Category Archives: Strategic Alignment

This is why many business leaders waste half their effort and don’t even know it!

Posted on November 28, 2017 by | Leave a comment

There is an old adage in advertising that says: “I know that half my advertising is wasted, but I don’t know which half”. In many cases, we know that all of it is wasted.

So it is with strategy and culture. Most senior business leaders spend considerable time on strategy – and rightly so. We do need to know where we are trying to go. But much less time – and sometimes virtually none – is devoted the other “half”: culture.

Some pundits believe “culture eats strategy for breakfast”. But that is beside the point. Business leaders need strength in both or at least half their effort will be wasted – and sometimes all of it. The strategy sets the direction and culture delivers (either well or poorly) the value of the strategy to the marketplace.

Our experience in many organizations across the globe is that the biggest missing piece is a customer-centric culture that is aligned with a customer-centric strategy. Repeatedly we find a lack of alignment between the stated strategy and what people are doing. Also, we see, more frequently, strategies that attempt to address and create customer value but the culture is not aligned with delivering to meet customer needs and desired customer experiences.

Aligning Customer Strategy and Culture

Aligning customer strategy and culture

You just need to see the disruption occurring in so many industries and almost from observation you can predict impending corporate collapse. Which retailers will survive? Which health services will prosper? It will be only those that develop a strategy centered on customer value and experience with a customer-centric culture across the entire organization that has the capabilities to deliver it.

If you have a question about the adequacy of your culture and believe you are not in the right-hand top box in the diagram, you should start by measuring it and benchmarking where you stand against the world’s best customer-centric companies. To discover the next steps on what you need to do, have a look at the groundbreaking book: The Customer Culture Imperative.

AND if you want to build this capability in your organization check out our MarketCulture Academy.

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Posted in Customer Centric Culture, Customer Centric Strategy, Customer-Centricity, Strategic Alignment

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What happens when you don’t have a corporate culture obsessed with customers – Lessons from United

Posted on April 11, 2017 by | Leave a comment
united_man_removed

A man is forcibly removed after not giving up is pre-paid seat on a United Flight

We witnessed one of the most extreme examples of what can go wrong in a business that has truly lost sight of its purpose.

As a former United Global Services member (United’s top tier for frequent fliers) I was appalled at how badly United handled a relative routine situation that probably happens multiple times a day in various cities across the US. What on first pass looked like the removal of a potential terrorist happened to be a paying passenger who was also practicing physician.

United sometimes over sells airline tickets in order to make sure they fill their flights and remain profitable. I am not against this practice, it makes business sense. However when this impacts customers, (and it inevitably will) this becomes a true test of an organization’s customer centric culture. Will it do what’s best for the customer? (A customer centric view) or will it protect a short term myopic view of its profits for that particular flight (a transactional view).

In this case United choose its policy and procedures over doing the right thing for its customers. Clearly there was an upper limit on what was available to be offered to make this situation right for their customers. United claims they offered $1000 to passengers to take another flight so that crew members for another flight could board to go to another plane – there were no takers. Instead of upping the compensation to a point that passengers felt like it was a fair deal, they decided to pick passengers based on their frequent flier status and other connecting flights. Three left peacefully although clearly unhappy and one refused resulting in the social media and traditional media storm that came after a video showed the passenger being forcefully removed.

Company Centric CEO Reaction – Oscar Munoz

Those of us that work in the culture space know that the CEO and top team set the tone and shape organizational culture.

Oscar’s initial response was to apologize for having to “re-accommodate these customers”. While externally he made attempts to diffuse the anger at the situation internally he sent a memo to employees that defended the crew’s actions, calling the passenger ‘disruptive and belligerent’ and praising his staff for going ‘above and beyond‘.

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I understand he wants to stand behind his employees, support them and not throw them under the bus for this incident but really he was trying to “protect” the company and the United Brand. This message also reinforces poorly thought out policies that do not get to the heart of what great companies do – they have a culture that puts the customer first.

Finally, two days later Mr Munoz has accepted responsibility for the disgraceful incident:

“I continue to be disturbed by what happened on this flight, and I deeply apologize to the customer forcibly removed and to all the customers aboard………. “No one should ever be mistreated this way.”

