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.

Don’t F*ck Up The Culture, Says Airbnb CEO

Brian Chesky, co-founder and CEO of Airbnb recently wrote a post, Don’t Fuck Up the Culture. It’s a note that he sent to all of the Airbnb employees. It’s a good, short read. Here’s an excerpt:

Culture is a thousand things, a thousand times. It’s living the core values when you hire; when you write an email; when you are working on a project; when you are walking in the hall. We have the power, by living the values, to build the culture. We also have the power, by breaking the values, to fuck up the culture.

My take: Chesky is absolutely correct. Culture is a manifestation of an organization’s true values and it shows up in a myriad of ways. It can be an invaluable asset when it’s good and an insurmountable obstacle when it’s bad. It aligns the thinking and actions of employees in ways that are even more powerful than controls and measurement.

I’ve been writing about this topic for a while, so I went back into the Customer Experience Matters way-back machine and found three very relevant blog posts from 2008:

In Inspiration Trumps Coercion And Motivation, I included what I believe is a seminal quote on the topic from Herb Kelleher, founder of Southwest Airlines:

If you create an environment where the people truly participate, you don’t need control. They know what needs to be done and they do it. And the more that people will devote themselves to your cause on a voluntary basis, a willing basis, the fewer hierarchies and control mechanisms you need.

In Discussing Zappos’ Culture With Tony Hsieh, I write about my interview with Zappos’ CEO. Here are a few of the takeaways from that discussion:

  • Tony doesn’t want to prescribe actions for employees that show how much Zappos cares about customers; he wants employees to do things because they genuinely care about customers.
  • Zappos uses its culture as a reason to hire and fire people. All new hire candidates have a separate interview with the HR department that focuses just on cultural fit.
  • Tony offers this advice to Zappos employees: It’s completely up to you guys. I can’t force the culture to happen; so part of your job description is to display and inspire the culture.

In Management Imperative #1: Invest In Culture As A Corporate Asset, I offered four ideas about how execs can manage their corporate culture assets. Here’s the first one on the list:

Track employee goodwill. When companies buy other companies, they often account for part of the price as “goodwill;” acknowledging that items like brand name and competitive positioning can be long-term assets. Following this approach, companies should track “employee goodwill.” How? By surveying employees and reporting the results like you report the balance sheet; analyzing quarterly snapshots and changes over time. Think about creating a metric from  questions like “How committed are you to helping the company achieve it’s mission and objectives?” “How likely are you to recommend this company as a place to work to your family and friends?

I also feel the need to point to a blog post from 2009, Fundamental Flaws In Management Education. This post discusses a fantastic article written by Sumantra Ghoshal, a leading business thinker. Here’s an excerpt:

Unlike theories in physical science, theories in social science tend to be self-fulfilling. A management theory that catches hold, therefore, can change the behavior of managers who act in accordance with that theory. As Ghoshal states, “the “scientific” approach of trying to discover patterns and laws have replaced all notion of human intentionality with a firm belief in causal determinism for explaining all aspects of corporate performance.” In other words, the belief that management is a social science has removed any humanistic traits (like corporate culture) from the equation about what drives corporate performance.

The bottom line: Don’t f*ck up your culture

Leadership Principles for Changing Corporate Culture

I just read a couple of articles about an important topic, corporate culture. The first one, The Rise of the Chief Culture Officer, describes how companies are appointing “Chief Culture Officers.” Here’s an interesting quote from one of those new execs, Maria Gendelman, from North Jersey Community Bank:

I’m there to make sure that every single piece of paper that we give to the customer all looks the same, that our processes are efficient and streamlined — all of those things touch culture.

The other article is an interview with John Taft, CEO of RBC Wealth Management. Here’s what Taft says about culture:

Culture is everything when it comes to responsible, long-term business success… A leader’s job is to discover, communicate and reinforce culture. If you don’t get culture right, nothing else matters.

My take: Company culture is an integral component of long-term success with customer experience. In our recent research The State of CX Management, 2012, we found that one of the most significant things that distinguishes companies that are CX leaders from their peers is a heightened focus on culture.

Executives may be able to mandate a few activities within a company, but corporate culture determines just about everything else in one way or another. Leadership guru Arthur Carmazzi does a great job of describing the value of corporate culture in this quote that I used in the post Management Imperative #1: Invest In Culture As A Corporate Asset:

“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.”

