channels. Have things become much more sophisticated? I ask because I still hear all the time about how sales people try and stuff channels at the end of a quarter.  It still seems to be endemic, at least in the IT and telecoms industries. And that means that all the best practice stuff just goes out of the window at the end of the quarter.

AS: You are right. At the end of the quarter everything still changes. It is endemic and systemic. Savvy customers know that at the end of the quarter they can get an extra couple of percentage points off almost any big order.  Even your own salespeople will save up orders to the end of the quarter when they know that the pressure will really be on and there will be extra rewards for them.

At HP we battled with this for decades. And I still don’t think there is an answer to it. The only answer is perhaps that we built a base business which is less influenced by the cycles. For example, consumer purchases or an annuity revenue stream from maintenance, so that you are less vulnerable to the quarterly peaks and pressures. This is easier said than done! But companies who are fortunate to have such a base are typically less affected by the "end-of-quarter syndrome".