Why managing expectations is important in business

Posted in Business and entrepreneurship.

Expectations are mental models of how we expect situations to work out. They serve as baselines for what we will be pleased with. Anything less than what we expect is usually a disappointment. We generally want things to work as we intend or as we suppose it would. Expectations influence behaviour and feelings involving specific situations.

In business, it is important to manage these expectations. In order for things to run smoothly, employees should know what they are expected to achieve and what they can expect if they do or do not meet expectations. Happy customers are generally those whose expectations have either been met or exceeded.

Expectations within a business

Clearly setting expectations is important for making sure that everybody understands what they need to do. Oftentimes, when employers lack communication with their employees, they can leave some expectations being unclear. What one may have seen as an obvious implication, the other might not have thought about it in the slightest.

When employees have trouble understanding where their priorities should lie, they may focus on the wrong tasks and end up disappointing superiors. When relaying tasks, information about which tasks are more important leads to better outcomes. Mind you, detailing every single aspect of a task is mostly unnecessary. What is important is information regarding how and when those tasks are expected to be completed.

People conform to expectations. If a workplace has certain expectations put in place, employees are likely to modify their behaviour to align with those expectations. If you want workplace culture to conform to your standards, let it be clearly known how you expect employees to act. Furthermore, let it be known what employees can expect if they deviate extremely from expectations.

While an employer has expectations of an employee, the reverse is quite true as well. Of course, salaries and wages being paid are expected, but usually those are clearly stated in writing. However, you can expect a pretty upset employee if they are not paid on time. It is generally the responsibility of HR to manage employee expectations.

Customer expectations

Keeping customers satisfied is mostly a game of expectation management. When your employees are duly notified of any expectations, they can perform to a more predictable level than when things are left fuzzy. Predictions of work performance can be used to assess how you can adjust customer expectations.

Businesses generally want to keep customer expectations low enough so that they are not overly burdened but still high enough so that customers would choose them over other businesses. The lower the expectations, the easier it is to exceed them. A track record of meeting and exceeding expectations is an important ingredient for trust and customer loyalty. On the other hand, if expectations are set high, but cannot be consistently met, businesses may end up losing customers instead. For example, estimated shipping dates are better overshot than undershot. Customers may appreciate items arriving before they expected them to, but are generally angry if items arrive after it is expected to.

Marketing is a way to set initial expectations. Marketing is a way to entice customers to buy a product, but confusing or misleading marketing can lead to false expectations. These are expectations created that deviated from the reachable expectations and they lead customers to expecting more from a business than it can offer. If expectations are not met, your business needs to be prepared to take responsibility. At the very least customers expect apologies.