A colleague of mine recently relaid an experience he had in a very similar situation on an Emirates flight. He said they just kept increasing the enticement to get of the plane. Eventually enough people took up the offer. They ended up giving away 2 business class return tickets from Australia to Dubai  as well as accommodation plus $US600.

This price was small compared to what United will now go through…..

United takes a $255 million dollar bath.

The value of United has fallen by $255 million as a result of this one incident and the bad press and social media storm surrounding it. How much were they offering passengers to deplane again?

Eric Schiffer, CEO of Reputation Management Consultants, termed United’s handling of the incident “brand suicide.”

“When you go onto a United flight, you shouldn’t have to be concerned there will be blood or you will get slammed in the face,” Schiffer said. “I think you will see an effect on sales from those who are disgusted by the gruesome action. And it’s catastrophic for a brand’s trust.”

No doubt United will lose customers and it deserves to, what comes next is a question of leadership and culture.

If all employees have a customer centric mindset and are empowered to do what is right by the customer this would not have happened.

That’s what we do at MarketCulture. We help companies understand the importance of putting the customer at the centre of the organization – a mindset that establishes the idea that “What’s best for the customer is best for the business”

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Posted in Case Study, CEOs, Customer Centric Culture, Customer Centric Leadership, Customer Centric Values, Customer Experience, Customer-Centricity, Market Culture Inaction, Strategic Alignment, Trust

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Who is the world’s best performing team?

Posted on March 27, 2016 by | 1 comment

All_Blacks_Haka

When All Blacks coach, Graham Henry (later knighted for his services to rugby), took over as coach in 2004 he realized there was a need to change the culture of the organization – the players, coaching staff and administration. They needed to build in collaboration, resilience, innovation and good decision-making under pressure on and off the field. After a review, Henry and his wider team came to the view that “better people make better All Blacks”. He put together a team of support staff whose role was to help all the players not only with their fitness, diet, training and skills, but more importantly to build their character and attitudes as people leaders and understand their commitment to the team and to their fans in New Zealand and around the world.

Henry set about building a collaborative leadership team composed of the senior players and senior staff. These on-field and off-field teams knew their roles and responsibilities and worked as a total team to build a winning culture designed to continue the legacy of the great All Blacks teams of the past.

When the New Zealand All Blacks lost to the French in the quarter final of the Rugby World Cup in 2007 it was a shock to the players, coaches and 4 million New Zealanders – the entire population of the country. Henry realized there was more to do so he hired two outside consultants, one a psychologist, and both Black Belt karate experts, to develop a mental skills program to raise the ability of players to handle pressure on the rugby field. They educated the players on how the brain works and each player had triggers to help keep focused when under pressure and when unexpected things happened in the game. This added to their resilience as players and enabled them to handle extreme pressure in tight games and when things were turning against them.

“Better people make better All Blacks”

This program of development has continued and with consistency of players and coaching staff over time has created a consistent world beating team.

The All Blacks won the 2011 and 2015 Rugby World Cups and with a winning rate of higher than 90% over the last 10 years are regarded by many as the best performing team globally in any sport.

Questions to ponder in your business:

How well do your “on-field customer facing teams” and “off-field support teams” collaborate for the benefit of customers and the community?

How well do you support your leaders as “whole” people, not just in terms of skills, but also in terms of their attitudes and alignment of their personal values and priorities with your business’s mission and vision?

Focus on collaboratively creating and delivering superior value for customers is a galvanizing goal for all people in your business – when embedded as a culture it brings out the best in your people that benefits them, your customers and your business performance.

You can learn more in our best selling book, The Customer Culture Imperative.

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Posted in Collaboration, Strategic Alignment

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How to create a customer centric transformation – Lessons from Air New Zealand

Posted on February 10, 2016 by | Leave a comment

air_new_zealand_middle_earth_captains

A little more than a decade ago Air New Zealand posted the largest corporate loss in New Zealand corporate history. Inside 24 months it was turned around to a profit. Since that time it has been amongst the consistently highest profitability of full-service airlines around the world.

The catalyst for this change was Sir Ralph Norris, who was called in as CEO to transform the business. Sir Ralph’s customer-centric leadership and customer focused strategy was embodied in the mindset change from “we fly planes” to “we fly people”. He immediately engaged the top 800 leaders in Air NZ to think about, discuss and act on insights from customer feedback and observation that told them about what customers valued and what they hated about the flying experience.

