LITMIR.BIZ

       Introduction

       From Score to System

      It always seemed to me that success in business and in life should result from your impact on the people you touch—whether you have enriched their lives or diminished them. Financial accounting, for all its sophistication and influence, completely ignores this fundamental idea. So several years ago, I created a new way of measuring how well an organization treats the people whose lives it affects—how well it generates relationships worthy of loyalty. I called the metric Net Promoter score, or NPS.¹ Thousands of innovative companies, including Apple, Allianz, American Express, Zappos.com, Intuit, Philips, GE, eBay, Rackspace, Facebook, LEGO, Southwest Airlines, and JetBlue Airways, adopted NPS. Most used it at first to track the loyalty, engagement, and enthusiasm of their customers. They liked the fact that NPS was easy to understand. And they liked it because it focused everyone on one inspirational goal—treating customers so well that those customers become loyal promoters—and led to action in pursuit of that goal. They also appreciated the fact that it was an open-source method, which they could adapt for their own needs.

      Over time, these companies developed and expanded the metric. They used it to help build employee engagement and commitment. They discovered new methods to extend its impact, not just to measure loyalty but to transform their organizations. They shared ideas with one another, and they built upon one another’s applications. In a remarkable explosion of creative intelligence, NPS soon morphed into something much more than a metric. Though the science is still young, it became a management system, an entire way of doing business. The initials themselves, NPS, came to mean Net Promoter system rather than just Net Promoter score.

      And what a difference this system seems to have made. Listen to what some of these companies’ leaders have to say about it:

      NPS has galvanized our thinking and enabled the entire organization to focus on the customer. During the 1970s and ’80s, total quality management revolutionized the cost of quality in manufacturing. NPS is having a comparable impact in the current age.

      —Gerard Kleisterlee, CEO, Philips

      NPS was a natural fit for Apple. It has become part of the DNA of our retail stores.

      —Ron Johnson, SVP and founding executive, Apple Retail

      NPS completely changed our world. It has become an integral part of our process and culture. Now, you couldn’t take it away if you tried.

      —Junien Labrousse, executive vice president and chief product and technology strategist, Logitech

      NPS provides the litmus test for how well we are living up to our core values—it is the first screen I look at when I boot up my computer each morning.

      —Walt Bettinger, CEO, Charles Schwab

      NPS is the most powerful tool we have ever deployed. The reason is that it is so actionable.

      —Dan Henson, then chief marketing officer, General Electric

      We use NPS every day to make sure we’re WOWing our customers and our employees.

      —Tony Hsieh, CEO of Zappos.com, author of Delivering Happiness

      In chapter 6 you’ll read nearly a dozen stories about how companies such as these have put the Net Promoter system to work and about the results they have achieved. NPS was a key part of Charles Schwab’s turnaround, a period in which the company’s stock tripled. It has been a central element of Apple’s famous retail stores, which are believed to have the highest sales per square foot of any retailer anywhere. It has enabled Ascension Health to give its patients better care, Progressive Insurance to gain market share and retain more of its policyholders, American Express to provide better service to cardholders while lowering its costs—and on and on. The Net Promoter system has proved to be a powerful engine of growth and profitability.

      But I don’t want to stop with system, because there is another S that permeates the companies that have achieved the most impressive results with Net Promoter. These companies embody a Net Promoter spirit of leadership, a distinctive philosophy that energizes the system. Leaders who exhibit this spirit believe that the mission of any great organization is to enrich the lives it touches—to build relationships worthy of loyalty. A great organization must have a positive impact on its shareholders, of course, but also on its employees, its business partners, and especially its customers. Unless it earns the loyalty of all these stakeholders, its returns to shareholders will soon evaporate. Moreover, these leaders themselves recognize that their personal reputation, their legacy, will be defined by how well they achieve that mission.

      Phrases such as personal reputation, Net Promoter spirit, and enriching lives might lead you to infer that NPS is soft and nebulous. On the contrary, Net Promoter is where mission meets mathematics. A mission without a measurement, without an accurate gauge of success or failure, is just so much hot air. Only by systematically measuring its effect on people and their relationships can an organization gauge whether it is really achieving its mission and enriching lives. That’s NPS’s reason for being. It provides a practical measurement process that can accurately assess a company’s progress. It provides a management system that can help a company capture the spirit and drive toward greatness.

      This book tells the story of NPS, where it began, how it evolved, and where it is headed. It shows you how you can use the system to improve your business—and your life.

      In the Beginning

      NPS first saw the light of day in Harvard Business Review, in late 2003. That article—“The One Number You Need to Grow”—eventually led to a book titled The Ultimate Question, which appeared

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