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Costco, Newark, and NC On Leadership November 18, 2009

Posted by Bruce Temkin in Corporate culture, Customer experience, Customer-centric DNA, Executive leadership.
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Before getting on my flight to Madrid, I picked up U.S. News & World Report. It’s not my typical in-flight reading, but the topic caught my attention: America’s Best Leaders 2009. Here were a few of the highlights from the issue:

  • Jim Sinegal, CEO of Costco, shared his view on employee engagement:
    • “We try to give a message of quality in everything we do, and we think that that starts with the people. It doesn’t do much good to have a quality image, whether it’s with the facility or whether it’s with the merchandise, if you don’t have real quality people taking care of your customers.”
  • Corey Booker, Mayor of Newark, shared advice that he follows:
    • “My mom used to say that who you are speaks so loudly that I can’t hear what you say.” Also look at a previous post with this quote from Booker: “Life is about focus. What you focus on, you become. If you focus on nothing, you become nothing.
  • Roy Williams, head coach of North Carolina, listed his three guiding leadership principles:
    • “(1) Everyone on the team must focus on the same goal. It’s my job to effectively communicate those goals to the team; (2) Emphasize those goals every day; and (3) Understand that although everyone has a common goal, individuals also have goals, needs, and dreams that must be cared for.”

The bottom line: These are great leadership lessons to follow.

Inside Ritz-Carlton’s Customer-Centric Culture November 9, 2009

Posted by Bruce Temkin in Corporate culture, Customer experience, Customer-centric DNA.
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I just read an interesting interview in Forbes with Simon Cooper, president of the Ritz-Carlton, who provides some insight into Ritz-Carlton’s customer-centric culture. Here are some of Cooper’s remarks:

  • We focus on three fundamentals. First, location–making sure we get absolutely the best location. Second, product–building the right physical product for what our guests want today and what they will want tomorrow. That’s the platform. Third, people–our ladies and gentlemen serving ladies and gentlemen. They animate the platform.
  • We use what we call “lineup,” which is a Ritz-Carlton tradition… we want every single hotel, everywhere in the world, every partner, every shift, to utilize lineup, which typically takes around 15 minutes every day…That is a wonderful training and communication tool, where every department layers on the department message.
  • Part of the lineup everywhere around the world is a “wow story,” which means talking about great things that our ladies and gentlemen have done.
  • We entrust every single Ritz-Carlton staff member, without approval from their general manager, to spend up to $2,000 on a guest. And that’s not per year. It’s per incident… The concept is to do something, to create an absolutely wonderful stay for a guest.
  • A culture is built on trust. And if leadership doesn’t live the values that it requires of the organization, that is the swiftest way to undermine the culture.

My take: As you may remember, I wrote about my less-than-ideal experience at the Ritz-Carlton in Puerto Rico. After I wrote that post (and complained at the front desk), one of the managers called me, apologized for our problems, and offered us a free dinner in the hotel’s nicest restaurant. It was a great meal; and it created a positive impression of the hotel.

As you can see from Cooper’s remarks, this type of customer-centric behavior is no accident. Ritz-Carlton empowers its “ladies and gentlemen” to deliver great experiences for customers. To get a better sense of how this hotelier operates, take a look at the Ritz-Carlton Gold Standards.

If you want to develop a customer-centric culture, here are some additional posts that should help:

The bottom line: A customer-centric culture takes purposeful leadership.

Yum! Tunes Culture For Breakthrough Results November 2, 2009

Posted by Bruce Temkin in Corporate culture, Customer experience, Executive leadership.
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Yum! Brands (owners of brands like KFC, Pizza Hut and Taco Bell) identified three key initiatives across its brands: 1) selling more healthy items; 2) offering a greater variety of drinks; and 3) changing menus according to the time of day. But the company was not in a position to take on these bold initiatives. According to an article in the Economist:

The main obstacle to such ideas was Yum!’s corporate culture, in which different brands and operations in different countries had little to do with one another, slowing the spread of new initiatives.