His legacy, established over several years as CEO of the airline, has been continued by the current CEO, Christopher Luxon. You can see it when you fly with Air NZ – even the safety announcements are engaging as they feature some of New Zealand’s star rugby players, spectacular scenes of the country and references to some famous movies made in the country….

This is a testament to the sustained revenue and profit that can be generated by a culture and strategy embedded in the belief that “what’s best for the customer is best for the business.”

See The Customer Culture Imperative for a roadmap on how businesses like Air New Zealand have done it.

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Posted in Change Leadership, Customer Centric Culture, Customer Centric Leadership, Customer Experience, customer focus, Customer Insight, Customer-Centricity, Market Culture in Action, Strategic Alignment

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Lessons from REI: Aligning your People

Posted on November 30, 2015 by | Leave a comment

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

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Posted in Case Study, Customer Centric Culture, Customer Centric Leadership, Customer Centric Values, Customer Communications, Customer Insight, Customer-Centricity, Empathy, Freedom, Market Culture in Action, Strategic Alignment, Trust

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Why smashing hierarchy and driving collaboration is essential to customer experience

Posted on October 13, 2014 by | Leave a comment
Source: BRW Australia Photo: Nic Walker

Dr David Cooke, MD of Konica Minolta Australia.  
Source: BRW Australia Photo: Nic Walker

When Dr David Cooke was appointed managing director of Konica Minolta in Australia he was faced with a culture of strict hierarchy, strong silos and task oriented behavior.  He realized this was the first thing that had to change.

Why? Because the market for multifunction copiers and printers was changing. The market for these products was declining and the demand for outsourced solutions and services was emerging. The hardware was less important than it was in the past, customers just expected the devices to all work well and be built with high quality engineering. Quality products did not differentiate, customers wanted more, they wanted more sophisticated services and solutions to help them manage the costs of running their fleets and value add solutions that would streamline workflows and improve their operational effectiveness.

These new market conditions required a more flexible, agile and collaborative culture that focused on the changing customer needs if Konica Minolta was to thrive in the future. So his vision of KMA as the “company that cares” for its customers and its community was a means to differentiate KMA from its large competitors, promote a unified company view of improved service and value for customers and one that he felt his staff could buy in to.

His view was validated by a staff survey that benchmarked the level of customer-focused culture in the business by measuring market responsiveness on a 7 factor index. It showed that there was some work to do, but that staff were overwhelmingly ready for change, wanted transparency of information across the organization and expected the senior leadership to lead it and show the way.

David immediately looked for tangible initiatives that would demonstrate a unified company with increased collaboration and communication. In the first few months of his tenure he made the following changes:

  • the large corner office that was originally the haven of the previous managing directors was re-purposed as a “quiet lounge” for all staff
  • he moved into a glass fronted office next to the lunch room where he could wave or nod to his staff as they used this heavily used walk-way.
  • he replaced several of the functional heads with new leaders to strengthen the cultural change program and break down the silos
  • he increased transparency in the HR function by moving it from closed office walls to join others in the open plan office and appointed a new leader to facilitate the change program
  • he promoted an external focus by encouraging all staff to work for non-profit community organizations by enabling them to take days off to directly contribute

David’s approach to creating a less hierarchical structure, sharing of financial results and customer successes across the business is leading to more engaged staff, better customer service and growth in revenues at a time when overall market revenue is declining.

What’s the secret? Customer Focused Leadership – leaders that genuinely care about creating value for customers, the business and the communities that operate in.

If you want to build this capability in your organization check out our MarketCulture Academy.

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Posted in Customer Centric Leadership, Customer Experience, Customer Value, Customer-Centricity, Empathy, Market Culture in Action, Strategic Alignment, Trust

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How customer centric companies make service recovery a priority

Posted on February 14, 2013 by | Leave a comment

In the below video, Chris Zane of Zane’s cycles, probably the most customer centric bike store on the planet, tells the story of how they got things wrong.

Not only did they gets things wrong but on Valentine’s Day of all days!

We all get things wrong from time to time, what matters is how we handle things when we make a mistake. People that work for customer centric companies take ownership, take charge and make things right for the customer.

Is this how your team operates?

