A Simple Process To Improve Any Area Of Your Business

Just before my son was born, my wife and I stocked up on IKEA furniture.

I spent an entire weekend constructing bookshelves, toy crates, chairs and dressers.

I hated it.

I complained my way through the work, cursing at every missing screw, jammed wood plug and the thumb cramps from turning 1,000 screws.

When it was over, I glowed with pride not felt since crafting a miniature baseball bat on a lathe in high school woodshop class. I felt a strange kinship to Bob Villa and considered buying some flannel shirts and growing a beard.

I displayed that cheap Swedish furniture throughout our townhome with pride. IKEA was everywhere – kitchen, basement, bedrooms, nursery.

Every time I walked by a chocolate-brown coffee table, I puffed out my chest.

A few years later, we moved into a bigger home and the furniture didn’t match with the home’s new furnishings. At least, that’s what my wife thought.

I started finding items of my beloved IKEA furniture out on the curb on garbage day. I objected every time.

• “Why are we tossing out the miniature kid’s chairs?”
• “That bookshelf still serves a purpose.”
• “I can take that desk to my office.”

Even though I complained when we purchased the furniture, my wife couldn’t convince me to part with it.

What the hell was wrong with me?

The Psychology Behind IKEA’S Success

Michael Norton, a marketing professor at Harvard Business School, conducted a series of experiments to demonstrate the marketing sway of products that require customer assembly.

He was fascinated by the marketing evolution of instant-cake manufacturers in the late 1950s. The initial products were presented as a way to simplify the lives of housewives.

These products were met with a cool response. The first cake sets made cooking too easy, devaluing their customer’s labor and skill.

Widespread adoption of the instant cake mix took off when manufacturers changed the recipe to require adding one egg. Infusing the task with labor, as simple as cracking an egg, drove a surge in sales.

Norton’s experiment involved several groups bidding on IKEA furniture. One group bid on pre-installed furniture while another was asked to construct the furniture first, and then bid on their hand-crafted wares.

The “builders” in this experiment were willing to pay 63% more than the “non-builders.”

This cognitive bias became known as “The IKEA Effect,” in which people place a disproportionately high value on products they partially create.

The same bias applies to engagement in the workplace.

Commitment Versus Compliance

I worked with a manager who led a team of loan processors. Each person on her team managed roughly 60 customers at a time.

One of her processors gave notice and she felt overwhelmed with the responsibility of dividing the departing employee’s work amongst the rest of her team.

The last time this happened, her approach was chopping up the list of customers randomly. She emailed each person on her team and notified them of their new customers.

She gave specific instructions on how to approach each customer, when they should be contacted and the steps they should take in reviewing and updating each customer.

She left no room for individual judgment.

For the next three months, most of these customers went through a tough stretch. They missed settlement dates, were notified of last-minute issues and many became so frustrated that they called the manager.

In each case, the responsible loan processor would lament about how they got the short end of the stick.

• “You gave me all of the angry customers.”
• “I inherited customers on loan programs I am not familiar with.”
• “Every customer I inherited had challenges with credit.”

Now, she was faced with reliving the same three months. Sitting in her office with the door closed, she started to repeat the same broken process. Before she could start sending emails, I asked her if she had thought about giving this assignment to her team.

They knew this processor was leaving and knew what the manager was doing with her office door closed. They were anxious about which customers they would inherit, but more about having no voice in the process.

She called her team into her office and told them about the challenge she was trying to solve. Given that they would be doing most of the heavy lifting, she asked if they had ideas.

• “I know she had a handful of veteran loans. I like working on those deals. Can I take those?”
• “She was serving some customers with my primary salesperson. I can take those customers since I am used to working with him.”
• “I have a light month in March. I can take all of the closings in that month but hope to avoid taking any of the May settlements since that is my biggest month.”

This went on for twenty minutes until all of the customers were assigned. Over the next three months, noise from the transferred customers was minimal. Customers had a much better experience as most were handpicked by those who would be serving them.

When given a chance to build the process, the team was more vested than when they were simply told what to do.

A Simple Exercise To Improve Any Result

Managers are paid to improve things. Feeling pressure to demonstrate a return, many rush out top-down initiatives that prove to be dead on arrival.

Without buy-in, even the most inspirational leader will fail to gain traction on a change effort.

Help your team feel as if they are building the process with a “We Will, If” exercise. All you need is a talented group of people and a whiteboard.

State your goal and give your team the opportunity to surface obstacles.

The goal should be challenging enough to force people to think innovatively. Improving by 5% leads to people offering ideas on the fringes.

State an objective goal and a timeline. Write that “We will, if” statement at the top of the whiteboard and then give markers to your team.

This exercise is akin to allowing your team to build their own IKEA furniture. No one likes to blindly follow directions without the opportunity to offer input. Demonstrate that you value opinions from the front line.

If your company has not done much of this in the past, you may need to nudge your team to get started. As a leader, your role is facilitating and ensuring every opinion is counted for.

Have fun with the exercise. Split the team into groups and have a competition for which group surfaces the most ideas.

Many of the changes will be low-cost if they cost anything at all. It might be killing a meeting or tweaking a process that is hampering creativity. Your team might ask you for more trust by loosening your grip.

Consolidate your team’s list of ideas and sort by cost and return. If the return is worthwhile and the cost is low, implement the change.

This exercise can backfire if you listen for two hours and do nothing. Find opportunities for small, immediate wins that you can approve on the spot or in short order.

Assign teams to ideas that require more thought or resources. Give those small teams approval to work outside of the normal hierarchy to drive those ideas to fruition.

You won’t have to implement every idea. Norton’s experiment found that the IKEA Effect was still prevalent when the “builder” group only partially constructed an item. What matters is engagement.

Managers shouldn’t feel pressure to come up with all the ideas. In fact, great managers do the exact opposite.

Take advantage of the IKEA Effect and offer your team a chance to build a better company. You might be surprised how something so simple can be so powerful.