Reinvent Your Policy Manual!

We can’t believe it is already December! Why not spend the remaining weeks streamlining your policy manual? In many companies, this archaic document is the biggest barrier to becoming a customer-centric organization. Here are some guidelines to begin to reinvent your policy manual:
Remove any policy that does not add value to the customer, supplier or coworker. Replace old verbiage with "work hard and be clever."
Review the manual for "rules" that hinder the delivery of exceptional customer service. If you allow your frontline staff to say, "We cannot help you because it is against our policy,” your culture needs a shake-up. Begin by enabling employees to “use good judgment" in everything they do, from team interactions to solving customer problems.
Identify any policy that infers that you do not trust your employees. Particularly examine your expense account policy. We know of one company that decided to allow employees to issue their own expense checks. They had guidelines for tax documentation that were followed by all. The result was the elimination of most of the accounting approvals and a reduction in overall travel expenses. Over the years, we have worked with several companies in which senior managers have multi-million dollar budgets and are responsible for hundreds of millions of dollars of product production, yet they must obtain corporate approval for $500 to attend a workshop! This policy makes absolutely no sense.
Try adding the words "have fun" to your policy manual. It has been said that if you find a job where you can have fun, you’ll never have to work again.
A friend of ours is a business school dean of a prestigious university. His entire policy manual is “work hard, be clever, use good judgment and have fun.” Nordstrom’s policy manual is one page; it reads: “use good judgment in all situations. There will be no other rules.”
The typical corporate policy manual is written to send “warnings” to employees when they should send “encouragements.” Trust your workers, and they will reward you with superior performance.
So…start the New Year out right and reinvent your policy manual!

The Learning Organization

The learning organization is one in which all employees are continuously improving their personal work habits in order to delight their customers. A key goal of learning is to develop positive behaviors that benefit both individuals and organizations alike.
Our belief is that proper habits are developed from obtaining knowledge, skills and attitude. Knowledge is the understanding of what, how and why we need to do something. Skill is how we apply the knowledge in a practical situation. Attitude is the desire or motivation to transform knowledge into skills and ultimately into a habit.
Your organization may provide customer-driven training and reinforce its application, but employees may lack the attitude to develop certain skills into habits. Unfortunately, attitude cannot be taught. In fact, Holocaust survivor Victor Frankl defines attitude as “our response to what we have experienced.”
Your organization must act as the catalyst that motivates employees. But it is an individual’s prerogative whether or not to choose a proactive attitude and behaviors that will ultimately produce a successful learning organization.

You Can Become a Learning Organization!
Create the vision, mission, and values of the organization that are clearly understood by all employees and that promote continuous learning.
Determine what training is needed for solving customer problems and discovering their wishes. Create an individual developmental plan for each employee with specific learning objectives.
Reinforce the learning organization through:
Regular one-on-one coaching sessions
Monthly skills-refresher sessions
Quarterly learning retreats
Individual self-study programs
Aristotle said, "We are what we reportedly do. Excellence, then, is not an act, but a habit." Creating a learning organization may be the key to gaining a competitive advantage in the years to come!

Note: We will be out of the country for the next three weeks. Blog posting will resume December 1. Have a Happy Thanksgiving!

What Commitment Means

The American Heritage Dictionary defines commitment as
"being bound intellectually or emotionally to some course of action."
Ask most managers if they are committed to customer service, quality, and employee development, and nearly 100 percent would utter the expected response: "of course we are!” But ask them three more questions: "Are you emotionally engaged in continuously improving your products and services? Do you spend at least 5 percent of gross sales on training? Do you grant employees the power to ensure that customers have a positive experience with your company?" ... and their eyes glaze over.
Forget specifying exact methods or means for achieving the results you desire from employees; otherwise, you will be buried in micro-management. When employees fail to produce results because they were forced to adopt someone else's roadmap, they become discouraged and disenchanted with their jobs. We often hear, "I did what I was asked to do, so it's really not my fault." Sadly, these stiffled employees end up "checking their brains at the door!" But, when employees know what is expected of them, and they are entrusted to apply common sense principles to execute their jobs, they will do whatever is in their power to create those magical moments for their customers. The result: true commitment that may surprise even the employees themselves!

WHERE LEGENDARY CUSTOMER SERVICE BEGINS

By Bill Capodagli, co-author of Disney Way: Harnessing the Secrets of Disney in Your Company

Ask any CEO if he or she is committed to excellent customer service and the answer typically is, “Of course we are!” But ask why their organization’s service isn’t among the ranks of the Walt Disney Company, the Four Seasons Hotels & Resorts, or any other extraordinary service provider and the excuses are tiresome: “We can’t pay enough,” or “People don’t care,” or “Our turnover is high.”

