Nadella Pushes Microsoft to Rediscover Its Soul

In a letter to all Microsoft employees called Starting FY15 – Bold Ambition & Our Core, CEO Satya Nadella established a mandate and vision for significant change across the technology behemoth.

Microsoft has great assets, but it has not kept up with changes in how people use technology. The Redmond giant was becoming increasingly less relevant in a world where digital technology is becoming more relevant.

Microsoft has needed to change for a while. There’s a saying that the best time to plant a tree is ten years ago and the second best time is right now. Nadella has made it clear that Microsoft’s time for change is right now.

My take: First of all, it’s hard to talk about any large-scale culture change without recommending that people review our model called Employee-Engaging Transformation, which is built on five practices: Vision Translation, Persistent LeadershipActivated Middle ManagementGrassroots Mobilization and Captivating Communications.

EET2

We work with many of the world’s leading technology companies, so I could go on and on about what changes are necessary at Microsoft. But I’d rather examine broader lessons from Nadella’s letter. Here are some excerpts that I thought were particularly valuable to discuss:

“...in order to accelerate our innovation, we must rediscover our soul – our unique core

Successful companies almost always start with a strong raison d’être, but it can get lost as the company grows and the world changes (see my post on Starbucks). Without a “soul,” companies drift along as employees across the organization start operating in a disconnected way. This is where the brand comes in. Companies need to constantly refresh their brands and make sure that the brand drives decisions across the organization (see my post on Walmart).

More recently, we have described ourselves as a “devices and services” company. .. At our core, Microsoft is the productivity and platform company for the mobile-first and cloud-first world. We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more.”

Our research shows that employees are more productive and engaged when they are inspired by their organization’s mission. Which one of these statements do you think is more inspiring: “We are the devices and service company” or “We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more.”

“We will create more natural human-computing interfaces that empower all individuals.”

This is a comment about technology, but its also points to a broader commentary about making things easy to use. We have entered into a world where people have more options, more distraction, and less patience. Every organization needs to relentlessly focus on making their products, services, and processes easier for customers to use.

Obsessing over our customers is everybody’s job. I’m looking to the engineering teams to build the experiences our customers love.

What’s not to love about this excerpt. My customer experience manifesto (and Temkin Group, for that matter) is built on a fundamental belief that sustaining great customer experience is not about applying a veneer, but about building competencies across the entire organization that create great experiences for customers (see our four CX core competencies). Also, it’s interesting that Nadella used the word “love.” Experiences are made up of three component (functional, accessible, and emotional) and our Temkin Experience Ratings show that companies are weakest at driving the emotional component. To get people to “love” your company, I suggest applying what we call People-Centric Experience Design.

“I am committed to making Microsoft the best place for smart, curious, ambitious people to do their best work.”

One of the Six Laws of Customer Experience is that unengaged employees can’t create engaged customers. Any company looking to improve how it interacts with customers almost certainly needs to focus on its employees.

“We will be more effective in predicting and understanding what our customers need and more nimble in adjusting to information we get from the market.”

How companies use customer insights is changing rapidly. Technologies such as text analytics and predictive analytics are helping companies tap into more comprehensive and ongoing insights, rather than relying on periodic customer surveys. Ultimately, companies will need to reinvent their operating frameworks so that they can adjust more frequently to take advantage of these rapidly-flowing insights.

Nothing is off the table in how we think about shifting our culture to deliver on this core strategy.”

This type of statement only works if it’s backed up by clear actions that employees can observe. These “symbols” of change need to be clear departures from how the company operated in the past, and can include reorganizations, firings/hirings/promotions/demotions, killing projects, accelerating projects, etc.). Don’t just say change is coming, demonstrate it (see the 3 characteristics of transformational leaders).

“We must each have the courage to transform as individuals. We must ask ourselves, what idea can I bring to life? What insight can I illuminate? What individual life could I change? What customer can I delight? What new skill could I learn? What team could I help build? What orthodoxy should I question?”

The notion of a personal challenge is a great way to help employees think about how they can be (and must be) a part of the change. But the questions won’t be too powerful if they are just statements in a letter from the CEO. Use these questions as part of discussions across the organization and embed them into leadership training and competency models.

 The bottom line: Change isn’t easy, but Microsoft seems ready to give it a try.

Report: The State of Customer Experience Management, 2014

1404_TheStateOfCX2014_COVERWe just published a Temkin Group report, The State of CX Management, 2014. It examines the CX efforts within more than 200 large companies. Here’s the executive summary:

We surveyed more than 200 large companies and found an abundance of Customer Experience (CX) ambition and activity. Most companies have a CX executive leading the charge, a central team coordinating significant CX activities, and a staff of six to 10 full-time CX professionals. Using Temkin Group’s CX competency assessment, we found that only 10% of companies have reached the highest two levels of customer experience, although this does represent a slight increase from last year. Most firms struggle most to master Employee Engagement and Compelling Brand Values. When compared with CX laggards, CX leaders have stronger financial results, enjoy better CX leadership, and implement more successful employee engagement efforts. Executives in companies with stronger CX competencies also tend to focus more on delighting customers and less on cutting costs.

Download report for $195
BuyDownload3

The percentage of large organizations that have reached the two highest levels of customer experience maturity has grown from 6% in 2013 to 10% this year. During the same period, the percentage of companies in the lowest level of maturity has dropped from 40% to 31%.

