Broken Windows, Broken Business: How the Smallest Remedies Reap the Biggest Rewardsby Michael Levine
Once every few years a book comes along with an insight so penetrating, so powerful - and so simply, demonstrably true -that it instantly changes the way we think and do business. Such a book is Broken Windows, Broken Business, a breakthrough in management theory that can alter the destiny of countless companies striving to stay ahead of their competition. "In this vital work, author Michael Levine offers compelling evidence that problems in business, large and small, typically stem from inattention to tiny details. Social psychologists and criminologists agree that if a window in a building is broken and left unrepaired, soon thereafter the rest of the windows will be broken - and the perception will build that crime in that neighborhood is out of control. The same principle applies to business." "Drawing on real-world corporate examples, from JetBlue's decision to give fliers what they really want - leather seats, personal televisions, online ticketing - to Google's customer-based strategy for breaking out of the pack of Internet search engines, to business-to-business firms' successes and failures, Levine proves again and again how constant vigilance and an obsession with detail can make or break a business or a brand." "With tips and advice on changing any business to one that dots its i's, crosses its t's, and attracts more clients, Broken Windows, Broken Business goes straight to the heart of what makes all enterprises successful - the little things that mean a lot."--BOOK JACKET.
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Broken Windows Broken BusinessHow the Smallest Remedies Reap the Biggest Rewards
By Michael Levine
Warner BooksCopyright © 2005 Michael Levine
All right reserved.
Chapter OneBroken Windows in Business
The broken windows theory was such a revolutionary, seminal concept in criminal justice that when it was published in 1982, it was considered a complete and total reversal of everything that had come before it. The notion that perception was as important in controlling crime as statistics, that letting "small" crimes slide by was sending a signal not only that the criminals were in charge but that the police were either unwilling or unable to stop them, was laughed at, ridiculed, considered absurd or "radical."
It wasn't until the theory was put into practice in the 1990s on the world's largest stage, in the city of New York, that its seeming simplicity was shown to be genius. Between Mayor Rudolph Giuliani and Police Commissioner William Bratton, the commitment to fixing New York's broken windows-graffiti, fare jumping, squeegee wielding, and the like-might have sounded like an assault on an insignificant annoyance, but it was actually a call to arms, a declaration of war on crime, that proved to be the salvation of a city in crisis. In showing the world that New York City would not tolerate any infraction, Giuliani and Bratton were making thelarger point that serious lawbreakers would be facing much harsher penalties. The good guys would be in charge here.
It is a distinction between "law" and "order," one that is important, because it defines what the broken windows theory means and how it will apply to the business world. To adhere to the law, one simply manages to live without violating the set code. Simple enough. But to maintain order in a city, country, or company, the goal must be to have everyone follow the same rules and to make sure that each rule carries the same weight.
To have a rule that says "Thou shalt not murder" and one that says "Don't cross the street against the light" seems like something approaching a contradiction-it sounds like the two infractions shouldn't even be mentioned in the same sentence. But both are rules, both are laws as set up by society. If it is generally accepted that we can violate one, isn't it logical that we could violate the other without any additional fear of punishment?
Rules don't have to be universal, either; they can vary from neighborhood to neighborhood, as the authors of "Broken Windows" discovered when the Newark, New Jersey, police made sure more officers on foot patrol were dispatched as an experiment in the 1970s. In one neighborhood, the foot-patrol officer, whom Wilson and Kelling called Kelly, was careful to enforce the informal, unwritten rules that were set up in that section of the city:
"Drunks and addicts could sit on the stoops, but could not lie down. People could drink on side streets, but not at the main intersection. Bottles had to be in paper bags. Talking to, bothering, or begging from people waiting at the bus stop was strictly forbidden. If a dispute erupted between a businessman and a customer, the businessman was assumed to be right, especially if the customer was a stranger. If a stranger loitered, Kelly would ask him if he had any means of support and what his business was; if he gave unsatisfactory answers, he was sent on his way. Persons who broke the informal rules, especially those who bothered people waiting at bus stops, were arrested for vagrancy. Noisy teenagers were told to keep quiet."
Wilson and Kelling noted that "these rules were defined and enforced in collaboration with the 'regulars' on the street. Another neighborhood might have different rules, but these, everybody understood, were the rules for this neighborhood."
The rules in and of themselves were not exactly revolutionary, nor were they especially strict. There was not a "no tolerance" policy for addicts or alcoholics-they were simply asked to stay in certain areas and to not do certain things in public places. But the rules, as stated, were expected to be enforced, every one.
The same is true in the larger and more dramatic experiment that took place in New York City. When Giuliani and Bratton chose to crack down on graffiti artists, squeegee men, and fare jumpers (those who leap over turnstiles to gain free access to the subway system), they were making the statement that some things that were tolerated before would no longer be acceptable.
It was a calculated expression of control that was meant to make a statement not only to those who would spray-paint subway cars or jump over turnstiles-it was also meant (and, it could be argued, mostly meant) to be seen by the public.