When Yum!’s CEO Dave Novack visited its very successful Chinese organization, he noticed employees using terms such as “future back vision”, “bold request” and “action versus activity” which had created ”a healthy dissatisfaction with the status quo.” It turns out that many of these ideas came from John O’Keeffe, a management consultant.

That’s why the company engaged O’Keeffe on what Novack calls the “biggest culture-change initiative in the world today.” O’Keeffe helped create Yum!’s “Achieving Breakthrough Results” program which was designed to be passed down from manager to subordinates across the company — starting with the company’s top 200 executives.

My take: Kudos to Novack for recognizing that Yum!’s culture is a critical element of the company’s performance. He’s clearly practicing the first of my 6 New Management Imperatives: “Invest in culture as a corporate asset. “

While CEOs can push some change into their organizations, corporate cultures determine the effectiveness of those efforts. In some cases, a corporate culture will accelerate results while in others it will dampen or even block the results.

If corporate culture is hampering your company’s performance, then it’s time to address the issue. Rather than continuing to waste money and time on partially successful initiatives, you should make the long-term investment in improving your corporate culture.

The bottom line: Figure out if your culture is an asset or an obstacle.

The Physiological Power Of Storytelling September 1, 2009

Posted by Bruce Temkin in Corporate culture, Customer experience, Customer-centric DNA.
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One of the key topics I write about is corporate culture.  It’s such an important area that the first item on my list of The 6 New Management Imperatives is: “Invest in culture as a corporate asset.” It turns out that storytelling is one of the key levers for affecting corporate culture.

There are actually some physiological reasons why storytelling is important. I just read an interesting blog post that talks about the research of Marco Iacoboni, Professor of Psychiatry and Biobehavioral Sciences at UCLA. One of the key insights is that

People relate to stories because it is part of their evolutionary makeup. Stories cause our mirror neurons to fire at similar experiences, helping us remember and relate

The more that people can recognize themselves in a story, the more it will draw them into the content. So great communicators need to create narratives that relate to the people who they want to influence. The blog post goes on to explain that storytelling was a key part of President Obama’s success. As an example, take a look at this segment from one of his speeches (think about how many people can relate to these words):

There’s not a liberal America and a conservative America; there’s the United States of America. There’s not a black America and white America and Latino America and Asian America; there’s the United States of America.

The bottom line: Great storytelling can help change corporate culture

Take 5 Minutes To Build Customer Loyalty August 1, 2009

Posted by Bruce Temkin in Corporate culture, Customer experience, Customer loyalty.
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I recently blogged about Hyatt’s plan to offer some customers “random acts of generosity.” I’ve received a number of comments about how this program seems  “forced” and may actually backfire if customers start expecting acts of generosity. But the research in that post also showed that unexpected value can cause gratitude which creates a potentially strong foundation for loyalty.

So what should companies do? Take Five!

Disney trains its staff on a program called Take Five. Cast members (employees) are expected to take five minutes from their normal daily duties to do something special for their guests; they call it being aggressively friendly.

These aren’t meant to be random acts like paying for somebody’s drinks, but little things that are contextually relevant to the guest. For example, when one cast member heard that a guest wasn’t feeling well, she went on her own to get some chicken soup and bring it to the guest in her room.

How can companies make this type of program work:

  • Encourage it. Companies need to teach employees to look for and act on relevant opportunities for helping customers. Using language like “Take Five” for the program will help embed it in the culture. As with any of these programs, employees should understand “why” this is happening and also be given clear parameters.
  • Talk about it. As I mentioned in a recent post, storytelling is a powerful tool for shaping culture. Workgroups should share these experiences in normal team meetings (to motivate and to learn) and execs should share these stories at company wide venues to demonstrate their commitment and to motivate employees. 
  • Reward it. One of my 6 laws of customer experience is that employees do what is measured, incented, and celebrated. So companies should think about creating awards to honor employees for going above and beyond their duties to help customers — in five minute segments.

The bottom line: It’s worth five minutes per day to wow your customers.

