Lessons from REI: Aligning your People

We have just completed one of the busiest weeks in retail in the United States, with Black Friday for the physical stores and Cyber Monday for the online retailers. This week now blends together with doorbuster deals bombarding us constantly online and instore in the week leading up to Thanksgiving as well as weekend afterwards.

What is different this year is that some major stores have decided to stay closed during this period. In the land of the consumer this a really big deal!

One chain in particular stands out, REI, the outdoor recreation retailer with more than 12,000 employees and 140 stores around the US decided to close this past Black Friday. See below, their CEO, Jerry Stritzke’s 30 second announcement:


“We believe that being outside makes our lives better. And Black Friday is the perfect time to remind ourselves of this essential truth.” – REI CEO, Jerry Stritzke

So what is behind this decision? I believe it is to better align REI’s core values with its actions in the market. REI’s core mission is “to inspire, educate and outfit for a lifetime of outdoor adventure and stewardship.”

What better way to live that mission and align all of their people around it than closing on a day that allows their own people get outside and live the company’s mission.

Now that all sounds great but how does that help their customers? No doubt some customers may be inconvenienced by their physical stores being closed. However they will still have a small number of staff manning their website so they are not completely close for business.

REI are reacting to growing concerns by their customers and others that retail in general is overshadowing the core purpose of thanksgiving which is to celebrate with family and friends. They are betting that this decision will pay off over the longer term by aligning their people with their mission while also meeting the changing expectations of their customers.

Ultimately if you want your people and customers to really buy-in to what your company is about you must walk the talk, for me this is strategic alignment in action!

Interested in what it takes to be truly customer centric? Learn more here

Customer Experience is a Team Sport – How a no tipping policy is changing the New York dining world


Tipping in restaurants has always been a strange experience for me, being an Australian who has spent the last decade in the US. In Australia it is optional while in the US it is mandatory.

So it came as a huge surprise to learn that a very successful restaurant owner, Danny Meyer, in New York was going to change things in a big way by introducing a “no tipping” policy at his restaurants. Now these are not just run of the mill restaurants, they are some of the most successful in the hyper competitive Manhattan dining scene. Take the Modern for example, which was just elevated to 2 Stars by Michelin for 2016.

What can we learn about this significant policy move by Danny Meyer? Well in his words:

“We believe hospitality is a team sport, and that it takes an entire team to provide you with the experiences you have come to expect from us.”

Danny goes on to describe the crucial role all members of the team have in executing a brilliant customer experience. However, due to regulations on how tips are distributed not all members of the team are able to share in the generosity of guests. The bottom line was the way the rewards of success were being distributed had become unfair and had to change.

Now Danny did not arrive at this decision on his own, he solicited feedback from people across his organization. They discussed and debated it internally and once they gained alignment decided they would make it happen.

Think about your own experiences at a restaurant. How you feel about your experience is impacted not only by the server, but by whether the dishes and glasses are clean, whether the food is prepared just right, how you are greeted when you enter. Everything matters as each element can make or break your experience.

By raising the wages of employees that are behind the scenes and providing consistent wages to the front line servers (who often have customers that short change them on their tip), Danny aims to create a higher level of engagement and team orientation.

What will happen to the prices at their restaurants? They will go up to cover the existing tip percentage, so customers will effectively not pay more and will not have the pressure to decide how much to tip. Instead they can relax and just enjoy the experience.

Time will tell if this bold decision works for Danny and his Union Square Hospitality Group. I for one am betting it will and look forward to visiting the Modern next time I am in New York!

For more ideas on how to create a customer centric culture check out our award winning book, The Customer Culture Imperative.

How do you get employees to care about customers?


This is a question I often hear from leaders of large companies that want to create customer centered organizations.

It is one of the key challenges of becoming customer centric.  Here are a couple of ideas that we have seen work well.

Recalling your own Personal Customer Experiences

Given we are all customers of someone, at some stage in our lives, we can all recall having a great customer experience or a really bad customer experience.

We run an exercise with leaders and employees of our clients that is a really effective way to build empathy which hopefully leads to compassion for customers.