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Posted in Case Study, Customer Centric Culture, Customer Centric Leadership, Customer Centric Values, Customer Communications, Customer Satisfaction, Customer Service, Empathy, market culture, Market Culture in Action, Strategic Alignment

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Can Nokia regain its customers and former glory?

Posted on January 24, 2013 by | Leave a comment

nokia_reinvention

As Nokia’s new chief executive, Stephen Elop, took over in September 2010, he faced a formidable task: to regain the company’s lost ground in the smartphone segment of the global phone market, especially in the United States, while maintaining its worldwide dominance as the largest maker of mobile phones.

His biggest obstacle, according to Mr. Hakkarainen, a former manager responsible for marketing on the development team, as well as two other former employees and industry analysts, may well be Nokia’s stifling bureaucratic culture. In interviews, Mr. Hakkarainen and the other former employees depicted an organization so swollen by its early success that it grew complacent, slow and removed from consumer desires.

“Nokia in a sense is a victim of its own success,” said Jyrki Ali-Yrkko, an economist at the private Research Institute of the Finnish Economy. “It stayed with its playbook too long and didn’t change with the times. Now it’s time to make changes.”

Elop’s assessment of Nokia in February 2011:

“We fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.
“There is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.”
“The Shenzhen region of China is able to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally – taking share from us in emerging markets.”
“Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem.”
“We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven’t been delivering innovation fast enough. We’re not collaborating internally”

During the last 2 years Elop has swept away many layers of Nokia’s previous organisational structure. He has refocused the business on leadership (managers taking decisions and responsibility) and markets (innovation driven by people competing in key mobile phone segments). Decision-making has been delegated to local/national teams rather than relying on decisions by an overly-centralized senior management team. Goals and incentives for the senior leadership team are now more transparent. The new strategy brings clarity and a sense of direction to Nokia.

Nokia’s recently launched new 620, 820 and 920 Lumia Windows 8 smart phone range has succeeded in garnering generally positive reviews. It is changing the perception that the embattled company may yet regain its former glory as the world’s premier mobile phone maker says Ray Shaw who provides a review of the pros and cons of Nokia phones compared with its rivals.

But will this be enough? In order to survive and prosper against Apple and Samsung in the smartphone market, Nokia will need a customer-focused culture throughout its entire business (not just at the front end) to drive innovation and sustained growth and profitability. This requires embedded behavior change that goes beyond restructuring, beyond a refocused strategy and beyond decentralized decision making. It requires a completely new mindset where there is an understanding and belief, translated into behavior, that’s what is best for the customer is best for the business.

Imagine your business faces the challenges that Nokia faces. What would your priorities be?

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Posted in C-Level Quotes on MarketCulture, Cross-functional Collaboration, innovation, Market Culture Inaction, Silos, Strategic Alignment

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2 secrets of Salesforce.com’s success at attracting customers

Posted on January 17, 2013 by | Leave a comment

customerculture_at_salesforce

Jamie Greney, a long standing employee says “In my ten years at salesforce.com, I think one of the most important elements to our success has been the corporate culture. We’ve had a consistent vision regarding the end of software. Three of our top values have been trust, customer success, and innovation.”

Alyson Stone, another company employee says “Depending on how you look at it, resolving a customer’s problem is the beginning or the end of a journey. Companies who decide to put the customer at the center of all business strategies and activities are making a commitment to engagement, yes. But more than that they are making an assumption that each customer is a long-term investment with a high rate of return.”

It is clear that Salesforce’s customer culture is embedded in the business and has been central to its ongoing delivery of value to its growing customer base. Salesforce is on Fortune’s 2012 list of the 100 Best Companies to Work For ranked number 27.

In a report titled “Salesforce’s happy workforce”, David Kaplin describes what happens inside the company.

 “There are plenty of reasons Salesforce is cool to work for: its downtown San Francisco vibe, its matchless end-of-the-year revelry, its embedded philanthropy, and its idiosyncratic leader.”

He quotes Marc Benioff, the CEO, “We achieved our market position by being born cloud,” Benioff writes in his book titled Beyond the Cloud, “but we are being ‘reborn’ social … We need to transform the business conversation the same way Facebook and other social sites like Twitter have changed the consumer conversation and created incredible loyalty — and love.”