Use Storytelling To Define Your Culture July 26, 2009

Posted by Bruce Temkin in Corporate culture, Customer experience, Customer-centric DNA.
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Stories are a critical component of corporate culture. That’s why one of my 6 Cs of customer-centric DNA is “Compelling Stories.” Author Philip Pullman once said: 

‘Thou shalt not’ is soon forgotten, but ‘Once upon a time’ lasts forever.

So I was intrigued when I found a story called “Telling Tales: The art of corporate storytelling” in a 2007 edition of a magazine for Costco’s members.

The article offers-up advice for developing your corporate stories, which I’ve refined into these five items:

  • Identify what stories you want; select key elements of your culture.
  • Craft powerful stories; look for good stories and then write them down and perfect them.
  • Use an employee’s name; specificity is good and it helps boost morale.
  • Keep it short; if it’s too long, it’s hard to remember and repeat.
  • Use and re-use the story; don’t be shy in retelling the story.

One word of caution: Make sure you’re being honest. The stories will only work if they reinforce actual pieces of your culture. So you need top be clear about how your company operates. As Jack Welch is known for saying: Deal with the world as it is, not how you’d like it to be. 

The bottom line: Tell stories with a purpose

Will Amazon.com Kill Zappos’ Core Values? July 23, 2009

Posted by Bruce Temkin in Corporate culture, Customer experience, Customer-centric DNA.
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Amazon.com just purchased Zappos, an up-and-coming online-centric shoe retailer, for $928 million. That’s right, Amazon.com spent nearly $1 billion on a company that earned only $40 million in 2008. Wow!

My take: I’ve been a big fan of Zappos, often writing about the company in this blog. As a matter of fact, my interview with Zappos CEO Tony Hsieh was one of my favorite research interviews over the past few years.

The company was built around, and maintains, a very strong customer-centric culture. At the cornerstone of its culture are Zappos 10 core values:

  1. Deliver WOW Through Service
  2. Embrace and Drive Change
  3. Create Fun and A Little Weirdness
  4. Be Adventurous, Creative, and Open-Minded
  5. Pursue Growth and Learning
  6. Build Open and Honest Relationships With Communication
  7. Build a Positive Team and Family Spirit
  8. Do More With Less
  9. Be Passionate and Determined
  10. Be Humble

Hsieh told me that he hires, fires, and promotes people based on their embodiment of these values.

Hsieh has done a great job of embracing one of the 6 new management imperatives that I’ve defined called Invest in culture as a corporate asset. At the end of the day, Zappos’ key asset is its culture.

Amazon.com obviously expects to get more than $40 million in annual earnings for its $1 billion. If it’s looking for much faster growth, significantly more profitability, or a rapid expansion across categories, then how will these goals affect Zappos’ fanatical focus on in it’s 10 core values?

I hope that Zappos’ culture survives.

The bottom line: Will the Zappos culture thrive or die at Amazon.com?

My Corporate Culture Favs Over 2 Years July 5, 2009

Posted by Bruce Temkin in Corporate culture, Customer experience, Customer-centric DNA.
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In a continuation of the look back at my first two years of blogging, today I’m listing some of my…

Favorite Corporate Culture Posts 

I really like how leadership guru Arthur F. Carmazzi describes the value of corporate culture:

The ability to do more than expected does not come from influencing others to do something they are not committed to, but rather to nurture a culture that motivates and even excites individuals to do what is required for the benefit of all.

The bottom line: Organizations change, but culture persists.

Will An Efficient Culture Destroy Microsoft? June 4, 2009

Posted by Bruce Temkin in Corporate culture, Executive leadership.
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I just read an interview of Microsoft’s CEO Steve Ballmer in the New York Times that really caught my eye. Ballmer was asked the following question: “Fill in the blank. You want the culture of your company to be more __________?”

