Ford’s CEO On Purpose, Focus, And Leadership

I read an interesting Q&A with Alan Mulally, president and CEO of Ford. What I liked was the way he talks about the  role of a leader. Here are some excerpts from Mulally’s responses:

The more senior your management position is, the more important it is to connect the organization or the project to the outside world… I think the most important thing is coming to a shared view about what we’re trying to accomplish… What are we? What is our real purpose?… and then everybody gets a chance to participate and feel that accomplishment of participating and contributing.

Mulally lists four things that he really focusses on:

  1. Connecting to the outside world — where is the world, technology, customers and competition going?
  2. What business Ford is in; what are they going to focus on?
  3. Balancing the near-term and the long-term; will the plans work in the near term and also create value for the long term?
  4. The values and standards of the organization; what are the expected behaviors?

My take: Mulally provides great insight into leadership; which is quite different from management. Getting a large organization to work together in a way that drives value isn’t the same as pushing for high quality output from your direct reports. Leaders need to instill a clear sense of purpose throughout the entire organization.

The bottom line: Mulally has shared some valuable leadership lessons.

A Look Back At My First Year Of Blogging

1st Year Aniversary For Customer Experience Matters

Today is a big day. It’s exactly one year after my first post “Lessons Learned From 1,001 Web Site Reviews.”

It’s hard for me to believe that I’ve been doing this for a whole year. Or as the song from Rent goes, for five hundred twenty five thousand six hundred minutes. But my measurement is not in daylight, sunsets, midnights, or cups of coffee. It’s in blog posts, 184 of them!

While blogging takes a ton of time (I’m constantly looking for interesting topics and drafting posts), it’s been a great experience. Why? Because of you! Readership continues to grow and this blog now has more than 10,000 visitors per month. So I want to say thank you to everyone who has been reading, linking to, writing about, and passing along my blog.

In honor of the 12 months of blogging, I’ve picked out 12 of my favorite posts (in no particular order):

  • Experience-Based Differentiation. This is the core idea which drives my research; it also  won the best research award at Forrester. Experience-Based Differentiation, or EBD as I fondly call it, is based on three principles: Obsess about customer needs, reinforce the brand with every interaction, and treat customer experience as a competency. This remains a powerful blueprint for customer experience excellence. If you’re interested in customer experience (who isn’t?!?), then you may want to use the EBD self-test as a starting point. You can also find many other posts about EBD on this blog.
  • My Manifesto: Great Customer Experience Is Free. This post summarizes my perspective on customer experience; it’s a lot like the quality problems of the 1980s. While customer experience is not an easy situation to deal with, it can DEFINITELY be improved with a systematic effort; it just takes discipline (see EBD above). There was also a follow-on to this post called Great Customer Experience Is Free, Part II.
  • Don’t Let Profits Replace Purpose. Companies need to make profits, but here’s the dilemma: if they just focus on making profits, then they lose sight of what makes them special. Firms that lack a strong raison d’être have a hard time aligning the efforts of their employees. In a related post, I discussed how Firms Need Some Soul Searching.
  • The Holy Grail: A Link Between Customer Experience And Loyalty. I’ve been hoping to do this for a while: use data to provide the connection between customer experience and loyalty. And I finally did it. My analysis shows a high degree of correlation across the 9 industries that I examined, with the the strongest linkage for banks. That finding fits nicely with an earlier post which said that banks need to prepare for customer experience wars.
  • Trend Watch 2008 Wrap-Up. I really enjoyed writing a series of posts over the New Years break that examined trends published in The Economist, The McKinsey Quarterly, Advertising Age, Business Week, and Trendswatch.com. While I discussed 52 trends across all of the posts, this wrap-up looked at 14 that covered 4 areas: Consumer needs, online opportunities, required skills, and strategy & culture. 
  • Learning From The Good Fortune Advice Of Others. Fortune Magazine published advice from 25 famous people, and I commented on 8 of them that I really liked. There was great advice from big names like HP’s CEO Mark Hurd, Disney’s CEO Bob Iger, and Ford’s CEO Alan Mulally. But my favorite person on the list is Indra Nooyi, Chairman and CEO of Pepsico (who I found out about in a Time Magazine article). Her advice: “Whatever anybody says or does, assume positive intent.”  
  • Discussing Zappos’ Culture With Tony Hsieh. As a researcher, I get to interview a lot of people. But my discussion with Tony Hsieh, the CEO of Zappos was really memorable. It started a few minutes before our call when Tony twittered that he was waking up early (7:00 AM on Memorial Day) and needed a Red Bull before he spoke with me. Tony was great and I’ve become an even bigger fan of Zappos after the call. I also wrotr about another CEO that really understands customer experience, Wachovia’s Ken Thompson.
  • JetBlue’s “Happy Jetting” Is More Than Empty Promises. After a series of posts that looked at companies trying to change their customer experience through advertising efforts (JP Morgan Chase, Circuit City, and John Hancock) it was great to see that JetBlue was engaging its employees in its Happy Jetting efforts. I also wrote about how Ford is starting to view employees as potential brand ambassadors
  • Forrester’s 2007 Customer Experience Rankings. We used responses from nearly 5,000 consumers to rate the customer experience of 112 US firms. Our customer experience index (CxPi) examined three areas:meeting customer needs, being easy to work with, and being enjoyable. The three organizations with the highest CxPi were Costco, Borders, and Barnes & Nobles. The bottom three: Charter Communications, Medicaid, and Cablevision.  
  • Amex CEO Gains Insights From Napoleon. Kenneth Chenault, Amex CEO, used a quote from Napoleon that I really liked: “The role of the leader is to define reality and give hope.” This gave me an opportunity to discuss key leadership attributes: Deal with the reality of the world, engage your employees, provide a clear vision, and maintain a sense of purpose. While I’m discussing quotes, I really liked this one from Mackey McDonald, Chairman of VF Corp: “We realized we didn’t have to come up with brilliant ideas – we needed brilliant ways of executing good ideas.” 
  • Mashup: Halloween + Red Sox + CxP. This was a unique opportunity for me to combine three of my favorite things: my family, Red Sox, and customer experience. We had a great interaction with Jason Varitek on Halloween that ended up with my kids getting his autograph. You can see where he signed my son’s World Series ticket in this post. In another mashup of my interests, I my posted about how The Colorado Rockies Embraces Its Guests.
  • The Best Of CxP Matters: Volume #1Volume #2, and Volume #3. It’s amazing how quickly time (and many blog posts) just flies by. That’s why I’ve been writing “The Best Of Customer Experience Matters” to summarize every 50 posts; they also give me a reason to reflect on what I’ve written. So I decided to bundle all three of these as one of my favorites. 