1404_CXMaturity

Here are some additional findings from the research:

  • Companies with good or very good ratings in Purposeful Leadership rose from 39% to 45%, the largest improvement for any customer experience competency.
  • The research also revealed a significant focus on improvement. While only 6% of companies believe that their organization currently delivers industry-leading customer experience, 58% have a goal to be an industry-leader within three years.
  • Sixty-five percent of companies have a senior executive in charge of customer experience.
  • More than half of companies have at least six full-time customer experience professionals.
  • Almost two-thirds of respondents rate customer experience with phone agent as good or very good, the highest rated interaction. Less than 30% rate mobile phone and cross-channel experiences at that level.
  • The top obstacle to customer experience is the same as it has been for four years, “other competing priorities.”
  • We compared companies that have strong customer experience maturity with those that are weaker and found that customer experience leaders have better financial results, have more senior executive commitment, and focus more on their organization’s culture.

Download report for $195
BuyDownload3

The bottom line: Most companies are in early stages of CX maturity, but are getting better

United Airlines Can’t Advertise Its Way To Flyer-Friendly

United Airlines recently announced that its new brand campaign will resurrect its iconic tagline “Fly the Friendly Skies.” According to the United Airlines press release, “”Flyer-friendly” is “user-friendly” for today’s customers.” Tom O’Toole, United’s senior vice president of marketing and loyalty, says, “Our new brand campaign expresses the customer focus of all of United’s investments.” As Jane Levere points out in her NY Times article, “United is now telling travelers it is everything from “legroom friendly” and “online friendly” to “shut-eye friendly” and “EWR friendly.”

My take: Let’s start with some basic facts. United Airlines received a “poor” rating in the 2013 Temkin Experience Ratings. Its ratings are in the lower half of the airline industry, and the company showed no improvement over 2012.

In the 2013 Temkin Customer Service Ratings, United Airlines was in next-to-last place out of nine U.S. airlines (US Airways is the worst). United Airlines ranked 216th out of all 235 companies in the ratings.

Does that sound “flyer-friendly?” United Airlines will have a hard time backing up that claim today.

No matter how much companies spend on advertising, they can’t convince customers that they deliver a good experience — unless they really do. In the past, I’ve chided Comcast, JP Morgan ChaseCircuit City, and John Hancock for pushing these empty promises.

The path to being seen as flyer-friendly requires the organization to commit to delivering on that promise. I’ve highlighted a few good examples in previous posts: Alaska Airlines engaged its employees with its North of Expected campaign, Ford engaged its employees with its Drive One campaign, Staples redesigned customer interactions as part of its That Was Easy campaign, and JetBlue embedded its value across touchpoints in its Happy Jetting campaign.

My advice to United Airlines it to follow these CX Tips:

The bottom line: Don’t proclaim your flyer-friendliness, become flyer-friendly and then tell people about it

CX Tip #3: Regularly Refresh Your Brand Promises

50CXTips6b_65

CX Tip #3: Regularly Refresh Your Brand Promises
(Compelling Brand Values)

Starbucks CEO Howard Shultz once said “Customers must recognize that you stand for something.” While most organizations start with a clear brand promise, the focus on short term goals can easily push them away from delivering on it. Decisions across an organization may seem reasonable in their immediate context, but they can collectively push a company off its course.

Once the brand promise is lost, organizations will often spiral out of control without the brand as their True North guiding the way. That’s what happened to Starbucks in 2007. Shultz returned to the company in early 2008 to help restore the brand promise. His assessment of the situation: “We lost our way.” The company closed more than 7,000 stores on one day for a three-hour session to re-instill the brand promise with employees.

Rather than waiting for the painful recognition that your organization has lost its way, examine your brand promise at least every two years. Even if nothing changes, the process of reaffirming your brand can be powerful. Make sure that your brand promises are recognizable, believable, compelling, and well understood by both customers and employees.

See full list of CX Tips

CX Tip #8: Start Your Brand Marketing Internally

50CXTips6b_65

CX Tip #8: Start Your Brand Marketing Internally
(Compelling Brand Values)

Brands need to be understood and “owned” by the entire organization. That’s why it’s critical for companies to invest heavily in communicating the brand value to everyone in the company. Before BMO Financial Group’s new brand went live, it launched an internal campaign, Brilliant at the Basics, which identified eight actions that every employee could demonstrate, including “Our heads are up, not down;” “Everyone pitches in…titles don’t matter;” and “Help in choosing, not choices.” Employees were given a brand book which covered the brand principles, including a breakdown of what’s different “tomorrow from today.” The launch kit for leaders and branch managers included a DVD and materials covering key messages and talking points, along with anticipated questions and answers to prepare them to lead discussions with their teams. Click for more info

See full list of CX Tips

CX Tip #24: Define Competencies for Living the Brand

50CXTips6b_65

CX Tip #24: Define Competencies for Living the Brand
(Compelling Brand Values)

Microsoft defined six values to support its corporate mission: To enable people and businesses throughout the world to realize their full potential Of the values created towards this mission, a Passion for Customers, Partners, and Technology. To foster its values, Microsoft has developed a set of key competencies (core, leadership & profession specific) that every employee is measured against in terms of their proficiency in demonstrated behaviors. The competencies help to plan careers, build necessary capabilities for success in a role, and inform performance reviews. “Customer Focus” is core competency for all employees, measured on a 5 point proficiency scale. Click for more info

See full list of CX Tips

CX Tip #34: Create Path for Grassroots Communications

50CXTips6b_65

CX Tip #34: Create Paths for Grassroots Communications
(Purposeful Leadership, Compelling Brand Values, Employee Engagement)

Started in the early 1990s, PRIDE Teams—made up of a network of 700+ employees—are one of USAA’s ongoing listening efforts. Each of the 70+ teams is led by a director or executive director who facilitates grass roots communications across the organization. PRIDE Team members have their day jobs, but spend up to ten percent of their time on two-way communications between the team and their workplace colleagues. They reinforce key messages from senior leadership and connect with their peers, bringing key insights from their colleagues to USAA leaders. Click for more info

See full list of CX Tips

%d bloggers like this: