MCBASSI & COMPANY

The importance of reciprocity

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As my co-authors and I continue our research for our book Good Company, we have come to realize that reciprocity – the art of seeking win-win transactions with customers and employees – is a core attribute of a good company.   

Think, for example, about the difference between Southwest and United Airlines.  The organizations’ commitment to reciprocity—or the lack thereof—shows up in both employee and customer relations.  Southwest is at the very top of Glassdoor.com’s employee ratings, whereas United is close to the bottom.   In the crisis that followed September 11, 2001, the major airlines laid off 16 percent of their workforces.  Southwest, however, was able to avoid layoffs altogether (see Jody Hoffer Gittell’s book about Southwest for more discussion).  And although Southwest is among the most unionized of airlines, management consistently has a constructive and respectful relationship with labor. 

 Southwest’s focus on reciprocity permeates all of its relationships.  And not coincidentally, in the latest rankings, Southwest had the top customer satisfaction ratings in the airline industry (for the 17th straight year!), while United had the worst.

And there are plenty of ready examples that help demonstrate why.  Need to cancel reservation on a Southwest flight?  No problem.  You can quickly go online, easily cancel the ticket and your full refund goes into an account that you can instantly access for your next ticket on Southwest.  But if you need to cancel your reservation with United, you typically have to call them (unless you have purchased an expensive “refundable” ticket), wait for a customer service representative (waits of over 30 minutes are not uncommon in bad weather), and pay a cancellation fee of up to $150.

 United charges you this fee because they can—they’ve got your money and they don’t have to give it back to you.  Southwest chooses not to do so—even though they could—because they are committed to reciprocity. 

Reciprocity plays itself out in ways large and small in the companies that you deal with every day.   It is the give and take between human beings that makes life better, but that is all too often lost because of “corporate policy” (as in when the customer service representative tells you that they cannot do what you are requesting because “corporate policy” does not allow it). 

Good companies, like Southwest Airlines, realize that they need to build reciprocity into their day-to-day operations.  So they choose instead to base their “corporate policy” on the principle of reciprocity.

Six Attributes of Companies Worthy of Your Business

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In our ongoing research for the book we are working on (Good Company) we have done extensive interviews with executives as well as front-line employees.  In these interviews we have been seeking to understand how the convergence of “meta-forces” (globalization, technology, demographic change, political and regulatory change, and environmental change) is shaping the future of business.  No small undertaking.

This process has led us to the identification of six key attributes that organizations must develop in themselves (and their leaders) to thrive in the future.  Companies that exhibit these attributes are also the types of companies with which we’d want to do business ourselves.

  1. Reciprocity—a mindset of seeking mutual benefit (rather than exploitation)  
  2. Connectivity—using the fundamental need and emergent power of human beings to be connected, informed, and effective through new forms of electronic sharing and collaboration 
  3. Transparency— a  willingness to expose the reasoning behind decisions with stakeholders (essential to rebuilding trust) 
  4. Balance— the wisdom to make judgment calls amid competing priorities, such as short-term versus long-term goals and the desire for transparency versus a legitimate need for secrecy (e.g.,  mergers or new products)  
  5. Courage doing what is right despite possible adverse consequences in the short-run
  6. A Purpose for Being—Henry Ford’s words of long ago are more true today than ever: “A business that makes nothing but money is a poor kind of business.”