We ask them to recall the best or worst experience that have had and to break down the elements that made up that experience, why did it stick with them?

More often than not this experience brings back strong emotions, participants get excited or even angry recalling their experiences.

At the end of the exercise we ask participants, has your organization created any of those really great or really poor experiences? Most people will admit yes so the question is why do we as an organization allow those poor experiences to happen when we know how powerful the positive experiences can be?

As you can imagine this fosters great discussion and engages people emotionally and intellectually in firstly understanding why it happens and then what to do about it.

How can we help you

Creating a Service Mindset

Ultimately everyone in an organization is there to help others get their jobs done as well as their own, it is this combination and collaboration of people that creates compelling value. Think about companies like Apple and Amazon where smart teams of people work incredibly hard together to bring their products and services to life for millions of customers.

Building a service mindset helps all employees think about how they can help other parts of the organization be successful so that they can all win in the marketplace. A service mindset requires all employees to think about the impact of their decisions and work not only on customers but other teams across the organization.

Hear from Customers Directly

A key challenge in large organizations is the distance many leaders and employees have between them and direct customer feedback. There is nothing more powerful than hearing directly from customers. It is simply not the same to hear something second hand as it is usually devoid of emotion and context.

As a result another exercise we encourage is having leaders and employees hear directly from customers in open forums or focus groups. The goal is to not just get information or new insights but to gain a sense of how customers really perceive the organization and their top of mind issues. More often than not participants gain valuable new insights into how customers really think about their organizations.

Give people permission to care about customers and then expect it

It sounds strange but in many organizations customers are an afterthought. People are not encouraged to really think about customers in their decision making processes. There are limited rewards or recognition for people that go the extra mile for customers and as a result there is limited upside or downside.

The result is a lack of real passion for customers outside of a small number of salespeople who live and breath customers as their personal livelihood. We know however that this is simply not enough. Customer passion must be pervasive across the organization for both the customer and the company to benefit.

Leaders can give people permission to care about customers by demonstrating that they care through their actions. Then over time they need to expect employees to care and simply not tolerate bad customer experiences.

A great story comes from the NRMA in Australia (similar to AAA in the US), the leadership gave their employees permission by suggesting they could:

“Break all the rules for the customer”

One of NRMA’s services is roadside assistance. They have many great stories of NRMA staff going the extra mile for customers when they are at their most vulnerable, i.e. stranded with their broken down car. One emergency roadside assistance employee even dropped a customer’s groceries to their home so they would not spoil!

What else can you do to ensure employees act in the best interests of customers as well as the business?

78 Years of Customer’s Trust Destroyed in an Instant


Source: The Economist

One of the most dramatic instances of breaking a promise to customers came during this past week as VW admitted to deliberately misleading regulators and customers about its car exhaust emissions.

More than 11 million vehicles had been fitted with software designed to trick emissions testers. What the hell were they thinking? Clearly not what we see from customer centric organizations that live by the motto – “What’s best for the customer is best for the business”.

If that one phrase had been part of the culture at VW it might have stopped what has turned out to be a multi-billion dollar problem. According to the Economist  they have set aside more than $7bn to resolve the issue.

This massive betrayal is not only going to impact customers but employees around the world will lose their jobs through no fault of their own. No doubt it will be a massive blow to the morale of those employees still left.

When companies align their interests with those of their customers both profit, surely it is the only way to conduct business in the future?


What does Customer Centric Leadership look like?

There is plenty of research and anecdotal evidence that tells us if customers believe “we care” about what we sell them, how we serve them and the relationships we create with them, they will remain loyal advocates of our company. This also applies to the “care” senior leaders show to their staff and partners.

This is no better illustrated than by Howard Schultz, CEO of Starbucks. In the immediate wake of the stock market turmoil around the world on 24th and 25th August, Schultz sent a letter to all his 190,000 staff and partners. As well as assuring them of Starbuck’s continued growth plans despite the stock market volatility and sending his appreciation of their efforts in making Starbucks the number one coffee company worldwide he urged them to think of how their customers might be feeling in relation to this immediate uncertainty He encouraged them to show special care to their customers as follows:

“Our customers are likely to experience an increased level of anxiety and concern. Please recognize this and–as you always have–remember that our success is not an entitlement, but something we need to earn, every day. Let’s be very sensitive to the pressures our customers may be feeling, and do everything we can to individually and collectively exceed their expectations.”

