Leaders who literally get out and smell the coffee will gather the kind of intelligence about their product and market that they – or the best market research – could never gather. What can a leader learn by observing customers? This author states that by getting out there leaders will find the problem before it finds them.

Leaders at all levels strive to be effective problem-solvers. However, to solve a problem, one must first identify it. In many instances leaders do not spot a threat until it’s far too late. At that point, any decision-making prowess does not help the leader; a serious failure may already have occurred. Many leaders tell their people that they hate surprises. They encourage them to tell them the bad news, rather than providing only a rosy picture of the business. They hold town meetings with their employees, listen to numerous presentations from their subordinates, and remind everyone that their door is always open. Still, problems often remain undiscovered in organizations for many reasons. Unlike cream, bad news does not tend to rise to the top.

Leaders must hone their skills as problem-finders, not just problem-solvers. In so doing, they can identify and preempt the threats that could mean disaster for their organizations. Keep in mind that organizational breakdowns and collapses do not just occur in a flash; they evolve over time. They begin with a series of small problems, a chain of errors that often stretches back many months or even years. As time passes, the small problems balloon into larger ones. Mistakes tend to compound over time; one small error triggers another. Once set in motion, the chain of events can be stopped. However, the longer the wait, , the more that momentum builds, and once-seemingly minor issues spiral out of control. Therefore, leaders cannot wait for problems to come to them. As General Colin Powell once said, “Bad news isn’t wine. It doesn’t improve with age.” As this article will explain, leaders need to become problem finders.

The leader as observer

How can leaders become effective problemfinders? For starters, they can become more like anthropologists. What do anthropologists do? They do not just ask questions, review data, or read the reports of others. They do not spend the bulk of their time closeted in their academic offices. They venture into the field and observe for themselves. Anthropologists study groups, organizations, and cultures through close observation of people in their natural environment. They call this ethnographic research.

In her famous work, Coming of Age in Samoa, Margaret Mead wrote about the lives of adolescent girls and their transition to adulthood. She immersed herself in Samoan society for five months back in the 1920s, and based on her observations, she wrote a groundbreaking book about how culture impacts the socio-emotional development of young people. She could not have made her discoveries from the comfort of her office.

If leaders wish to discover the problems that could mushroom into large-scale failures in their organizations, they too must venture out of their offices. They must immerse themselves occasionally in the everyday contexts in which work is being done, and in which consumers buy and use their products and services. They need to hone their skills of observation. Leaders must also recognize that they typically review information that has been filtered by others at various levels of the organizations. Those filters often shield leaders from bad news that they ought to hear. At times, leaders must do away with the filters. They need to see actions, behaviors, and processes for themselves.

Marketers as anthropologists

Marketing professionals have discovered the power of an anthropological approach. In the past, companies relied heavily on focus groups to conduct marketing research. They brought consumers to their offices and asked them for extensive feedback on new products and services before going to market. Today, many firms have shifted their approach, relying less on focus groups and much more on direct observation of how consumers behave in their natural environments – in their homes, workplaces, automobiles, and the like. For example, consider Kimberly Clark, the producer of the Huggies brand of diapers and related baby care products. The firm’s researchers have learned a great deal by watching many parents changing their babies. During one study, they realized that most moms and dads struggled to hold their babies still while reaching for the diapers, wipes, articles of clothing, and the like. The problem became particularly acute for parents who were “on the go,” i.e. changing their infants at a location outside the home. Therefore, the firm redesigned its travel pack for Huggies Baby Wipes. The new packaging enables parents to remove a wipe with one hand, thus enabling the moms and dads to always keep their other hand on the child. Similarly, the company’s researchers watched as parents had difficulty opening Huggies Baby Wash while bathing their children. Again, the moms and dads had only one hand free, as the other hand tried to prevent the infant from falling over in the bathtub. The firm redesigned the bottle so that a parent could open it and dispense the liquid with only one hand.

