Category Archives: Employee Engagement

How a customer culture frees employees

Symbol of Freedom

There is a great quote in the book I am reading at the moment, The $100 Startup  by Chris Guillebeau that goes something like:

“The quest for freedom comes from pursuing value for others.”

The more value we can create for our customers the greater our financial and personal freedom to choose what we want to do in life.

How does building a “customer culture” relate to this idea?

When we work in an environment with certain norms of behavior and expectations we generally conform to these. It is a form of social pressure that drives group behavior. If you happen to be lucky enough to work in a company that promotes a customer focus you will be exposed to some awesome things.

You will see how the best business people in the world develop a deep understanding of their customers. You will be exposed to their ways of thinking, their processes and how they lead around this important idea. That exposure will help you to build your own customer focus skills.

As you develop your own skills you will increasingly be able to provide more value to your customers, colleagues and to the business you work in. You will spend your time creating real value rather than on activities poorly aligned with customer needs and result in wasted effort, resources and destroy motivation.

Freedom follows this success and employees are free to work on ever bigger and bolder challenges. So what company would you rather work in? One inspired by how to change the lives of customers for the better or a lesser alternative?

Why most companies don’t deliver great customer experiences

Poor Customer ExperiencesWe are all customers and we know what a great customer experiences feels like. We also know that a great customer experience influences our behavior, we want to talk about it with friends and we feel good about doing business with the company that provided it.

We know all this and yet we see time and again examples of poor experiences, just like this Range Rover customer above taking revenge on the company that clearly did not create the right car ownership experience. Why does this happen?

In our work with clients we have found a number of key reasons:

1. Culture – culture drives everything in an organization.  It creates the expectations for how employees behave. It can be left to chance or actively managed. The culture develops not from what people say is important and valued but by what is visibly shown to be important through the way people behave.

For example many companies say that customers are important but then will make decisions that will directly disadvantage the customer in the interests of the business. Bank fee increases, hidden charges, confusing pricing models are great examples of companies trying increase profits without providing customers with any more value.

This is usually the result of short term profit pressures. The message: customers are important until we need to make our numbers – then all bets are off!

2. Goaling – what’s measured gets done. The metrics a business uses will drive behavior, if none of those metrics include measures that are important to customers, people will not focus on the impact they are having on customers.

3. Hiring – hire people that buy into the company’s mission and actually want to add value and contribute to delivering on it. Specifically put hiring practices in place that filter out those that can’t connect their work with customers. Test potential employee’s mindsets, do they have customer friendly skills like the ability to listen, accept feedback, empathize with other people’s positions.

4. Silos – silos can be great, they drive efficiency and specialize expertise but when they become too competitive and an “us and them” mentally develops collaboration is crushed and customers will suffer.

So what do companies with strong customer experiences do right?

Improving the customer experience is about changing a company’s culture.

Companies that can achieve a customer culture take improving the customer experience as seriously as improving financial outcomes.

Our studies of organizations around the globe that have built strong customer cultures have revealed some major themes:

Strong and visible leadership

Leaders are not only committed to the customer experience but also able to instill that commitment in the rest of the organization. There are usually two primary  leaders involved in the process – a CEO or business unit leader who sets the vision and a head of strategy or customer experience who helps execute the strategy. In addition a guiding coalition or customer engagement council that brings in representatives of the broader leadership team it established to oversee progress.

These leaders commit to changing the way they do things in a way that sends the right message to the organization – that customers are important.

A clear mission, vision, and values

A clear purpose beyond “profitable growth”, one that actually does inspire and connect with people emotionally and is contextualized in a customer frame is crucial. This should drive a clear set of behavior standards that capture the intent of the organization and create accountability for customer service and the customer experience among staff members. Amazon’s mantra is “save customers money” and it drives everything (more on this here)

These are not just words on a page. Rather, companies must reinforce these beliefs and behaviors at employee inductions, coffee talks  and the regular team meetings. Companies should use real customer examples to ensure that the mission, vision, and standards resonate throughout the organization.

Customer Immersion

In larger organizations people get disconnected from customers, they lose site of the value being created and what its actually like to be a customer. A process of regular customer immersion sessions helps executives and employees regain that connection. This may include call center sessions, customer visits, bringing customers into internal planning sessions and so on.

Consistent Communication

All messages should incorporate customer focused elements so that managers and staff see the customer experience as a strategic objective that is as important as other financial outcomes. It’s essential that companies consistently communicate what constitutes the right customer experience not only in the strategic plan but also in job descriptions and performance evaluations.

Buy-in from all staff

Defining the reasons for the change and the personal value of being involved in a customer culture change initiative is crucially important. All staff need to understand the reason for the shift in focus and how it will benefit both customers and the business. Staff then ultimately need to see it is in their own self interest to change the way they go about their work.

