ValuExecBlog

Lessons in Loyalty

I have just finished reading an excellent white paper written by Lorraine Grubbs and put out by Parature (www.parature.com) entitled 'Lessons in Loyalty: How Southwest Airlines Does it - An Insider's Point of View.' I say excellent because for those of us in the service industry, not only does it provide valuable lessons in customer service and a useful insight into Southwest Airlines but more importantly, the white paper highlights how a true understanding of the business you are in is fundamental to success. 

Lesson # 1:
Know what business you are in. From the very first day that a person starts at Southwest they are taught that they are in the Customer service industry and that they just happen to fly airplanes.That is their core business and everything else from who they hire, how they conduct interviews etc flows from that understanding. 'Customer service resided in our mission statement, our meetings, and our celebrations.'

Question: What business are you really in and do your hiring and financial policies, incentive schemes etc flow naturally from that or do they work against it?

Lesson # 2: 
Hire for attitude, train for skill. Southwest believes that if a person has the right attitude, they can teach them how to deliver great Customer service. To that end, interviewers ask questions such as 'tell us about a time when you defused a difficult Customer situation,' or 'tell us about a time you went above and beyond for a customer.' The thinking being that if the applicant has a history of having done it (exceptional customer service) they will continue to do it in the future.

Question: What do your interviews uncover about the applicant that are not only pertinent to the role at hand but also to your core business philosophy?

Lesson # 3:
Teach them from the start. From day 1, new hires are immersed in Southwest's Customer service culture. They learn about its history, its awards, its advertising. They see footage of customers explaining why they no longer fly with a particular airline and they are also reminded that ' ....a mere 5 passengers per plane make the difference between making a profit and losing money.'

Question: What induction training programs do you have in place for your new hires? How do these programs support your core business philosophy?

Lesson # 4:
To keep a major initiative alive, it must be supported at the highest levels within the company. In order to keep the Customer service spirit alive at Southwest, they created a high-level position of 'VP of Customers.' The company also realized that if they were to indeed have a customer service mindset that permeated throughout the company, they could not separate the importance of the internal customer (employees) from the external customers (passengers). 'If the internal customer is happy, it will naturally flow to the external customer in the form of good service.'

Question: How does the executive team constantly show their support for the core business philosophy?

Lesson # 5:
Provide employees with the 'Keys to the Kingdom.'  Employees at Southwest are empowered to 'do the right thing' (versus doing what was right.)' The company is confident that their employees including new hires have the ability to make good decisions but they only believe this because they know that they have hired people with the right attitude from day 1 and have trained them in the company's Customer service philosophy.

Question: To what extent have you empowered your employees and how confident are you that they have the ability to make the right decisions?

Lesson # 6:
See your customers through the eyes of friendship and family. By doing so, you start to do things for your customers that you would only do for family and friends.

Question: Do you treat your loyal customers as friends and family and when was the last time you 'wow'd' them by doing something unexpected?

Lesson # 7:
Check your ego at the door. Southwest practices 'Servant Leadership' and seeks 'humble, compassionate mindsets that could be tough when needed. People skills are a must.' Leaders walk the talk and spend time with front-line employees. You can't fake caring - employees and customers will see right through it.

Question: When did your company's leaders spend time with front-line employees and when did they last deal with customers at the coal-face? 

Lesson # 8:
Fun, fun, fun. Southwest believes that if people are having fun on the job, they will be more apt to come to work with a great attitude and deliver great Customer service.

Question: When did you last hear laughter around the water cooler or in the canteen?

Lesson # 9:
Keep customers at the forefront of employees' minds through rewards and recognition.Southwest pays alot of attention to their strategy for rewards and recognition of employees and are not afraid to include their customers as part of those strategies. They include customers in their in-flight magazines and have created a MOM committee whose task is to review operational failures on the premise that 'if your mom was on board, would you be happy with they way she was treated? (And we all know how protective of our mothers we are).

Question: Do your reward and recognition strategies support your core business philosophy and would your mother be happy with the service of your organization?