As Wilson explained to me recently, the police chiefs to whom he and Kelling spoke were actually correct in their expectations that increased foot patrols would not make a difference in the overall crime rate. Where they did have an effect, however-and it was a major one-was on public perception: "on how people felt about their community and their willingness to use it, suggesting that fear of disorder was as important as fear of crime."
Giuliani, speaking to the Conference of Mayors in May 2000, added to that sentiment: "New York City during the 1960s, '70s, '80s and into the early '90s served as a symbol of decline. I keep a national magazine cover describing New York City in 1990 as 'the Rotting Apple,' a city in decline. And at that time, people in the City of New York accepted it. They accepted the idea that this was our lot in life: that we were an old city that had seen our greatest days ... the perception was that things were never going to be as good as they used to be."
Notice that the "perception" of the city's population is what is being mentioned here. The more people saw their city as a place with a glorious past and a mediocre present, the more it became the truth. It wasn't until the little details, the minor infractions, were dealt with that the quality of day-to-day life for citizens of the city showed noticeable improvement, and at that point, real change could be achieved.
Now, how does this apply to business?
The broken windows theory is all about the unmistakable power of perception, about what people see and the conclusions they draw from it. It doesn't claim that cracking down on graffiti will lead to fewer murders; in fact, crime rates overall are not necessarily affected by the theory being put into practice, as Wilson himself acknowledged. What is important is that as the quality of life in these areas improved, even on a scale that might seem insignificant, the population began feeling better about its surroundings, and that led to significant change: People spent more time out of their homes, participating in events and patronizing local businesses.
In business, perception is even more critical. The way a customer (or potential customer) perceives your business is a crucial element in your success or failure. Make one mistake, have one rude employee, let that customer walk away with a negative experience one time, and you are inviting disaster.
I work in the public relations business in Hollywood. I have represented Barbra Streisand, Charlton Heston, Linda Evans, Fleetwood Mac, Vanna White, Demi Moore, Michael J. Fox, Robert Evans, and Michael Jackson, among many others. I understand the power of perception, and believe me, it can be devastatingly powerful-for good or for bad.
Perception is also something that happens in the blink of an eye. There is nothing more fleeting than a first impression; it is made in a heartbeat. But a perception can be made at any time, even after you have been acquainted with a person or company for years. And opinions turn on such perceptions.
For example, let's say you have bought your coffee at the same store every day for the past five years on your way to work in the morning. You've gone there unfailingly, sometimes added a bagel or muffin, and occasionally stopped in at lunchtime. The counter staff knows your name, knows your usual order, and can anticipate your preferences.
But one day, even without thinking about it, you happen to notice as you stand in line waiting to order that the walls haven't been painted in years. There are slight cracks and chips in the paint just behind the counter help. It's never occurred to you before, but that small perception makes a difference.
Maybe you start to wonder if those paint chips aren't falling into the coffee or onto a surface where rolls and bagels are cut and prepared for sale. Perhaps the fact that you noticed the paint job makes you realize just how long you've been waiting on line every morning. It's just possible that you consider which other aspects of the store's physical plant-including its cleanliness-might be in disrepair. You might end up by wondering exactly why you've been frequenting this particular business all along.
That one little perception can pack an extraordinary wallop, can't it?
Now, nothing assumed in this scenario is necessarily true: There's no reason to think the coffee outlet's cleanliness, commitment to service, sanitary conditions, or food preparation are at all in question. But you perceived one flaw, and from that allowed your mind to wander into territories it might not have ventured without some direction.
It's not a place the owner would want his customers to go. And if he takes care of broken windows like the paint job, he can avoid such mental journeys. It's better to create a positive perception, of course, but avoiding the negative ones is far and away the most critical thing one can do to attract and keep customers. There is no alternative for an unbroken window, other than one that is under repair.
Let this book be your manifesto, your obsession, your bible of perception. From this moment on, consider how everything seems to your customers, your employees, the public in general. Yes, you have to care about what really is, but you also have to concern yourself with the way things appear to be.
It doesn't matter if you tell a suspicious customer about your scrupulous cleaning techniques, your patented methods for keeping the food away from anything that might fall on it, or your plan to speed up counter lines. Mostly, it doesn't matter because the customer isn't ever going to tell you about her concerns; she's just not coming back to your store again. Generally speaking, consumers will not voice their complaints. (I know, you've heard plenty of bitching and will argue with me, but the truth is that the vast majority of those who find something wrong will not communicate that perception to you-ey'll just stop being a customer.)
The thing about a broken window is that it's not always obvious. The owner of the coffee outlet in this scenario isn't necessarily someone who doesn't care about his business or is given to outrageously lax upkeep. This is someone who either didn't notice that his paint job was starting to erode or felt that by waiting another year to paint he could save some operating capital, and besides, sales were consistent and the customers hadn't complained. There are other, squeakier wheels to grease.