Proctor and Gamble has developed one of the most extensive observational research programs in the world. The firm’s CEO, A.G. Lafley, learned the value of watching how consumers behave, rather than simply asking them what they want, when he accepted an assignment in Japan in the early 1990s. At the time, he did not have access to extensive market research data in Japan. He had to find another way to learn what product innovations would meet consumers’ needs. Lafley explained, “Executives in the U.S. were buried under consumer research data. I don’t think the answers are just in the numbers. You have to get out and look.”i

Today, Proctor and Gamble’s employees immerse themselves in their customers’ lives through two innovative programs. In the firm’s Livin’ It initiative, employees visit people in their homes and join them on trips to the supermarket. In the Workin’ It program, employees spend time behind the check-out counters at various retail stores. As Lafley puts it, “Richer, more actionable insights are identified from what is learned in the context of the real world.”ii

Proctor and Gamble does not simply leave this observational work to its research professionals in the marketing department. The firm’s executives have become anthropologists too. Senior leaders, including Lafley, leave their offices and go out into the field regularly, so that they can see the problems and product flaws that must be addressed to satisfy customer needs. Firsthand observation of people in their natural context has become a critical problem-finding tool at P&G. By being proactive in discovering problems and needs, the firm has driven product improvements and innovations that have led to robust revenue growth throughout this decade.

Why must we observe?

Why have marketers adopted the methodology of Margaret Mead and her fellow anthropologists? Pure and simple, they understand that people often say one thing and do another. Asking individuals questions in focus groups and surveys may yield answers that are not consistent with the way those consumers actually behave in their homes or at retail stores. Moreover, responses may become distorted because market researchers ask leading questions, or simply hear what they want to hear.

How does this transformation in the marketing field inform our understanding of how leaders can become more effective problem finders? Asking your employees questions, holding town meetings, talking to customers and suppliers – all these activities certainly provide senior leaders with useful information at times. You may discover key problems and identify competitive threats through these discussions. Courageous subordinates may bring forward some bad news, or blow the whistle on activities that could compromise the firm’s reputation and image. However, leaders must proceed with caution. People will say one thing, yet do another, without intending to deceive. Worse yet, the gap between talk and behavior typically widens when individuals come together in group discussions. The presence and influence of others around us causes us to describe our behavior more inaccurately than we normally do.

Firsthand observation may yield very different insights about the activities and behaviors of employees, customers, suppliers, competitors, and strategic partners. Simply talking with others – and not observing them — may cause leaders to proceed down the wrong path. You may hear about problems which in fact do not pose much of a threat at all. Meanwhile, you may not hear about problems that could be very meaningful the organization. Watching how the organization actually functions can be a powerful and illuminating learning experience – and a far more accurate one. Firsthand observation – a simple version of the approach embraced by anthropologists – must become part of every leader’s toolkit. To serve as effective problem-finders, we need to “Get out and look,” as A.G. Lafley has noted.

Honing your powers of observation

Effective leaders do not simply “manage by walking around.” They become careful and systematic observers of people, processes, and facilities. They do not jump to conclusions based on anecdotes or isolated experiences. They become engaged with people on the front lines of organizations. Observing customers directly, they see why people like or dislike their firms’ products and services. They occasionally get their hands dirty doing some of the real work that must be done to serve customers. Working alongside their employees, they see how things actually get done.

Take David Neeleman, the founder of JetBlue, for example. Neeleman launched a successful new airline in an era when most airlines have suffered financial ruin. More recently, he’s moved on to launch an airline startup in Brazil. JetBlue not only generated profits in most years of his tenure as CEO, but it also scored very highly on the airline quality ranking (AQR) – a scoring system that measures everything from on-time arrivals to the resolution of mishandled baggage and customer complaints.