I talk about the intersection of culture and CX as Customer-Centric DNA, defined as:

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

Here are some principles that execs should keep in mind about changing their corporate culture and building customer-centric DNA:

  • People generally conform to their environment (see 6 Laws of Customer Experience: Employees do what is measured, incented, and celebrated). So pay very close attention to the environment that you are creating.
  • Culture is very slow to move, because it often outlasts the senior executive team. Make sure you only attack the portions of the culture that you are truly committed to changing.
  • The first step of changing corporate culture is to fully understand the existing culture. It is important to frame the change in terms of explicit contrasts between the current behaviors and the desired future behaviors.
  • It’s likely that many of your existing leaders are reinforcing the current culture, in ways that they probably don’t even recognize. So changing your corporate culture will likely require some management turnover. As Pablo Picasso once said: “Every act of creation is first of all an act of destruction.”
  • Any leader who wants to transform her organization needs to adopt the three characteristics of transformational leaders: Communicate “why,” model desired behaviors, and reinforce change.
  • Use the 6 C’s of customer-centric culture as levers for change: Clear beliefs, constant communications, collective celebrations, compelling stories, commitment to employees, and consistent tradeoffs.
  • Finally, I’m not a big fan of the Chief Culture Officer position. I’d like to see Chief People Officers (heads of HR) step up to the plate and integrate culture as a core component of their organization’s work. Without culture in mind, how effective can an HR organization be at recruiting, hiring, on-boarding, reviewing, compensating, training, promoting, and outplacing employees?!?

The bottom line: Are you focusing enough on your corporate culture?

Building A Culture Of Service At Cowboys Stadium

I recently spoke with Paul Turner, director of event operations at the Dallas Cowboys stadium. He was recruited to this position from the Philadelphia Eagles 2.5 years ago.

According to Turner, his department is the watchdog for the overall guest experience and the quality of the show and his job is to make sure that there is an infrastructure to consistently deliver on all of the promises that the sales team makes. Here’s how he framed his responsibilities: “We are in the experience business; we can’t guarantee a win.”

Creating a consistently good event experience is not an easy task. There are only a handful of events every year, so most of the game-day staff is made up of part-time employees — and it’s a very diverse workforce. Making the situation even more difficult, there are many organizations working at the Stadium, including other companies like the food service provider, Legends Hospitality.

Paul’s approach has been to create a “culture of service” that is built around the organization’s service mission statement:

We are service professionals at the world’s finest venue creating an exceptional experience for our guests in a safe, clean and friendly environment

The mission statement was created by doing research with the senior executives, so it is widely supported by the Cowboy’s executive team. Turner is empowered by the feeling that even Jerry Jones, the Cowboys owner, is supportive of this mission statement.

Part of the indoctrination for all new employees is to break down the service mission statement into its component parts, beginning with the first word. Employees are taught that  ““We” we are all in this together. We collectively succeed or fail.” And with “service professionals,” employees are made to recognize that the organization plans to treat them like professionals; which, in return, means that they will be held to a high standard of performance.

The staff is also trained on the service mission statement at the beginning of every season and it is reinforced in just about every communication. It’s at the top of all of their game-day materials and training collateral.

Because of the periodic nature of the events, they can’t burden employees with a lot of procedural knowledge. Employees are given a handbook and told that they’ll be doing the right thing if they use the mission statement as their guide.

What does Turner consider his biggest accomplishment? He’s seen a lot of buy-in and the organization hasn’t gotten distracted with a lot of messages; it’s stayed focus on the service mission statement. Turner explained that with a casual workforce, you need consistency.

And, yes, I did admit to Paul that I am a Patriots fan. But only at the very end of our discussion. :-)

The bottom line: There’s a lot of power in simple, consistent messages

8 Customer Experience Trends For 2011

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It’s the time of year when prognosticators drag out their crystal balls and divine about next year. Well, I’m not too different. But instead of a crystal ball, I’ll tap into the 8 customer experience megatrends that I outlined earlier this year. They remain the key trends that I think we’ll see in 2011.

Here are the 8 megatrends along with my thoughts about how they’ll play out in 2011:

1. Customer Insight Propagation. Most decisions in companies are made without any real customer insight. Companies will increasingly recognize that they need to integrate a deeper understanding of their customers throughout their company. That’s why Voice of the Customer (VoC) programs represent one of the most popular customer experience efforts. A new cadre of vendors are making it easier to collect, analyze, and share customer information broadly across just about any organization.

2011: I’ve written a lot about VoC programs this year. Companies are beginning to figure out how to better use the insights and an emerging set of vendors have deployed customer insight and action (CIA) Platforms that can help considerably. But there’s still a long way to go. In the research report The State Of Voice Of The Customer Programs, we found that only 1% of large companies are “Transformers,” which is the highest level of maturity. In 2011,  I expect to see many companies move up on the VoC maturity scale as this continues to be an increasing area of focus next year. Don’t be surprised to see CRM players like Oracle and SAP acquire some of the CIA vendors.