A way to measure culture change

External and internal measures can be used to assess whether a company is actually changing, the image below shows the relationship between the internal measure of “Customer Culture” relates to the external measure of customer satisfaction and ultimately profit growth.

Customer Culture Foundation Pyramid

A customer culture can be measured using the Market Responsiveness Index which allows companies to see the progress they are making against a benchmark of companies around the world.

A message to leaders

Improving the customer experience is about changing a company’s culture. This change is the most powerful, legacy-defining step a leader can take to improve the performance of a business and the engagement of employees. Senior executives must not only take responsibility to make the customer experience a priority but also must allocate the necessary time and resources to make it a reality.

While there is work involved, it does not necessarily need to be expensive and the payoffs are enormous.  Show me any massively successful company in almost any industry and 8 out of 10 times they have a strong foundation based on a customer culture.

4 ways customer centric leaders demonstrate they care

Customer Centric CEOs

It is a well known fact in the marketing world that many customers decide to do business with other organizations simply because they believed the company did not care about their business. It’s a feeling, not a product characteristic or benefit deficiency that can often drive customers away. On a purely rationale level it makes no sense, they got what they paid for, why not continue doing business with the same company?

This same concept undoubtedly applies to the leadership of customer centric organizations. Leaders that really care about their employees and their customers demonstrate this through their actions.

Some great lessons come from Rick Silva, the CEO of a quick service restaurant chain called Checkers and Rally. Based primarily on the East Coast and South of the United States the chain first came to my attention through the show “Undercover Boss”.

CEO of Checkers and Rally's rick silva in "Undercover Boss"

Lesson 1: DEMONSTRATE you actually CARE.

“People are our most important asset” is a cliche often used by many leaders but it is not usually followed up with specifics. If people are your most important asset what are you doing to demonstrate that? What culture have you created, are people respected for the value they bring? Is collaboration seen as an important capability that is role modelled from the top?

Rick Silva was undercover at one of his 200 restaurants when he observed the manager of the store barking orders at staff, the environment was tense, one based on fear rather than hope. Rick could tell pretty quickly the culture in that store was toxic. He decided to shut the store down then and there.

Lesson 2: If its NOT GOOD ENOUGH for CUSTOMERs stop doing it and GET IT RIGHT!

The other side of the story is the impact on customers, Rick could see the results first hand of a poor store environment. In his case this meant slow service, poor quality food and lack luster customer interactions. Basically in the quick service restaurant business if staff don’t want to be there eventually customers won’t want to be there either.

Lesson 3: Give your employees WHAT THEY NEED TO BE SUCCESSFUL.

The next day Rick visited a new store, one with a high energy customer focused manager. She would go out of her way to make sure customers were happy but was hamstrung by something as simple as an intercom system that actually worked. It was almost impossible to hear the orders from customers on the intercom, something Rick experienced first hand while working to drive through ordering system.

Lesson 4: PEOPLE WANT TO BE HEARD.

Be brave enough to solicit and act on feedback. Many leaders are afraid to get honest feedback from employees, they don’t want to open a “can of worms” or distract them from their work. The reality is employees want to be heard by their leadership. Our company conducts many internal surveys and interviews as part of our consulting practice and it is amazing to see the participation rates and length of open ended responses we often receive.

Rick Silva in “Undercover Boss” was told by one of his employees that staff on the shop floor should participate and be rewarded for a job well done in the same way managers were recognized. Rick listened, recognized that the need made sense for employees and the business and took action to build an incentive program for all employees.

Are you willing to listen and take action?

“Culture is not the most important thing, it’s the only thing” – Costco’s Jim Sinegal

The Costco Experience

Customers walk in to buy six months worth of toilet paper and walk out with the latest flat screen TV and a case of French Champagne.

Where else would this type of consumer behavior be possible but at Costco, the US’s most successful warehouse club/retailer.

Costco has an interesting mix of customers, it tends to attract more affluent customers in as great a volume as lower income customers. It is very selective about the products it chooses and is always varying the merchandise on offer.

Customers tend to shop their regularly and come back for that intangible feeling that is created by the store’s atmosphere. It is always busy, goods are stacked in large warehouse style pallets, there is a “racetrack” style circuit that shoppers are guided through which means that get to see virtually everything on offer each visit.

Why is Costco successful?

One of the key reasons is Costco’s ability  to allay all the fears consumers have when making purchase decisions:

1. Will I get the right product for my needs?

2. Will I get the best price available?

3. Will the product be high quality

Costco takes the risk out of purchasing by having one of the most generous product return policies on the planet, I recall seeing a women return a vacuum cleaner that was at least 5 years old and considerably used. She was refunded – no questions asked.