How did Neeleman create such a customer-friendly airline? How did he deliver on his promise of exceptional service? One reason may be that he chose to work alongside his front-line employees and interact directly with his customers on a regular basis. He never allowed himself to become too far removed from the basic process of helping customers enjoy their flights. How did he do it? While on board one of his planes, Neeleman would introduce himself to the passengers over the intercom system. Then, he would join his flight attendants in providing drink and snack service, in what one journalist described as his “snack and schmooze drill.” Neeleman actually donned an apron with his nickname – “Snack Boy” – as he worked the aisles.iii Neeleman not only had an opportunity to listen to and observe customers on these occasions, but he also interacted closely with his pilots and flight attendants. He could see them in action and speak with them very informally. One crew member explained, “Seeing David is great. He’s so easygoing, and we get to talk.”iv

How do leaders become astute observers when they venture out of their offices? For starters, you might adhere to some of the very same principles and techniques used by expert anthropologists (summarized in Table 1). First, make a firm decision about whether you intend to become a participant-observer. Do you intend to work the aisles, like Neeleman, or will you sit back and watch from your seat? In some cases, you will want to become active and walk the aisles. . At other times, it may be more helpful to be unobtrusive, perhaps even trying to avoid being noticed.

Disavow yourself of any preconceived notions about your organization or its employees, customers, or competitors. You have to try to wipe the slate clean, no matter how hard that may be. Be careful about even having a precise view of what you are setting out to learn. As Siamack Salari, a marketing research expert, points out, “Ethnographic research is always agenda-less. It’s totally opposed to other forms of research and its big benefit is that it generates insights. It uncovers things you didn’t know you didn’t know about.”v

Practice a technique that researchers call triangulation. Collect multiple observations from different vantage points. Do not rely simply on what you see; collect artifacts from your visits – whether that be a flyer from the factory bulletin board, one of your competitor’s brochures, or a sign that a local manager created to welcome new shoppers to your stores. Consider bringing along your digital camera or taking a few photos with your cell phone if you see something interesting. You may never be able to capture a thought in writing as well as you can in a photograph.

Seek out informants wisely. You will often, but not always, do more than observe as you venture into the field; you will speak with a variety of people, often rather informally. Search for the individuals who are most willing to open up to you, to be candid. In many cases, certain people have developed a reputation inside the firm for being straight shooters. Seek them out. Recognize, though, that each person will have their own vantage point and a limited perspective. Thus, do not rely on a few voices. Speak to people in their own language, i.e. recognize that the way in which you talk with your engineers should be quite different than the conversation that you may have with your sales people. Try to learn the terminology of a local unit, and then speak with them using that vocabulary.

As you speak with individuals, employ open-ended inquiries and try to avoid leading questions. Engage in active listening by periodically playing back what you are hearing, and asking for validation and clarification of your interpretations. Finally, as you take notes, try to record key quotes from your conversations. Keeping track of what you have heard in your employees’ and customers’ own words can be very powerful. Sharing those direct quotes with other executives has the power to persuade.

Throughout these conversations, remember to spend much more time listening than talking. The more air time that you consume, the less opportunity others have to inform you. Speaking precludes learning at times. As one researcher at Ogilvy and Mather, the renowned advertising agency, noted after a trip to study women in Thai villages using shampoo: “I learned that if you really want to know what’s going on around you, you just have to shut up and listen.”vi

Finally, keep track of what you are observing. Take careful notes, and be careful to distinguish between fact and interpretation. You should jot down your impressions about various situations, but be sure to distinguish those subjective judgments from the factual evidence. Seek out and systematically track the things that surprise or confuse you. As organizational learning expert David Garvin argues, the best observers seek out “anomalies, exceptions, and contradictory evidence.” He points out that Charles Darwin “went so far as to keep a separate record of all observations that contradicted his theory.”vii

When you have finished observing and taking notes, , find some time to synthesize what you have learned. If you have partnered with another observer, then spend time comparing notes. Explore the differences in your observations and interpretations, and inquire as to why you viewed the same situations quite differently. Finally, develop a concrete list of the problems that you spotted and the opportunities for improvement. Then, bounce these ideas off others who were not observers, , to see how they react to what you have learned. Ask them what else they would like to know, and consider what new information gathering you would like to conduct before moving forward.