Kaplan reports that Salesforce’s new social-networking app, Chatter, functions much like a Facebook inside a company — and helps enhance office culture. Whether on a computer or mobile device, Chatter is dynamic and collaborative — e-mail, by comparison, is static and private. In open groups or news feeds like Finance or Sales, multiple employees can share ideas in real time on projects, analyze data, and compare drafts. “I learned more about my company in a few months through using Chatter than I had in the last three years,” Benioff says.

At Salesforce itself — where there are about 3,000 daily Chatter posts, and internal e-mails have decreased 30% since Chatter went live — there are groups designed to get employees across departments and rank talking to each other about work life, including Tribal Knowledge and Airing of Grievances. Kaplan says you can’t post anonymously, so complaints and queries are rather tame. But it nonetheless generates a degree of cooperation unseen at large organizations.

When you think about it, by providing business software on the web as its core mission, the collaborative model that the company has with its customers engenders cross-function collaboration within each customer as they use the Salesforce software.

Success has many elements, but there are two secrets underpinning Salesforce that stand out:

1)   A Customer Culture as noted at the start of this post, is fundamental to Salesforce’s growth and profitability.

2)   Collaboration across functions and with customers fuels trust and innovation resulting in a happy workforce and more value for customers.

How strong are these cultural attributes in your company? What could you do to strengthen them?

If you want to build this capability in your organization check out our MarketCulture Academy.

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Posted in C-Level Quotes on MarketCulture, Chief Customer Officers, Culture Change and Social Media, Customer Centric Culture, Customer Centric Leadership, Customer Centric Values, customer focus, Customer Insight, Customer Obsession, Customer Satisfaction, innovation, Innovative Thought, Market Culture in Action, Strategic Alignment, Trust

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Has Cisco got its strategic alignment right?

Posted on January 14, 2013 by | Leave a comment

creating alignment in a roller-coaster economyCisco’s roller coaster 2012 was due in part to the Eurozone crisis that took a heavy toll on network spending and a subdued US market. It seems set for a better 2013 due to restructuring initiatives, undertaken during 2012, and more favorable prospects in its U.S. market.

Analysts at Forbes report that Cisco has scaled back its ambitions to diversify into 30 new businesses and instead is focusing on those areas that add value to its core routing and switching businesses. As a result, it has restructured its operations and cut jobs in areas that are not its core focus, making the organization leaner and more efficient. It helps Cisco to benefit more from the long-term growth trends of data demand and cloud computing. The analysts report that Cisco’s

“fundamentals remain solid due to the ongoing transition from wired to wireless networks, the burgeoning usage of data on both mobile and wired networks as well as a strong demand for cloud-computing routing solutions on the enterprise side.”

Cisco has also announced the acquisition of Meraki, a smaller networking firm that provides cloud-based services to small and mid-sized companies. This acquisition gives Cisco a big opportunity to tap into the fast growing mid-market segment as well as use Meraki’s product line to create a compelling cloud-based platform for bigger customers down the road. With businesses increasingly looking to move to the cloud and networks becoming more software and cloud-focused, Cisco’s move will help it address changing trends and compete better with fast-growing rivals such as Aruba Networks. Alcatel Lucent’s recent foray into core routers also poses a risk for Cisco.

The omens are good for Cisco, but the combined effects of restructuring, refocusing, acquisitions and more aggressive competitors place substantial strain on the resilience of its culture.

While senior management might be clear on strategy and focus, does strategic alignment exist across the reduced workforce and the recently acquired Meraki?

Has the company retained its innovative customer-centric culture? Is the company measuring and benchmarking its customer-centricity to identify any potential weaknesses and associated risks to growth and profitability?

For Cisco to gain the momentum that analysts expect it will need to ensure its strategic re-alignment is embedded in all parts of the business. This means that all employees and contractors need to understand what the strategic focus is and how it translates into their everyday work. They then need to consistently act to support it and the goals of the business by providing superior value to customers.

There is no room for complacency at Cisco. We have seen the havoc that has been wrought on Hewlett-Packard’s culture and its subsequent business performance through acquisitions and frequent refocusing in recent years.

Do you have strategic alignment embedded in your business?

Has your business undergone restructuring and refocusing in the last 2 years?

Do people in all functions and groups know your vision and strategy and exactly how they are supporting it in their everyday work?

The only real way to find out is to measure and benchmark your level of strategic alignment.

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Posted in Customer Centric Culture, Market Responsiveness Index, Strategic Alignment

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