Costco’s pricing is always tracking pricing of their competition both online and offline and driving hard bargains with suppliers to make sure they are super competitive. They mark up their products by 15% so if they buy at the right price that sales price will always be very competitive.

Costco carries well know often premium brands (they even sold Apple products for a time), their own Kirkland brand has built a reputation as a high quality store brand that reinforces Costco’s value leadership position (great quality/great price)

This strategy puts customers at ease, confident they will be getting great value on high quality products.

Another part of the strategy is to sell in bulk which means consumers buy more than they usually would of particular products. When consumers see the pricing they can get per unit on bulk purchases they can’t resist.

A powerful customer focused culture.

Jim Sinegal, Costco’s former CEO, in a recent CNBC documentary on the “Costco Craze” described the secret of Costco’s success was its culture. Jim has created a culture where there are no divisions between leadership and staff, everyone is on the same page when it comes to understanding Costco’s customers and what makes their model work. Every employee knows their role in creating the right environment for customer’s to have the “Costco experience”. Employees are paid fair wages (higher than competitors) that reflect their importance in contributing to the customer experience.

As CEO he is constantly on the move visiting Costco’s 580 stores across 9 countries every year, getting direct feedback from customers and his employees as to what’s working and what is not. Remember this is a $89 billion business.

How many CEOs set that tone for their organizations?

See more on the CNBC documentary below:

Inside the Box: What’s the secret to Costco’s success?

What is the purpose of business?

What's the purpose of business?

Ask anyone this question and you will get a variety of answers, the most common being to make a profit. While certainly to make a profit is a requirement I don’t believe it is a business’s reason for being.

Most businesses start out with a problem that needs solving. This problem is one usually experienced by many others. The business develops services and products to solve this problem better than any alternative and WHAMO it has something that people will pay for!

Unfortunately what happens over time is the focus of the business becomes the profit it generates rather than the problems it solves for customers. This often results in short term profit maximization at the expense of customers rather than for their benefit.

The outcome of this short term profit focus often results in toxic cultures where internal groups work against one another rather than for the benefit of the entire organization. The original purpose of the business is lost and employees become disconnected.

By realigning the business with its customers and rallying around a single focus, maximizing outcomes for customers, businesses can find their way again and produce even larger profits.

Remember profit is the RESULT of creating the best possible outcomes for your customers not the other way around.

If you want to create this type of culture in your company, take the Market Responsiveness Index and find out where you stand today.

Employee engagement is simply not enough

Engaged Employee

Employee engagement is an important measure for many organizations. It does provide an indicator as to whether employees are willing to go the extra mile in their work, something that is only driven by passion and meaning in what you do.

However, in today’s business environment it is not enough.

Why? Customers don’t really care how engaged you are in your work unless your are providing them with something valuable.

It reminds me of a trip I took to Paris years ago. My wife an I decided to catch a train from the Gare de Lyon to the south of France and I needed some help to get on the right train. Recognizing an information center, I walked in to find it empty apart from 3 staff at the counter.

Now my french is not as good as it should be (having a French mother!) but I could understand that the 3 staff were passionately discussing their weekend. This went on for about 3 or 4 minutes while I stood patiently infront of them. When there was finally a break in the conversation I tried to get their attention. One of the employees finally begrudging came to answer my questions. Ironically she refused to speak English so I was forced to muddle my way in French to finally get the answers I needed. It reminded me of the quote:

“This job would be perfect if I just didn’t have to deal with customers”

Now I recognize the french have some of the lowest scores for customer satisfaction in the world but my point here is that these employees were fully engaged in their work, no question they seemed very happy to be there. However they had not connected their work with their real reason for being there, to serve customers.

I am not against employee engagement but the goal needs to be higher than that. Employee engagement must intersect with customer engagement for it to be a worthwhile initiative.

The link between customer focus and employee engagement

Employee Engagement and Customer Focus

Customer focus and employee engagement are two sides of the same coin.

Clearly if your customers are going to be satisfied it takes an engaged workforce that is passionate about their work and holds a strong desire to deliver great experiences.

What we have found to also be true however is that employees become disengaged when they lose meaning in their work. This meaning can only come from recognition and acknowledgment from customers (whether internal or external).

In our work with our clients we have found when increases in customer focus occur (measured with our MRI tool) this is followed by increases in employee engagement (measured with the Gallup Q12 tool).

It is the result of getting on the same page as to the purpose of the business, namely creating customers and the personal satisfaction that comes from doing valued work.

What has your experience been? Does customer focus and employee engagement run in tandem in your company?