Tag Archives: customer centric leadership

This is why playing it safe is the biggest risk for legacy companies

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Making pizzas seems like a simple business. After all its been happening for centuries and it seems like almost anyone can do it. But to make a sustainable business out of it and maintain an appealing brand in today’s competitive world requires a customer centric leadership mindset.

A starting point for Domino’s change from an ailing pizza maker in 2010 to a growing food business was a leadership change. Patrick Doyle became CEO in 2010 after Domino’s had experienced several years of stagnating business and declining share price. Doyle realized that he could only revamp the business if he could lead and create a mindset change in staff – a change from an “omission bias” where people worry more about doing something different than no change and “loss aversion” where the focus is on not losing rather than winning. I remember the great American motivational writer and speaker Zig Ziglar saying “.. the fear of loss is greater than the desire for gain”. Doyle realized that playing it safe was the riskiest course of all and he needed to create a mindset in the business that change is a necessity and a learning mentality in which for staff “failure is an option”.

A Customer-Centric Leadership Mindset was Needed to Transform Domino’s Pizzas

The change in Domino’s strategy came with a big picture view and a realization that they were not only in the pizza-making business but also in the pizza-delivery business and how this fundamentally affected the experience of their customers. This meant becoming just as much a tech company as a pizza company to transform the way customers could order and monitor the status of their order using a Domino’s app. Other apps were created to enable customers to provide feedback and become involved in games making ‘virtual’ pizzas.

Staff needed to be open to customer criticism to help them make better pizzas that customers would love eating as well as keeping them warm enough by the time of delivery. So Domino’s took on board customer views of how bad the pizzas were and suggestions on what to do to improve them.

Customers’ frank views were aired in advertising and social media and created a transparency and honesty that enhanced brand trust. Domino’s used staff in ads to describe how they had changed recipes and ingredients to make better tasting products. The company created a delivery car with one seat and a warming oven for up to 80 pizzas. It modernized its image to create more of a sense of style and a sense of humor. All of these things were needed for success. Here is 4 minute video describing what they did:

But the foundation for creating this change to a more agile, customer-responsive business came from the customer mindset brought by the new leader and embedded in the business in a way that enabled them to change and transform. As one senior leader told me recently it is the focus on the customer and their changing needs that is the motivator for leaders and staff to change!

Domino’s business results prove the point. Today, it is the second-largest pizza chain in the world, with more than 12,500 locations in more than 80 countries, and up from a share price of around $8 in 2010 to one of $215 in June 2017.

Learn more about what a customer centric culture and mindset are by reading our book, the Customer Culture Imperative.

How a customer culture has created “The Amazon Effect”: A vision of the Future

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Ever since reading the classic Competing for the Future I realized that a business leader must have one eye on the present and the other on the future. Every organization is running two businesses – today’s business and tomorrow’s business! To build capabilities today for tomorrow’s business requires a cultural capability for agility, change and customer centricity. I call this cultural capability: peripheral vision – the extent to which leadership and staff in the business monitor, understand and respond to trends and changes in the larger environment including technological, economic, social, political, legal and the natural environment (such as climate change). This future oriented cultural capability also leads us to build disciplines around customer and competitor foresight – what will customers’ future needs be and who will be future competitors and where will they be coming from.

The need for organizations to build these cultural capabilities today is demonstrated by what I call the Amazon Effect. Amazon just announced the acquisition of Whole Foods, a natural and organic foods supermarket chain with 465 stores in North America and the UK. What are the implications? With its online technology capability, Amazon now has a bricks and mortar chain that can be leveraged with its delivery capabilities, elevating online selection and ordering of Whole Foods private label products. It will also bring change to the current retail format with new technology like no cash registers – all to add to the ease and convenience for consumers. This will have a huge impact on other supermarkets, food and grocery manufacturers and the entire retail industry.

What would be the impact in the car industry if Apple bought Tesla or in wearable technology if Google purchased Samsung? How is VISA dealing with PayPal and Apple Pay and hotel chains coping with AirBnB? Many of these challenges for established companies are yet to happen – but they will……and soon.

I am thinking about what this means for my own business and what cultural capabilities and strategy we need to build now to ensure its future. What is your Amazon Effect – the thing that would require you to totally reinvent your business? Building cultural disciplines in peripheral vision, customer foresight and competitor foresight will enable you to become prepared to face these challenges, make the changes you need to make, take up future opportunities and run a growing and sustainable business. Without them you will struggle at best, but more likely be consigned to the history books.

Preparing for your future business requires customer-centric leadership that galvanizes all your leaders and staff to build capabilities firmly focused on who your future customers and competitors will be and how the whole organization is geared to adapt and provide ongoing superior value for customers.

Learn more in our award winning book, the Customer Culture Imperative.

Customer Centric Leaders have a Service Focus where Authenticity Trumps Ego

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Lars Bjork, the of CEO Qlik, has built the company with a service focus around a “we” Leadership Style.

My father had a particular view of service. You served your customers, your employees, your family, your community and your shareholders. He would employ people fresh out of jail to give them a second chance. He knew his staff and their families and helped them when they needed help. He knew what his customers wanted and needed and trusted his staff to deliver value. He led his business with integrity and authenticity. He was a highly respected and successful businessman. From his background in retail he told me if you do all of these things right “…the profit will come up through the floor.”