A Few Words of Caution

Tom Stemberg, the founder of Staples, believes fervently in the power of firsthand observation and direct experiences.viii When he served as Staples CEO, each new employee, regardless of their position in the organizational hierarchy, spent their first few days at the company working in a retail store. They would stock shelves, operate a cash register, unload incoming shipments, and assist shoppers. Even the most senior hires took part in these activities in their first few weeks at the company. Stemberg too spent a great deal of time in the chain’s stores, and he shopped his competitors’ locations on a regular basis. Beyond that, Stemberg took time to observe retailers that did not compete with Staples, including firms from industries other than retailing. Stemberg points out one key problem with these visits, though. When people learned that he was coming, they would alter their behavior. Ethnographers fret over the same problem when they conduct their research. They recognize that their mere presence may affect and distort the subjects’ behavior.

The observer’s influence on others’ behavior constitutes a thorny challenge, particularly for a senior executive. People certainly do not act the same way when the boss enters the room. How can leaders deal with this challenge? First, the leader does not have to reveal their identity when interacting with certain constituents, such as customers. Individuals should not lie, but they could simply state that they work for the company, without making a big deal that they actually are one of the top executives at the firm.

Second, leaders may use others who are less well known throughout the organization to conduct similar observations, and then spend time comparing notes. This method may be particularly useful when observing internal company operations. The second set of eyes may provide some illuminating insights, if indeed the senior leader’s presence distorted others’ behavior.

Third, leaders can actually take part in the work on the front lines, as Neeleman did at JetBlue. By becoming a participant-observer, Neeleman experienced key activities and interactions for himself. He did not rely strictly on the observation of others. Neeleman made the practice of donning the apron a rather commonplace one; when such activity becomes routine, the likelihood of distorted behavior declines. He built a rapport with the crewmembers on the company’s planes as he worked the aisles, so that over time, they came to trust him and become more open with him about problems that needed to be addressed.

Lastly, leaders can compare the conclusions from their observations against other, previously collected data. For instance, did a store visit yield an experience consistent with customer satisfaction surveys for that location? If inconsistencies emerge from that comparison, then leaders can sit down with employees to discuss the discrepancies.

We close with one final word of caution about moving into the field to observe customers. Our minds can play tricks on us. Our existing mental models may prove so strong that we cannot acknowledge or accept the validity of observations others have gathered from a different perspective. We can convince ourselves that we do not have anything to learn from others. Put simply, one can only spot problems through observation if you begin by acknowledging that problems always exist, even at the best-run companies. One can always improve. Without that mindset, all the effort of firsthand observation may be futile.

  1. Kroll, L. “A fresh face.” Forbes. July 8, 2002.
  2. Lafley, A.G. and R. Charan. (2008). The Game-Changer: How you can drive revenue and profit growth with innovation. New York: Crown Business. p. 49. The authors do a very nice job of describing how Proctor and Gamble jumpstarted innovation and organic revenue growth during Lafley’s tenure. Lafley describes many of the key initiatives including Workin’ It and Livin’ It.
  3. Peterson, B. (2004). Blue streak: Inside JetBlue, the upstart that rocked an industry. New York: Penguin Books.
  4. Newman, R. (2004). “Preaching JetBlue: How David Neeleman is spreading the gospel of service at the fast-growing airline.” The Chief Executive. October issue.
  5. Hoare, S. “Big brands turning to Big Brother.” The Daily Telegraph. March 29, 2007.
  6. Tischler, L. (2007). “Every move you make.” Fast Company.
  7. Garvin, D. (2000). Learning in action: A guide to putting the learning organization to work. Boston: Harvard Business School Press. pp. 79-80.
  8. This section draws upon an article in Inc. magazine. See Gruner, S. (1998). “Spies like us.” Inc. Magazine. August issue. It also draws on my personal experience working at Staples from 1994-1996, when Tom Stemberg served as CEO.