2. Unstructured Data Appreciation. Deep feelings that customers have about a company often get truncated into a 5-point, 7-point, or even 11-point multiple choice scales; making it difficult to understand “why” things are happening. New text analytics applications can quickly process thousands of pieces of unstructured data and discern what’s making customers happy or what’s making them upset; pushing a dramatic rise in companies analyzing rich unstructured data like comments on surveys, call center verbatims, or social media discussions.

2011: As I said in a blog post earlier this year, it’s time for text analytics. I’m working with many companies on strategies for getting deeper customer insights and just about all of them involve a component of text analytics. In 2011, I expect there to be twice as many text analytics pilots as in 2010 and a lot of companies touting success stories at conferences. I expect IBM to make a big push in this area next year with SPSS and I would not be surprised to see Big Blue acquire either Clarabridge or Attensity.

3. Customer Service Rejuvenation As companies do touchpoint analyses and customer journey maps, they often find that customer service is a key “moment of truth” for customers. Unfortunately, the cost-cutting in this area over the last several years has created many poor experiences. Companies are recognizing that poor customer service is creating a very negative perception of their brand and will increasingly make investments to improve these experiences.

2011: During customer service week in October, I discussed how companies sometimes seem to care more about saving $1.50 in transaction costs than they care about $60 worth of business. But, I am seeing some changes. I’ve actually been working with a number of contact centers that are transforming the service they deliver. In 2011, I expect to see more contact centers drop average handle time (AHT) as a core metric and revamp quality measures based on customer feedback.

4. Loyalty Intensification. Over the last several years, many executives have realized that shareholder value is not an objective; it’s actually the outcome of building stronger customer loyalty. As companies starts using measures like Net Promoter Scores (NPS) to track loyalty, more firms will elevate these metrics to their executive dashboard; pushing companies to think and act more strategically about loyalty.

2011: Many companies are developing loyalty metrics and infusing them into their management dashboards. We found that 45% of companies tie compensation to some customer feedback metrics, but don’t push too hard, too early with compensation.  We also found that only 25% of respondents think their senior executives are willing to trade-off short-term financial results for longer-term loyalty. In 2011, it will become much more common for companies to balance loyalty metrics with financial ones. And many companies will evolve beyond fixing problems that cause dissatisfaction and start designing experiences that inspire advocates.

5. Interaction iPod-ization. QWERTY keyboards help make PCs so universal. But a keyboard-based QWERTY device is not the ideal interface for the next generation of digital devices. Fortunately, Apple’s iPod (and iPhones, iPads) are doing the same thing that QWERTY did over 100 years ago, teaching myriads of people how to interact with a touch-screen. As a result, a new wave of touch-pad based applications will emerge.

2011: Add Nooks, Android, and Windows Phone to the list of devices that will be teaching people how to touch, drag, shake, pinch, and tap to get what they need. In 2011, Mainstream PCs with a keyboard and mouse will seem even more like relics’ as people increasingly transition to iPad (and iPad-like) devices.  I also expect to see more voice interfaces emerge.

6. Social Media Assimilation. Social media is a hot topic. But Social Media is not really a new thing for companies; it represents just another interaction channel with customers. Companies will increasingly fold Social Media activities into the core activities of the company; especially within customer service.

2011: I created a term called “Social Schizophrenia” which describes companies that provide levels of service in social media that differ significantly from service levels in other channels. That still describes a lot of companies. In 2011, focus on social media will continue to grow but I expect much more mature approaches as the tools and processes are evolving.

7. Digital/Physical Integration. Consumers increasingly go online with their cell phones while they are doing activities like walking through a mall or eating at a restaurant. At the same time, iPhones have introduced consumers to the notion of task-specific application downloads. In this environment, companies can no longer think about online as a separate and distinct channel. They will start designing more experiences that blend together online and offline interactions.

2011: Mobile applications will increasingly take advantage of location-awareness to provide services and capabilities that are specific to the store, restaurant, hotel, ball park, intersection, or wherever you are. In 2011, we’ll also see more adoption of recognition-based services like Shop Savvy that can scan barcodes and Google Goggles that recognizes landmarks, text — pretty much anything you can take a picture of with your phone. Given the capabilities, I think we’ll see a bunch of integrated digital/physical offerings in the second half of the year.

8. Cultural Renovation. Companies are increasingly recognizing that “unengaged employees can’t create engaged customers” which is one of my “6 Laws Of Customer Experience.” That’s why many firms are starting to focus on the culture of their firms; trying to align employees with the vision, mission, and brand of the company. Cultural change takes several years to take hold; so significant changes won’t show up in companies immediately. But when change happens, it will very difficult for competitors to replicate.

