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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.

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

It’s Time To Engage Your Employees August 27, 2009

Posted by Bruce Temkin in Customer experience, Customer-centric DNA, EBD #3: Treat Customer Experience As A Competence.
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As I was catching up on my reading, I ran across an article in BusinessWeek that discusses research from Gallup showing that less than 30% of the corporate workforce is truly engaged in its work. Why does this matter? The article points to some findings at Best Buy:

For every one-tenth-of-a-point increase in employee engagement, each Best Buy store increased profits by $100,000 a year.

My take: Less than one-third of employees are engaged in their work. Wow, that’s a huge opportunity! Companies that are looking to build more loyal customers need to look at their employees first. As I discuss in my eBook The 6 Laws Of Customer Experience: Unengaged employees don’t create engaged customers. Companies trying to improve the customer experience without figuring out how to engage the other 70% of their workers will likely fail.

That’s why I like what Alaska Airlines did with its North Of Expected campaign. Even with the backdrop of a difficult economic environment, the airline seized the opportunity to energize its workforce. Prior to rolling out its external marketing campaign, the company spent 10 weeks on an internal campaign called “Be North Of Expected” that engaged employees in Alaska Airline’s heritage of good customer service.

The bottom line: Employee engagement is a required path to customer loyalty

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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7 comments

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?

The Yellow Brick Road To Customer Experience Maturity July 13, 2009

Posted by Bruce Temkin in Customer experience, Customer-centric DNA, Forrester's Customer Experience Forum.
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I’ve written about how my opening keynote speech at Forrester’s Customer Experience Forum was based on Dorothy’s journey in The Wizard Of Oz. Given the story that I was telling, I presented the five stages of customer experience maturity as a yellow brick road.

As part of the discussion, I highlighted two components for each stage: 1) key focus and 2) cultural change. Since this part of my speech spanned several slides, I created this single graphic to capture the key content for my blog.

5 stages of CxP maturity_2

The bottom line: It’s time to map out your trip along this yellow brick road.

My Corporate Culture Favs Over 2 Years July 5, 2009

Posted by Bruce Temkin in Corporate culture, Customer experience, Customer-centric DNA.
3 comments

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.

Execs Need To Focus More On Culture May 4, 2009

Posted by Bruce Temkin in 6 New Management Imperatives, Customer experience, Customer-centric DNA.
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2 comments

Here’s an excerpt from Bruce Nussbaum’s recent blog post on BusinessWeek called Chrysler, Culture and Cerberus:

The Obama Administration’s lead car guy, Steven Rattner, is a Wall Street investment banker who lives by numbers and it makes sense to him to basically give Chrysler to Fiat to save American jobs. But neither he, nor Nardelli nor President Obama understand that cars and car organizations are all about culture, not numbers.

In the post, Bruce poses the question of whether it’s more important to manage a business by the numbers or to manage the culture. Great question!

My take: I wrote a post about Bob Nardelli’s reign at Home Depot called Home Depot Still Has A Spark Of Customer Centricity which was a follow-on to a post that looked at how Frank Blake (who replaced Nardelli) was trying to rebuild Home Depot’s customer-centric culture. These represent a case study about the potential downfall of  ”numbers-driven” management style.

Here’s the comment that I left on the BusinessWeek blog:

The problem is that you need to manage both; culture and numbers. Over the last few decades, however, executives have overdosed on the numbers. So it leads to situations where leaders like Nardelli sap the soul out of Home Depot because they don’t understand culture.

Times have changed, but management has not kept up. That’s why I wrote a mini book called “The 6 New Management Imperatives: Leadership Skills For A Radically Changed Business Environment.” The first imperative is: “Invest in culture as a corporate asset.”

The bottom line: Culture is an undermanaged asset.

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

Posted by Bruce Temkin in Corporate culture, Customer experience, Customer-centric DNA.
14 comments

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.