Now assume for a minute that these excuses are valid (which I am convinced they are not), and ask a leader, “What are you doing to alleviate this problem?” and witness their awkward scramble for an answer. If an organization is truly committed to legendary customer service and their lame excuses were valid, why wouldn’t they be using all available resources to solve these problems?

So what is the secret? It may seem amazing that the solution to achieving legendary customer service does not lie in some “slogan driven” training program, but rather in a simple two-step process: (1) Hire to the culture of the organization; (2) Provide a multi-day orientation program that encourages new hires to embrace a new set of values.

Think about it – Disney, the Four Seasons, Nordstrom, and other celebrated service providers hire from the same employment pool and pay about the same wages. What these companies do better than others is hire and orientate.

Hire to the culture. World-class service providers require multiple interviews with potential employees in addition to the one or two human resource interviews. The purpose of these multiple interviews is to assure that the candidate fits the culture of the organization. At the Four Seasons, in addition to a diverse mix of employees, each hotel or resort manager must also interview all potential hires before an offer is made. Kathleen Taylor, President of the Four Seasons’ worldwide operations explains: “It is not for the GM (General Manager) alone to say, ‘Yes, I like the person’ or ‘No, I don’t.’ It shows the potential dishwasher that his [or her] job is really important. He may go home that night and tell his mother or friends, ‘Wow, I met the GM today,’ and on his first day at work, he knows the GM, and the GM knows him.” Equally important to ensuring that a candidate fits the culture is consistently demonstrating that everyone's role, no matter where in the hierarchy, is important to creating magical moments of service.

Hiring to the culture of your organization assumes you can define your organization’s dream (or vision), values and behaviors (Codes of Conduct, as defined in our best-selling book, The Disney Way). If your culture needs defining, it would be wise to work on those critical elements before embarking upon the hiring process.

Over the years I have heard many executives argue, “Why be so concerned with hiring the right person? Anyone can learn these entry-level jobs, and if a new hire doesn’t work out, there are three people waiting in line.” The solution to their shortsighted mentality eludes them. They probably would agree that the most valuable asset of any organization is the customer. So wouldn’t they want to trust their most valuable asset to the most competent, capable and skilled person available, not just the “next in line?” It leaves me dumbfounded.

JoAnn Wagner, President and CEO of the SOS Staffing Family of Companies, explains how ‘Hiring for Fit’ is vital to effective customer service and overall success. “Superior customer service begins with uniting the right talent with the right opportunity, which starts long before a candidate’s first day on the job. Interviewing, testing and screening of a candidate’s experience and background compared with a company’s culture are all factors that must be carefully weighed. Once a culture match has been made, a comprehensive orientation program is the final crucial piece.”

So, if caring for your customer is not reason enough for finding the right employee, isn’t increasing your competitive advantage? Both the Hay Group and Workforce Management magazine have calculated the cost of replacing an $8.50/hour employee at $10,000 to $12,000. Disney, the Four Seasons, and fellow world-class service providers experience 3-5 times lower turnover than their competition.

I also hear the argument, “Our HR department is too small or does not have time to find the ‘right’ people.” One solution to this problem is to form a strategic alliance with a staffing services firm. Susan Aherns, Regional Manager for Adams & Associates in Washington explains: “Companies who form a true partnership with a staffing firm will add arrows to their quiver that they would not have otherwise. The right firm can function as an integral part of a company’s HR department, saving it valuable time and money. In the end, businesses often save more by utilizing a staffing firm to find the best candidates.”

The Commonwealth Alliance Program (CAP) reports that businesses now attribute 25% of all revenues to strategic alliances. Karen Lustman, District Manager for Orange County direct hire firm Devon & Devon, elaborates: “Hiring in today’s competitive climate is much more than finding a body. Strong strategic alliances result in win-win solutions. When a hiring firm understands the company’s mission and culture, they send only best-fit candidates.”

If you have hired an individual who has passed the “culture fit” test with flying colors, it’s now your responsibility to immerse him or her into your culture. This must happen before they begin their operational or staff responsibilities.

Orientation. Orientation programs in most organizations would have to increase by a factor of ten to reach the level of pathetic. Most involve new hires in tedious activities ranging from completing forms to reviewing policies. Then, the “welcomed” newcomer gets thrown into the hustle of getting the job done. Even in companies with well-defined cultures, the success rate of these new hires is less than stellar.

If new hires end up being fired or resigning within the first six months on the job, they are almost always branded as failures. I’ll bet you’ve heard the feedback: “he never really bought into our level of service,” or “she never really understood our values.” An all too often believed myth is that values can be explained or even dictated.

Nothing could be further from the truth. One cannot mandate a new set of values to anyone; the only way for values to be effective is for individuals to embrace and internalize the values. Luckily, we can turn to a tremendously successful role model for this lesson in action. . . Isadore Sharp, CEO and founder of Four Seasons. “Issy” told me, “They (values) are only words on paper, the words have significance only if behaved; the behaviors are significant only if believed.” Legendary customer service does not come from a policy manual; it comes from the heart.

