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Podcast

Dubious Management Fad? No, but There’s Room for Improvement

Maurice FitzGerald, HP Software’s former VP of customer experience, discusses a trenchant piece of reporting in the Wall Street Journal highlighting misuses of the Net Promoter Score.

  • May 23, 2019

Podcast

Dubious Management Fad? No, but There’s Room for Improvement

Recently, the Wall Street Journal ran an article under a catchy headline, “The Dubious Management Fad Sweeping Corporate America.” The dubious management fad, according to the article, is the Net Promoter Score.

Of course, the headline seemed extreme and unsupported to me. It also bothered my podcast guest, Maurice FitzGerald. He is the former vice president of customer experience at HP Software and author of four books on customer-centric strategy. A Wall Street Journal reporter had contacted both of us to ask for background and quotes. We tried to help the journalist get a handle on good NPS practice, as well as the bad. When we saw the article’s headline, we vented, but not in the way you might expect.

Once we read past the attention-grabbing headline, we agreed with much of what the article had to say. It provided a sober summary of many ways a company can misinterpret or misuse the Net Promoter Score. In fact, I’d encourage NPS practitioners to ignore the headline and read the article with an eye toward the things you shouldn’t do with the score.

While NPS has gained tremendous popularity, many companies have cut corners or failed to invest in understanding the benefits of a comprehensive Net Promoter System. If Maurice and I sound a little frustrated, it's because each of us has devoted a lot of our careers to uprooting the very mistakes outlined in the WSJ article. In this episode of the Net Promoter System Podcast, we use the article as a jumping-off point for a deeper conversation about the errors we wish practitioners of the Net Promoter System would avoid, once and for all.

You can listen to my conversation with Maurice on iTunes, Stitcher or your podcast provider of choice, or through the audio player below.

In the following excerpt, Maurice and I discuss our initial reactions to the Wall Street Journal piece, beyond the headline.

Rob Markey: This week an article was published in the Wall Street Journal that I think is long overdue. I don't like the headline of the article, but I think the point it was making is something that you and I have made many times.

Maurice FitzGerald: Yep. The headline was pretty negative, but I found the article reasonably positive about NPS overall. I think [the reporters] made some really good points that haven't received enough attention. I'm thinking of the way NPS is mentioned more and more often in companies’ annual reports. [They] did also fall into a typical journalist trap of what I call false balance, meaning an understandable desire to perhaps try to create controversy and give time to people whose views can't really be substantiated. But, hey, what did you think?

Rob Markey: I think that it was, overall, a generally responsible piece of reporting. The article also does a really good job of shining a light on some of the dark side of misuse of the Net Promoter Score. A good example that you brought up is companies mentioning their Net Promoter Score in their annual reports.

I thought that the article was outstanding in doing this analysis of mentions of Net Promoter—and one of the statistics was the 150 times companies mentioned Net Promoter Score [in earnings calls], among just the S&P 500 companies last year. In fact, the analysis excluded the Q&A section of those analyst presentations, so I think the number would be higher. And then [the article] showed different companies and the growth in mentions of Net Promoter. That was really good.

But it was also good to call out the fact that the scores people talk about are kind of unreliable. Most of the time, companies do not disclose the basis on which they calculated their Net Promoter Score, and they don't disclose whether it's a touchpoint, relationship or competitive benchmark score.

Maurice FitzGerald: Yes, [the reporter] discussed that with me when she interviewed me for the article. I'm sure she did the same with you. [We talked about] these kinds of unattributed scores. The desire, I guess, to simplify communication at the risk of it being excessively simple.

Rob Markey: Yeah, and I think when you're writing an article in a general interest newspaper or business newspaper, the subtlety of three different types of Net Promoter Scores is probably hard to get across in the words that they have in the space, so I'll give them the benefit of the doubt on that one. But it did sort of indict all Net Promoter Score reporting on the basis of the fact that a number of companies really do—I hesitate to say "irresponsible"—but, you know, maybe a “not-so-great” job of defining what score they're talking about.

Net Promoter System®, Net Promoter Score®, Net Promoter® and NPS® are registered trademarks of Bain & Company, Inc., Fred Reichheld, and Satmetrix Systems, Inc.

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