Lesson # 10:
Embrace the lessons above and ensure that they remain true to your core business philosophy and you will be successful. 

ian

PS: I apologize to those reading this blog and to Ms. Grubbs and Parature for not providing a direct link to the White Paper however it can be accessed through Parature's website www.parature.com. 

Asking the right question

Have you ever walked out of a strategy meeting and felt that nothing of any substance was discussed or agreed to?

A few days ago I was facilitating a strategy workshop which was fast becoming a free-furore. Having come out of a period of cost-cutting, each unit head wanted to make up for lost time and so was arguing aggressively for more funding. Each had valid reasons as to why they deserved the funds more than their colleagues and each had the necessary analysis to back up their arguments. After a hard and argumentative morning session, it was obvious that no-one would budge; no one would compromise and that unless something gave, the strategy meeting would become meaningless.

Over lunch, I remembered a blog written by Roger Martin, the Dean of the Rotman School of Management at the University of Toronto in Canada entitled "My Eureka Moment with Strategy" (http://blogs.hbr.org/martin/2010/05/the-day-i-discovered-the-most.html?cm_mmc=np..) in which he suggests that rather than have managers talk about what they want and what they believe have them specify what would 'have to be true for the various options that are on the table to be a fantastic choice.' His argument being that when managers do not dwell on what they think to be true but focus on what would have to be true for a particular option to work, it allows them to 'step back from their beliefs and contemplate the possibility that they might not be entirely correct.'

During the next session of our strategy workshop, we put all the options on the table and posed the question of each of them: 'What would have to be true for this option to be a fantastic choice?' Suddenly what had before been a heated debate became a collaborative affair. Internal politics, it seemed, had stepped out of the room.

So, ask the question and sit back and watch a strategy emerge that has buy-in from those in the room.

Thank you Mr. Martin.

ian

  

Coach John Wooden ~ Farewell to a wonderful man

Through an e-mail that I received from Jim Canale yesterday, I learned that Coach John Wooden had passed away on Friday (last week) at the age of 99. I did not know the man personally, but through his books, his wisdom and through the way he conducted his life as a whole, he has impacted my life nevertheless.  

I am copying Jim's e-mail in its entirety as it also contains a glowing tribute to Coach John Wooden from Anthony Robbins.

A toast - to Coach John Wooden.

ian

 

Dear All,

I just got this email from Tony Robbins and thought that you'd also enjoy and be inspired by it! Use the download link right away to hear a great interview that Tony did with Coach John Wooden years ago. 

All The Best,

Jim Canale

Begin forwarded message:

From: "Anthony Robbins"
Date: June 7, 2010 7:37:00 PM EDT
Subject: A Gift and Personal Note From Me In Memory of a Great Man  

Dear James, 

Legendary UCLA Basketball Coach John Wooden died Friday at the age of 99. He was not only the most successful college basketball coach in history (winning 10 out of 12 NCCA National Championships, at one point winning 88 games in a row!) but more importantly to me, Coach Wooden was one of the finest human beings I ever knew. I met him and interviewed him for the first time almost 20 years ago for my PowerTalk interview series - at the time I was 30 & he was 80! I was profoundly moved by how much he cared for his players and the love he had for his wife Nellie who died in 1985. They were married for 53 years and Coach wrote her a Love Letter every year on the anniversary of her passing. He kept all those letters on the bed beside him and he also only slept on his side of the bed, keeping her side untouched. Coach prayed every day and knew some day he would be reunited with her, and now after 25 years they are back together. ;-) 

In spite of his legendary accomplishments he was one of the most humble human beings you could ever meet. We stayed in touch over the years and then last year I did another interview with him. It turned out to be one of the last interviews of his life. At the time I was working on my new NBC prime time Series, "Breakthrough with Tony Robbins" and I asked Coach Wooden if he would meet with an NBA basketball player who had suffered a sudden stroke that ended his career in an instant. Worse than the stroke was the fact that the man felt that without basketball he had lost his worth as a man. Coach Wooden's words penetrated the man andbecame a key moment in his turnaround. We filmed the interaction for the show but it doesn't premier until after July 27th so I can't share the footage until our show airs... but, I can share Coach Wooden's gifts with you through the original audio interview I did many years ago. In honor of him I've made this very special interview available for download here (please download now as I can only keep the link up for the next 48 hours). 