In case you’re interested, here are the 10 posts that have been read the most:

  1. Experience-Based Differentiation
  2. My Manifesto: Great Customer Experience is free
  3. Forrester’s 2007 Customer Experience Rankings
  4. USAA: A Positive Example Of Customer Experience
  5. Trend Watch #5: Trendwatch.com “8 Important consumer trends for 2008”
  6. Webkinz: An example of a disruptive customer experience strategy
  7. Five Disruptive Customer Experience Strategies
  8. Are you listening to the voice of the customer?
  9. Apple’s Truly Genius Service
  10. Trend Watch #4: Business Week “Innovation Predictions 2008″

The bottom line: If you’d like to celebrate this anniversary, send a link to this blog to five of your friends.

Learning From The Good Fortune Advice Of Others

Fortune Magazine asked 25 accomplished people about the best advice that they were ever given; it’s worth reading. I picked out 8 pieces of advice that I thought were particularly relevant to customer experience efforts. Here they are, with my comments:

  1. Focus on those things you do better than others.”
    Peter G. Peterson, Co-founder and Senior Chairman, Blackstone Group
    My take: You need to understand what makes your company special in the eyes of your customers; and it should show up in everything you do and every decision that you make. This fundamental premise is captured really well in a couple of older Harvard Business Review articles (that later became books): The Core Competence of the Corporation and  Customer Intimacy and Other Value Disciplines.
  2. Good story, but it’s hard to look smart with bad numbers.”
    Mark Hurd, Chairman and CEO, Hewlett-Packard
    My take: It’s hard to convince business leaders to make an investment in customer experience if you use bad or superficial numbers in your analysis. So spend time with the finance department and other internal financial analysts to make sure your business case is solid.
  3. Whatever anybody says or does, assume positive intent.”
    Indra Nooyi, Chairman and CEO, Pepsico
    My take: It’s official; I’m joining the Indra Nooyi fan club. This Fortune article and her description in Time Magazine shows that she has a great sense of leadership. All too often, burdensome processes are put in place to keep customers from defrauding the company or to keep employees “in line.” Using Nooyi’s advice, you can simplify many processes by assuming that most customers are honest and that most employees want to do what’s right.
  4. If I waited for you to turn, you and the defensive player would have an equal chance to get the ball. Your opportunity is gone.”
    Eddie Lampert, Chairman and CEO, ESL Investments; Chairman, Sears Holdings
    My take: You need to think several steps ahead, like a chess player, in every strategy that you are considering; factoring in the response by customers and by competitors.  This reminds me of a quote from Wayne Gretsky when he was asked what made him a great hockey player: “Other people skate to where the puck is, and I skate to where it is going to be.”
  5. To thine own self be true.”
    Bob Iger, President and CEO, Walt Disney
    My take: This is a key message at a personal level, but it also has meaning for companies. Organizations need to continually foster their key purpose, or they will lose site of who they are. That’s clearly part of the problem that Starbucks is facing today. This advice is also useful when thinking about your marketing efforts; don’ t try and portray your company as something it’s not; that’ll just lead to empty promises.
  6. Get sales up, and keep expenses down.”
    Nelson Peltz, CEO, Trian Fund Management
    My take: Promoting customer experience for the sake of customer experience is not a sustainable approach.  At the end of the day, you need to make the clear economic case that customer experience efforts will improve business results. If not, they’ll get displaced by other initiatives that have a clear economic benefit.
  7. Spend a ton of time with your customers. Especially when you’re new, the first thing you should do is go out to customers and ask them how you compare with competitors, how your service is, what they think of your products.”
    Charlene Begley, President and CEO, GE Enterprise Solutions
    My take: There’s nothing more powerful or aligning than clearly hearing the voice of the customer. All too often people put their own spin on what customers need or want, so it’s important that you hear what customers are saying in their own voices. But don’t listen though a starry-eyed lens, make sure you hear the reality of the situation. As I learned from Jack Welch: “Deal with the world as it is, not how you’d like it to be.”
  8. Have a point of view about the future that focuses on the customer.”
    Alan Mulally, President and CEO, Ford Motor Company
    My take: While companies often have visions, many aren’t in the right form. Start with a picture of where your customers will be and make sure that your vision is described through their eyes. If you can’t articulate what customers you’ll serve and describe what they’ll want, then you can’t hope for anything more than an empty vision.

The bottom line: When it comes to good advice, borrowing is a virtue.

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