Source: http://www.inc.com/justin-bariso/starbucks-ceo-sent-an-extraordinary-email-to-employees-due-to-the-stock-market-c.html

By being attuned to customer concerns in their everyday lives Schultz was able to translate this stock market event into a communication to staff and on to Starbucks customers that he and they care.

This is a great example of customer-centric leadership. It costs you nothing, but adds to the customer experience in a way that connects emotionally and creates loyal customers as advocates.

Empowering Employees to do the right thing for customers


When we measure the customer-centric culture of organizations around the world, one of the recurring themes is a low score on “empowerment”.

Lack of empowerment – real or perceived – has a huge impact on the ability of frontline staff to solve a customer’s problem. It also has a big impact on costs and is seen in many ways – duplication of work, mixed messages to customers, bottlenecks and slowdowns in customer service, and new product introductions – just to name a few.

For frontline staff to be empowered to solve customer problems or rapidly respond to customers’ requests a business needs a culture that encourages staff to be accountable for ensuring a solution for the customer is delivered. They need to have the confidence to make a decision that is right for the customer without fear of retribution from their managers if it seems to cost the business money. If they can’t fix it themselves they need to be confident that those who are alerted to the issue will fix it for the customer quickly.

A great example of this is seen in the hospitality industry. Chateau Elan, a boutique resort hotel with a property each in the United States and Australia has created an empowered culture in which a customer can ask any member of staff to do something for them – book a restaurant or a cab or get extra towels in their room. The immediate response by the hotel employee is “consider it done!”

This is an emphatic promise to the customer that it will be done. Not only does it give confidence to the customer but it empowers staff to collaborate and ensure the customer is satisfied.

How do you go about creating a customer culture of empowerment in your business?

What sport can teach us about customer centricity


Sporting clubs refer to their customers as fans. This is an appropriate term because “fan” is shortened from “fanatic”. Successful sporting teams have fanatical supporters who are typically lifelong supporters of their sporting club and team.

Take the Seattle Seahawks, a professional American football franchise playing in the National Football League (NFL). Seahawks fans have been referred to collectively as the “12th Man” representing such a supportive force for their team that it is like having an extra man on the field. The Seahawks’ fans have twice set the Guinness World Record for the loudest crowd noise at a sporting event, first on September 15, 2013, registering 136.6 decibels during a home game and again on December 2, 2013, during a night home game with a then record-setting 137.6 decibels. This has occurred, in part, by customer-centric design because their new home stadium was purpose built so that fans would be closer to the field of play than in other stadiums and could urge their team on with such noisy enthusiasm that the opposing team could not hear the “plays” being called. This was a competitive advantage that resulted in almost all home games being won by the Seahawks in the last couple of years.

In 2014, the Seahawks won their first Super Bowl Championship, defeating Denver 43-8. More than 600,000 people turned up for the post match celebration in Seattle – about the number of its total population. The following season, Seattle advanced to Super Bowl XLIX, their second consecutive Super Bowl, but they were narrowly beaten by the New England Patriots by a score of 28-24. This kind of fan support is planned and nurtured by the Seahawks senior leadership, management, coaches and players with a special stand in the stadium named as the 12th Man, special events for fans and online connection that is devoted to engaging fans with the team and the club. This type of support occurs because the fans are at the center of thinking and decision-making.

Imagine if your customers were like the Seahawks fans – vocal, loyal advocates that are fans for life. How would that affect your bottom line? How would it affect your staff engagement? The answer is obvious – it would affect both very positively and create sustainable profitable growth.

But to do it you must have a customer-centric culture that focuses on creating superior value for your customers and puts long term customer relationships ahead of short term profit. Like in successful sporting franchises, everyone in your business has a vital role to play in creating and delivering value for your customers. You can find out more on how to do it in the The Customer Culture Imperativejudged the best marketing book 2015.