Lars Bjork agrees. He has led Qlik as CEO for the past ten years and has been there from its days as a tiny start-up in Sweden to becoming a world leader in business intelligence software. Qlik was purchased by a private equity firm in 2016 for $3 billion. It now has around 40,000 customers and offices in 26 countries. Bjork says “leadership, for me, is that you serve the team. And the team is the people who work for you.”

How does that operate in practice? Bjork describes it this way.

“I do a lot of town halls and video. People want authenticity, an unscripted sense of ‘this is how it is’. They don’t want to hear packaged BS. They can see that from a mile away. I try to be transparent and share a bit about my private life – because how am I going to learn stuff from people, how are they going to feel comfortable with me, if I don’t share anything?”

He also asks a lot of questions and listens intently to the answers. This has become formalized with a “listening forum”. This occurs where he brings a dozen people together from different sections. He can’t say anything for an hour. They give him feedback, and he just takes it in. He does not push back or dismiss it. This leadership style is one of authenticity and service.

In our current research involving interviews of customer centric leaders I find the most impressive and effective ones are authentic, service focused, and good questioners and listeners. It doesn’t mean they have no ego. They do, but they are essentially team players and do not let their egos dictate decisions. They often do have to make the tough decisions but they do it, like my father, with authenticity and with a “service” mindset.

Learn more about the power of a customer centric culture in our award winning book, the Customer Culture Imperative.

Customer Centric Leadership in Action – A lesson from Elon Musk

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One of the central tenets of being a customer centric leader is listening to customer feedback and responding with action.

There is no better recent example than Elon Musk’s response to a customer complaining about the Tesla charging stations being used simply as car spaces.

The Tesla customer complaining happens to be Loic Le Meur, a fellow entrepreneur and major tech influencer, with 130k followers on twitter. You could argue that probably holds more weight than just your average customer but clearly the issue was one bubbling up and on Elon’s mind.

Here is the interchange from the two on twitter below:

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Loic’s tweet was responded to within 20 minutes and within 7 days the press announced “Tesla to begin charging idle fees to those remaining on the charger beyond a full charge”

As the team at OfficeChai reported:

“Tesla was going to charge $0.40 for every minute a fully charged Tesla would stand at its parking stations after a five minute grace period. This simple change would ensure that people wouldn’t leave their cars at parking stations, preventing others from using them.

And what’s incredible is the pace at which the product change was implemented. Tesla might still call itself a startup, but it hardly is one – it has over 30,000 employees, and large engineering teams. To have a product feature conceptualized, implemented and shipped in a week is nothing short of miraculous.”

Now this might not be the perfect solution but Tesla will listen to customers and refine further as needed.

This is what customer centric leadership looks like in action, in this case led from the top. Elon’s expectation is that everyone in Tesla is listening to customers and responding to continually refine and improve the experience and value being offered.

Are you are customer centric leader? Find out more in our book, the Customer Culture Imperative

 

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

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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.

Is Telstra Australia’s Amazon? – Its Customer Centric Strategy is Paying Dividends

Making Customer Connections

While some may argue you cannot compare a telecommunications company with an online shopping mega star like Amazon, I beg to differ.

There is one core element both companies now share – their absolute commitment to being customer centric.

In 2009 when David Thodey took over as CEO of Australia’s largest telecommunications company, Telstra, he was asked what would differentiate his tenure from his predecessors. He said:

“I want to be an agent for the customer”.

It was a time when Australia’s highest profile company was being criticized on all fronts for its arrogance, poor customer service, unjustifiably high prices and monopolistic practices.

Thodey set about changing the culture at Telstra to a customer focused culture and invested heavily in defining and communicating internally a vision, values and strategy that had the customer at its center and customer service as its catch-cry. It included intense training of its 5,000 people leaders in Australia, India and the Philippines as well as new systems and processes that empowered customer facing staff to provide much better service to customers and solve their problems with least fuss. A new division was set up that enabled staff who heard of a friend’s problem at a barbeque to give them a direct line to a solution if they were having trouble getting it solved. Telstra embarked on a program to create advocacy with its customers and its staff. Use of the net promoter measurement system with daily feedback from thousands of customers fed to the areas in Telstra responsible was a trigger for focus on customers. Other customer feedback measures and progressive culture assessments have supported Telstra’s customer-centric journey.

Telstra: Improving Customer Advocacy

Now it is paying dividends. The company has posted seven successive half years of earnings growth to AUD$2.1 billion for this latest half – up 21% on last year. Dividends have been steady, but are now set to increase. Telstra is on a roll with its customer-centric strategy and stronger customer culture proving Thodey’s stance. Stock price is at an all-time high at around AUD$6.50 per share with steady and continuing growth up from around AUD$4.50 two years ago.

Telstra posts 22pc net profit rise

David Thodey is the first to say that Telstra still has some way to go. But his leadership of a strategy and culture in which the customer is at the center of decisions and service delivery is creating a highly sustainable profitable business.

If you want to see how it all began you will find it was originally initiated first in the Finance Group at Telstra and described in a case study about the CFO’s value service culture initiative. See Case Study Highlight: Telstra Transformation.

Telstra’s transformation story can also be found in “The Customer Culture Imperative: A Leader’s Guide to Driving Superior Performance”