2011: It’s great to see many executives ask for help building a customer-centric culture. I often compare customer experience to quality, which is captured in my manifesto: Great Customer Experience Is Free. I also like usurping this quote from the quality movement: “Great customer experience is the result of a carefully constructed cultural environment. It has to be the fabric of the organization, not part of the fabric.” We gauge customer-centric culture with Temkin Group’s Four Customer Experience Core Competencies. Our assessment of 144 large firms showed that only 3% are customer-centric. In 2011, I expect many companies to put in place the foundations for improving their customer-centricity while a few will revert back to their old ways; this stuff is not easy.

The bottom line: Hopefully you’re ready for 2011!

The Current State Of Customer Experience

We just published a new Temkin Group Insight Report, The Current State Of Customer ExperienceThis report, which is based on a survey of 140+ large North American companies, provides insights into the progress that companies are making on their customer experience journeys.

It looks at topics like the adoption of voice of the customer (VoC) programs and Net Promoter Scores, the use of social media activities, and the goals, obstacles, and ambitions for customer experience. Here’s the executive summary:

Using the Temkin Group customer experience competency model, we found that only 3% of firms were “Customer-Centric Organizations” while 33% of firms were “Customer-Oblivious Organizations.” While companies rated highest in the area of Purposeful Leadership, only 16% received “very good” ratings in that competency area. This data highlights that companies are still in very early stages of customer experience maturity. We expect the results to improve over time; as 65% of respondents want to be customer experience leaders within three years.

Download report for $195

The report has 20 figures; with lots of data. Here are some interesting factoids:

  • Only 16% think they always or almost always delight customers getting customer service online.
  • 95% want to improve profitability, but only 43% want to improve the work environment for employees.
  • 37% have had a customer experience leader for at least 12 months
  • 71% identified “other competing priorities” as a significant obstacle to their customer experience efforts; the most commonly selected of the 11 obstacles we asked about.
  • 57% have a formalized voice of the customer (VoC) program
  • 45% that have a formalized VoC program tie compensation to customer feedback scores; one of the 15 VoC activities we asked about.
  • 32% have been using Net Promoter Score (NPS) for at least 12 months; 19% are not familiar with NPS
  • 31% analyze conversations in social media sites like Facebook and Twitter; the most commonly used of 11 social media activities we asked about.
  • The customer experience competency assessment showed a wide range of results across the 20 questions:
    • Highest scoring: Senior executives regularly communicate that customer experience is one of the company’s key strategies
    • Lowest scoring: Marketing does as much brand marketing inside the company as it does outside the company

In addition to the data insights, the report has a number of self-assessment tools that you can use to compare your efforts to the 140+ respondents:

  • In the Temkin Group Insight Report, The Four Customer Experience Core Competencies (free download), we introduced an assessment tool for our competency model. This report allows you to compare your results with 140+ other companies.
  • A tool for gauging your voice of the customer (VoC) activities
  • A tool for gauging your social media activities

Download report for $195

The bottom line: Customer experience management is still immature

Saks CEO Shares His Leadership Approach

I read an interesting interview with Stephen Sadove, chairman and chief executive of Saks, who discussed his approach to management. Here’s an excerpt:

I have a very simple model to run a company. It starts with leadership at the top, which drives a culture. Culture drives innovation and whatever else you’re trying to drive within a company — innovation, execution, whatever it’s going to be. And that then drives results.

My take: Sadove’s approach is spot-on; and can be simplified to:

Leadership => Culture => Operational effectiveness => Business results

Sadove seems to understand what many executives lost sight of over the past decade, which is well stated by Jack Welch: “On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy.” Rather than focusing on profits, he recognizes that profits are the outcome of a chain of events that starts with good leadership.

Sadove’s comments also line up nicely with several of the 6 New Management Imperatives that I outlined last year:

  1. Invest in culture as a corporate asset
  2. Make listening an enterprisewide skill
  3. Turn innovation into a continuous process
  4. Provide a clear and compelling purpose
  5. Extend and enhance the digital fabric
  6. Practice good social citizenship

The bottom line: Execs that want results need to focus more on people

The Four Customer Experience Core Competencies

Go to the updated version of this report

 

Temkin Group is happy to release this new Insight Report, The Four Customer Experience Core Competencies, which you can download for free.

This report describes the four competencies that companies need to master in order to build and sustain customer experience success.

Here’s the executive summary of the report:

Organizations that want to become customer experience leaders need to master four customer experience competencies: Purposeful Leadership, Employee Engagement, Compelling Brand Values, and Customer Connectedness. Gauge how close your company is to being a Customer-Centric Organization using Temkin Group’s competency model to identify strengths and weaknesses.

I urge you to read this report, share it with others in your organization, and take the competency assessment which is shown in figure 3.

The bottom line: Start building your customer experience competencies

Costco, Newark, and NC On Leadership

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

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

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

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

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

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?

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?

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