According to author and media expert Michael Levine, the biggest problems in business stem from ignoring the smallest of details. In his new book, Broken Windows, Broken Business, Levine applies the approach of a social psychologist and criminologist to business.
Using the theory that if broken windows in a building go unfixed, the other ones will soon break -- and the neighborhood will deteriorate -- Levine asserts that in order to succeed, business owners must monitor the tiny details or risk failure.
BusinessWeek Online reporter Stacy Perman recently spoke with Levine about the importance of appearance and why "big equals stupid" in business. Edited excerpts of their conversation follow.
You say constant attention to detail demonstrates corporate competence, but it also shows that a company cares about its customers' needs. How so?
It's my belief that customers can get a strong indication about how a company does business and how it will attend to big concerns by how it attends to little ones.
If you buy a car from a dealership that doesn't have service hours on nights or weekends, that's a strong indicator that the dealership is not obsessed with customer service, but rather with creating a schedule for its needs. Or think about when you go into a restaurant's bathroom, and it's dirty. There's a good indicator the kitchen is not as clean as you might like.
Is this more of a perception thing or an actuality?
It's both. It sends a very strong perception signal, but in reality, there's an enormous correlation between attention to details and big concerns.
How does such vigilance make or break a business?
The consumer mind has a logical and emotional part to it, and if you don't speak to both, you will lose them, especially when they're hungry, tired, angry, or lonely.
We're living in an age of anxiety. People have less leisure time. When they're not hungry, tired, angry, or lonely, the emotional side will win the debate with the logical part of the brain 80% of the time. When they're hungry, tired, angry, or lonely, emotion wins 100% of time. We are often hungry, tired, angry, or lonely, so it's exceedingly dangerous if you're a business to ignore the emotional part of the brain.
What's an example of when details were ignored and it hurts business?
One of the most pungent examples in everyday American life is McDonald's (MCD). It was founded in the 1950s, and Ray Kroc was obsessed with cleanliness, [and] fast and quick [service].
The last time I walked into a McDonald's, it didn't feel like the TV commercials. I went into one near Beverly Hills on a Saturday, and I asked for more ice in my drink. The woman behind the counter didn't know what ice was because she didn't speak English.
I went home and saw on TV that McDonald's was giving money to the Special Olympics. But if it can't get ice for my drink, I don't care if they're good corporate citizens. They're not taking care of the details. Ray Kroc, if he were resurrected, would die a second time.
This inattention to details has hurt them terribly. Sales are radically down. McDonald's is in real trouble for lots of reasons -- for instance, the trend in healthier eating -- but one component that has ceased is that they're not creating an emotional relationship with customers.
Where are the details making a positive difference
Nordstrom (JWN) militantly refuses to bow to a Department of Motor Vehicles mentality. Starbucks (SBUX) has done a good job at creating an experience. Wal-Mart (WMT) has done a good job to a degree in installing greeters.
But the truth is that the bad examples dwarf the good. Major corporations in America don't get it. They think all they have to do is market a product.
What good companies do is pay attention to the little things in a way that responds to the emotional needs of customers. The little things matter a lot. It's the broken window, stupid. It's the little stuff that kills you. Cheat on the little stuff, and you start the path to your own suicide.
How is this applicable to small businesses?
Big equals stupid. The larger you get, the stupider the culture becomes. The owners of Staples (SPLS) or Office Depot (ODP) couldn't care less if you wait two minutes or two hours to find toner or a cartridge. That's perfectly fine as long as there's no competition.
To the extent that a small business yearns to be bigger -- say, if you own one restaurant in Boston, and your goal is to own 20 -- quality control becomes much more difficult the larger you are. It is involved and time-consuming. One reason people don't want to pay attention to the broken windows is that they're lazy. American business civilization is being challenged through globalization in a way it has never been before.
What advice would you give to small-business owners? What must they keep their eyes on?
Have an obsessive compulsion to detail. If you want to know what it's like for a customer, then you should call your restaurant or whatever type of business and have the experience of being put on hold.
Owners of small businesses should mystery-shop themselves at their businesses and see the brutal facts -- that is, that they are almost always underproducing the experience of what the customer wants. Businesses insult customers every minute of every day.
When a customer does complain, he or she should be rewarded. For instance, if you're a dry cleaner and a customer's pants were supposed to be ready by Tuesday, and they're not, call up and say, "We appreciate you telling us that, we will try better next time, and here is $20 worth of dry cleaning for the trouble you've encountered." The same thing if a customer shows up for a reservation and the table is late -- buy him or her a drink or dessert.
In chronicling the hits and misses of businesses and pointing out these flaws, what have you discovered?
What I've learned about business owners and human beings is that they respect wisdom but obey pain. Business owners will find this all very fascinating and provocative in theory -- until their ass is in a sling. Then it becomes vital.