Here was his response:

Efficient. The right word is efficient. That’s the direction that every business leader is steering their corporate culture. Given the current economic climate and the uncertainty about how long the recession will last, this is a time when organizations need to do more with less, Microsoft is no exception…

My take: For Microsoft’s sake, I hope that Ballmer misspoke. For all of our sakes, I hope that he’s wrong.

I can’t imagine how awful it would be to work in a company if its culture was built around efficiency. Don’t get me wrong, I aim to be hyper-efficient. But that’s quite different from defining efficiency as the cornerstone of your corporate culture.

What type of an environment would it be if the most important thing that employees cared about, were measured on, and got promoted for was efficiency? The answer: Horrible.

There’s no doubt that Microsoft, like other companies, needs to do more with less in this economic downturn. But creating a culture focused around efficiency would be one of the worst responses to this environment.

So, as I said, hopefully Ballmer misspoke. If not, I anticipate a very difficult time for Microsoft as it struggles to retain employees (who get burned out) and customers (who want more than efficiency). And we can say goodbye to any innovation in Redmond. That’s just not efficient.

My suggestion to Ballmer: Redirect towards a customer-centric culture.

The bottom line: Efficiency may be a good goal, but it’s a terrible culture.

6 C’s Of Customer-Centric DNA April 10, 2009

Posted by Bruce Temkin in Corporate culture, Customer experience, Customer-centric DNA.
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6cs-of-ccdna_v2_small

It’s impossible to talk about customer experience excellence without discussing corporate culture. Firms can’t sustain customer experience success unless it becomes embedded within their core operating fabric. According to leadership guru Arthur F. Carmazzi:

The ability to do more than expected does not come from influencing others to do something they are not committed to, but rather to nurture a culture that motivates and even excites individuals to do what is required for the benefit of all.

Culture is an important, yet all too often under-appreciated, aspect of corporate performance. That’s why ”Invest in culture as a corporate asset” is one of my six new management imperatives.  

When it comes to great customer experience, organizations must develop a culture that I call customer-centric DNA, which is defined as:

A strong, shared set of beliefs that guides how customers are treated.

My research uncovered the following six components of customer-centric DNA:

  1. Clear beliefs. The only way for an organization to operate consistently is if everyone understands what’s important. High performing organizations don’t leave this to chance; they create clear descriptions of their core values. But these aren’t just posters or slogans; they’re used as guideposts for hiring, firing, and promoting employees.
  2. Constant communications. When a company goes through a major transformation, which is true for most firms in the midst of a customer experience journey, it’s important for employees to continuously hear what’s going on. Leading firms develop explicit internal communications plans to make sure that employees are kept up to date on the priorities and progress of these efforts. 
  3. Collective celebrations. Organizations celebrate when individuals or groups outperform metrics for sales growth or profitability. In customer-centric cultures, companies generate the same excitement around customer experience success. These firms create customer experience metrics and use public acknowledgements and incentives to reward employees for exceeding those goals. (See law #5 of customer experience: Employees do what is measured, incented, and celebrated).
  4. Compelling stories. The author Philip Pullman was quoted as saying “‘Thou shalt not’ is soon forgotten, but ‘Once upon a time’ lasts forever.” Stories play a powerful key role in shaping the culture of any firm. Companies use stories to tell how founders or employees have helped customers, demonstrating customer-centric behaviors that are valued by the organization.
  5. Commitment to employees. There’s no way to deliver great customer experience if employees aren’t on board. But you can’t just “expect” employees to do what’s right. Companies need to help employees better serve customers with investments in training and enabling tools. Leading companies also provide incentives and perks that create highly-desirable work environments. (See law #4 of customer experience: Unengaged employees don’t create engaged customers).
  6. Consistent trade-offs. Employees respond to what execs do more than to what they say. So guess what happens when execs proclaim that customer experience is important but continue to reward other behavior. Nothing. The true commitment to customer experience shows up when executives have to make trade-offs. (See law #6 of customer experience: You can’t fake it).

I’ll explore each of these 6 C’s of Customer-Centric DNA in later posts.

The bottom line: Don’t underestimate the power of customer-centric DNA.