So, how do you get new hires to embrace a new set of values? Answer: Build a multi-day orientation process. Anything less than two days is not enough. People need time to understand how the new values contribute to the success of the organization and why their current set of values will not work. For decades I have been involved in leading organizations to structure cultural orientation programs so that individuals and teams can internalize the vision, the values and the culture of an organization.

I challenge you to spend your time establishing the right hiring process and the right orientation process, not in just getting the “right” people.

Become a Customer Service Legend

In a recent Gallop survey of North American corporations, 55 percent of upper management indicated that they had successful customer-focused programs in place and that they were totally committed to the process. Their employees did not agree; only 36 percent indicated that the process was successful; 54 percent voiced the opinion that top management was not customer-focused.

A customer-driven strategy is in motion when all coworkers in an organization are obsessively striving to solve customer problems and discover their wishes. You probably know people who insist that customers are the driving force of their companies, but there is no visible evidence to back up their words.

The customer is the driver of the learning organization. Too many organizations claim to be learning organizations because their Human Resources Departments (HRD) offer extensive training programs designed to develop the coworkers. In most cases, these training programs are developed without any consideration of the customer. Some HRD staff may believe they are meeting the needs of their internal customers. This may work in theory, but the linkage to the external customer is, at best, weak.

Secrets for Becoming a Customer Service Legend!
1. Redefine Your Product! Redefine your products from the customer’s point of view. If you are looking to purchase a video camera, you are not only buying the camera, you are buying someone’s expertise to help you make a decision.
2. Listen to Customer Complaints! For every one customer who complains, 26 remain silent. Only 9-37% of the customers who do not complain will give a company a second chance; 50-80% of those who do complain will give a company a second chance.
3. Respond Quickly to Customer Needs! It costs five times more to attract a new customer than to keep an old one. A study done by Bain Consulting concluded that a 5% increase in customer retention equals a 25-100% increase in profitability. Train workers to own customer complaints. 4. Cherish the Front-line Coworker! The person in the least respected position in any company is usually the one who has the greatest impact on customer service. In most retail establishments, this person is the sales clerk, the one person who has the future of the organization in his or her hands.
5. Provide Inspired In-touch Leadership! Give your employees the tools to succeed; let them know what is important; and enable them to do what is necessary to solve customer problems and discover their wishes.

Marketing efforts focused exclusively on attracting new customers are missing the mark. The cost of attracting a new customer is five times the cost of keeping existing customers. Recent studies indicate that a 1% increase in the customer retention base will increase profits by 4%.

If you are a manager, take a minute to dump out the contents of your "in" basket on top of your desk. We will bet that 99% of the material deals with strategy, budget, financial returns, capital expenditures and personnel policy matters. This naturally equates to how you spend your time. If you are truly committed to developing legendary service, your focus needs to be on continuously listening to your customers. Federal Express is a great benchmark in customer focus efforts. They have daily customer satisfaction indexes, and more importantly, their bonus programs are directly tied to the customer satisfaction index.

Unleashing Productivity

A Dilbert cartoon shows employee survey results as: "I work here so I can . . . postpone starvation (80%); sell cosmetics to coworkers (10%); steal enough yellow sticky pads to insulate my attic (9%); get cartoon ideas (1%)." This cartoon may seem amusing, but an organization’s advantage is stronger when coworkers’ needs regarding employment are met. Many employers feel that the only reason people show up for work is for the money. A University of Massachusetts survey indicated that roughly eight out of ten people said that they would continue to work even if they inherited enough money to live comfortably.

A recent Gallop Poll indicated that employees felt that the number one way to increase their performance was "to allow us (employees) to put our ideas into action"; the fourth most important was "to listen to our improvement ideas." Walt Disney once said, "The growth and development of the Walt Disney Company is directly related to the growth and development of its human resources . . . the cast. At Disney, we operate on a first-name basis. We go about our work in a business-like way, but we feel that work can be fun. We believe that everyone in our organization is important. We soft-pedal job titles, and we feel that one activity is as important as another."

The Key: The often overlooked resource is the frontline employee. . .unleash their true potential.

How do you make customer-focused measurements happen in your organization?

1. Insist that all employees in the organization communicate with their customers to understand their problems and wishes.
2. Identify the key processes that support the needs of the customer.
3. Map the processes. Identify process time, quality levels and process costs.
4. Modify the process. Eliminate wasted efforts, time and cost. Check each step in the process for value-added activities.
5. Ask that every department post their customer requirements, cycle times and quality levels for all their key outputs.
6. Start over at step one and repeat the process.