Unfortunately, that is the attitude that can sound a death knell for a business, but on a frequency the human ear can't detect. Let things slip, let the clientele notice things you haven't, and you might as well throw a Molotov cocktail into your store and start from scratch: Your business is on its way out. Constant vigilance, an absolute obsession with detail, is essential to running a business today, particularly one that deals directly with the public (although we will be considering business-to-business broken windows as well).
If you're not obsessed with the details of your business, you can believe me, there will be someone who is obsessed with his, and he will see to it that he overruns your customer rolls and decimates the loyalty you've built up with your regular clientele. Show the slightest chink in the armor you've built up, and an exposed weakness will become the most obvious flaw you can imagine. Your business, to put it simply, will not survive too many broken windows. And "too many" is "one."
Consider the case of Martha Stewart. Was Ms. Stewart convicted of insider trading? Fraud? Tampering with a public trust? No. She was convicted of wrongdoings involved with covering up whatever alleged improprieties had gone on. Why was she trying to cover up? Because she was concerned about the perception that her business was unscrupulous and that she, personally, was not trustworthy. Obsession with detail? Perhaps, but far too late. You can't fix a broken window by throwing rocks through all the others.
Many a politician has been brought down not by accusers who had solid evidence that the official had done something illegal or unscrupulous, but by the effort to suppress the perception that might have come from the allegation itself. History is littered with the carcasses of officials who were discarded after trying to cover up something that might not have been as serious a scandal had it been dealt with quickly and efficiently-d publicly.
A broken window, make no mistake, is best repaired before it breaks. The most desirable scenario is to fix the problem before it is visible, and never to have to consider perception, because there will be nothing to perceive. But if a flaw arises, the only course of action-the only course-is to deal with it immediately, to do so without trying to put a cosmetic sheen on it, and to make sure it is, without question, repaired. A piece of masking tape on a cracked window might prevent it from breaking, but it will be visible for all to see and will have the same perceived effect as a broken window itself. Repairs must be complete and immediate.
But what constitutes a broken window in business? It's easy to spot the physical ones, like the peeling paint on a wall, but what about the less obvious problems? What about employees who don't follow the company's stated policies and present a flawed, incorrect picture to the consuming public? How can you deal with a broken window when you're in corporate headquarters and there are thirty thousand outlets to oversee?
Well, consider the case of the world's largest restaurant chain. Its broken windows have come very close to bringing down the house. The last chapter in this story has yet to be written, but the fact that it was ever in question is a testament to the power of broken windows and how far the mighty can fall. Indeed, consider the case of McDonald's, which once was considered (and considered itself) invincible, and see what broken windows can do, even to a giant.
PERCEPTION VS. REALITY
* It is your customer's perception of your business that will dictate his or her level of loyalty to your business. Make one mistake, and you can damage that perception.
* Little things mean a lot. If you notice that the carpet on the floor at your dentist's office is a little worn, you might find yourself wondering whether the dental instruments have been replaced recently.
* Broken windows are best repaired before they break.
* It's the cover-up that gets you-don't make excuses for broken windows or deny that they're broken. Take your hit, own up to the problem, and fix it.
* Obsession to detail is essential. There is no substitute.
Excerpted from Broken Windows Broken Business by Michael Levine Copyright ©2005 by Michael Levine. Excerpted by permission.
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author, The 7 Habits of Highly Effective People and The 8th Habit: From Effectiveness to Greatness
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This book is about the small yet impactful things every business should pay attention to to avoid slow failure. It covers management areas like brand, product management and customer loyalty, but superior customer service is at the base of all the recommendations. Excellent ideas for increasing customer loyalty in multiple areas across a business from the counter person in a coffee shop to the CEO and executive team. Every time you pick it up you'll find a new idea to fit your current business challenge or priority. Don't underestimate the importance of the subtle recommendations and you'll find you pick this book up more than once as you think about your business.
Broken Windows Broken Business is a book that is one of it¿s kind a written version of the proper etiquette each and every business and person needs in order to be successful financially, emotionally, and spiritually. As the theory states, a broken window is merely the beginning to a broken business. How there is a particular way to treat and organize each and every problem which exists.
A simple idea can go a long way, but this is a little bit of a stretch. The simple idea here is that small things matter. That's the concept behind repairing the 'broken windows' in blighted neighborhoods. Conceptually, when criminals see a neglected building with busted windows, it signals them that here is a place where more serious crimes will be tolerated. The insight is clear: pay attention to details and fix flaws quickly. When this idea is applied to commerce, most businesspeople can catch on quickly, particularly given a few good case histories. Author Michael Levine deserves credit for squeezing the last drop of juice out of this ripe fruit, although impatient readers may lack tolerance for his repetitious counsel. Unfortunately, some examples seem oversimplified, such as ascribing Kmart's decline to bad customer service. Certainly, the overall advice is valid. Business owners must keep their physical plants attractive and train their employees well so their companies can thrive. We recommend sharing this book with a new employee or a beginner at customer service. Shore up that potential broken window before it ever starts to crack.