I hope you are as touched by him as I was, and continue to be, as I listen to his soulful words teaching me even today, after his passing. 

Warmest regards, 

Anthony Robbins 

CFO or UFO: It depends on where you sit

The headline for the PR release for a recent CFO survey said it all: 'CFO Survey reveals companies agree that successful process execution positively impacted company performance.'  Well hello! Where have all the CFO's been for the last 10 years? It appears that the Global Financial Crisis has woken them up to what organization designers have been telling them for years, namely processes matter! When it comes to process efficiency and process effectiveness, CFO's can be likened to UFO's - often sighted on dark and dimly lit nights, but no one really knows who or what they are or where they come from. That appears to be changing. They are becoming more involved in the organization's processes or, at least if the survey is to be believed, they are wanting to become more involved in process effectiveness.

The survey quoted above was titled, "Going Beyond Process Efficiency to Process Effectiveness: The CFO's Role in Standardizing Global Processes and Improving Business Outcomes" and was conducted amongst 150 senior finance executives in the first quarter of 2010 by CFO Research Services and sponsored by Genpact Limited. The key findings of the survey were as follows:

1. Process, as a lever for business performance, is still underutilized
2. Organizational silos restrict the enterprise-wide view, leading to significant value leakage through the organization
3. A focus on process efficiency versus overall effectiveness can leave a large amount of value unaddressed
4. Complexity and diversity of processes across a large enterprise, coupled with unclear inter-linkages between process drivers and business outcomes, restrict organizational priorities.

In addition, the survey found that many financial executives felt that developing appropriate metrics to help guide process improvement efforts was an area where they could become more involved in the organization and because of their in-depth knowledge of each function, they also believed that they could also become more involved in breaking down organizational silos. Interestingly, 90% of the financial executives in the survey cited organizational silos, and 85% cited resistance to change - as the major barriers to process improvement.   

I believe that the role of the CFO is changing particularly when it comes to organizational execution. Their knowledge of each function does make them a useful resource in breaking down organizational silos. However, whether they will be the standard pallbearers for process effectiveness, I will reserve judgment for a later date.

ian

Findings of the survey can be found at: http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.cforesearch.com&esheet=6295213&Ian=en_US&anchor=www.cforesearch.com&index=1&md5=4f40af4e439caa1f14b12661a7a8ec65

The 'Execution Gap'

Lawrence G. Hrebiniak, Professor of the Department of Management at the University of Pennsylvania once wrote, "The problem with poor performance typically is not with the planning, but with the doing.' The fact is - strategies often fail because they are not executed well which would tend to support the research undertaken by The Conference Board (2007) which found that the #1 challenge of CEO's was 'excellence in execution.'

Generally, there is a gap between what a company's leaders want to achieve (through strategy) and the ability of their organization to achieve it.' This 'Execution gap' often leaves leaders shaking their heads in disbelief because in their haste to fix poor execution, they tackle the symptoms and not the root cause of the problem.

A case in point - a company that we did work with was not meeting its sales targets so they decided to launch a series of promotions. Sales increased as you would expect but they still did not reach the targets that the management team had committed to in the Business Plan. Throwing additional funds into the pot to chase sales and then not getting the anticipated uplift put added pressure on the CEO and sales director and resulted in the company cutting costs elsewhere in the organization. After undertaking a very quick Strategy Execution Health Check on the company, we found that not only were there serious breakdowns in communication within the company (easily fixed), but that the company's inherent processes were also derailing any efforts that were considered over-and-above the standard day-to-day sales activities (short term exceptions rectified this issue). In other words, the company's own processes were working against it rather than for it.

The take out in all this is that once you have completed your strategic plan make sure you have a very clear understanding of the 'execution gap' that exists in the organization. And believe me - all companies have an 'Execution Gap.

ian