Lessons in Leadership

It has been our pleasure to get to know the leaders and staffs of our featured Disney Way organizations . . . The Cheesecake Factory, Downtown School (Des Moines), Ernst & Young, Four Seasons Hotels and Resorts, Griffin Hospital, John Roberts' Spa and Men's Wearhouse . . . and discover their own Dream, Believe, Dare, Do magic. All are industry icons who set a standard by which others in their fields should be judged. For example, the dramatic results of the Downtown School illustrate the need for a dramatic paradigm shift in the American educational system.

The University of Michigan Business School's National Quality Research Center compiles and analyzes the American Customer Service Index (ASCI). This study began in 1994 when the index for the retail sector was close to 75%, then eleven years later at 73.5%. It still amazes us that even though Disney has been the "poster child" for "be our guest" service since the opening of Disneyland in 1955, painfully few companies have been inspired to emulate Disney's culture. Yet, when Dell introduces the latest and greatest new feature on one of their computers, within 60 days, the HP engineers are able to incorporate their version of the feature into their own products. They are able to take apart a Dell computer and discover the secret.

Yet, every day, The Walt Disney Company is wide open, and thousands of people around the world can actually see the "secret" — treat customers like guests in their own homes. They do this in front of the whole world, but few get it! Our featured organizations masterfully apply Walt Disney's definition of leadership to grow and nurture their cultures: "The ability to establish and manage a creative climate in which individuals and teams are self-motivated to the successful achievement of long-term goals in an environment of mutual trust and respect." There are many striking leadership similarities between our featured companies.

Let’s consider the key elements of Walt's definition beginning with "establish." Like Walt, each of our leaders established or changed their organizations to create "magical moments" for their guests — an upscale casual dining adventure offering 200 plus menu choices; a truly unique five-star hotel experience based on The Golden Rule; a financial services firm where the staff cares for the client and the firm cares for the staff; a hospital that is patient-centered rather than physician-centered; a clothing store where "wardrobe consultants" live the "I Guarantee It" philosophy; a school where students take accountability for their own learning; a spa with "the Norm factor" — where everybody knows your name.

As diverse as these organizations are, they all have a common thread . . . a leader who "dreamed" of a building something unique that differentiated themselves from their competition; "believed" in the value of their people; "dared" to take risks along the way; and then just "did it!"

The next key in Walt's definition of leadership is "manage a creative climate." Walt defined managing as "developing your people through their work and at the same time having fun." Walt believed that leaders are responsible for developing and training people and providing them with the tools to succeed. All of our featured companies are passionate about providing opportunities for their employees to increase their competencies. Ernst & Young has even achieved national recognition for its training, currently ranking near the top on Training magazine's Top 100 list. Aside from "hard skills" training, our featured organizations are among the best at placing "soft skills" training at the forefront of their cultural initiatives. They all provide an orientation experience in which employees become immersed in their respective cultures and upon "graduation", are energized and self-motivated to live the vision and values of their organizations.

It is also important to note that in each of these organizations, "fun" is not a dirty word. Sure everyone has those days when everything seems to go wrong — when deadlines pile up, or when you wish you had called in to report that you were "sick." But as one person told us, "I don't always like my job when I go home at night, but I am always excited to get back at it in the morning." When employees truly embrace the values of the organization, they not only feel a sense of pride but can also experience the freedom to be themselves . . . and yes, have fun.

Let's consider the meaning of "self-motivated." All of these leaders have realized that when properly trained, their employees can and should be making decisions to create those special moments for their customers. Be it the doorman at the Four Seasons, or the hair dresser at John Robert's or the manager at Ernst & Young — they all know that management has entrusted them with one of the most important elements of any business -- the customer experience. An empowered workforce is a self-motivated workforce. Like Disney, our featured organizations have a working definition of "long-term" that speaks volumes about culture. In the typical company, "long-term" thinking relates to a strategic objective for adding products, services and perhaps new locations. Companies such as Four Seasons and The Cheesecake Factory define "long-term" thinking in terms of values and beliefs upon which their growth is based. They go to great lengths to ensure that their cultures can support new ventures and still remain true to their credos.

Arguably the most important part of Walt's leadership definition is "mutual respect and trust." Without exception, these two values represent a common thread woven through each of these organizations from — Cheesecake Factory's five-year profit-sharing programs that rival many 30-year retirement plans; Downtown School's teachers who never raise their voices in anger in their classrooms; Ernst & Young's "People First" philosophy; Four Seasons Hotels' Golden Rule strategy; Griffin Hospital employees' willingness to risk their jobs to retain their cherished leader; John Roberts' relationship with the patients and families of Cleveland's Children's Hospital; and Men's Wearhouse leaders who take responsibility when their employees fail. Since the dawn of our new century, these seven organizations have cemented their "best practices" success. We believe that Walt Disney would be proud of their many accomplishments and especially for the proof that there is still magic in his original credo . . .Dream, Believe, Dare, Do.