The best strategy to achieve business success? It’s really so simple…and, yes, so difficult
Many years ago, Southwest Airlines’ then chairman and CEO, Herb Keller, was asked to explain why Southwest is the most profitable of the ten largest airlines and has a cap value greater than the other nine airlines combined. He replied, “We take great care of our people, they take great care of our customers, and our customers take great care of our shareholders.” I was reminded of that statement as I began to read this book. Although Zeynep Ton focuses much of her attention on four companies (Costco, Mercadona, QuikTrip, and Trader Vic’s), she explains how others such as Southwest and Zara have also used a good jobs strategy to achieve and then sustain high profitability while continuing to be ranked each year among companies that are the most highly admired and the next to work for. According to Ton, more than ten years research leaves no doubt about this reality: “Great performance, whether in customer service or the quality of manufacturing, requires operational excellence. Operational excellence requires a great operational design and great people to carry it out. Neither can make up for the lack of the other.”
However different companies in service industries may be in most respects, Ton has identified what those among them that have a good jobs strategy share in common. She calls it the “Virtuous Cycle of Retailing” which has four interdependent, mutually supportive components: High Labor Budgets > Good Quality and Quantity of Labor > Good Operational Execution > High Store Sales and Profits > High Labor Budgets > etc. It is important to note that, for those who follow the good jobs strategy, labor costs are in fact an [begin italics] investment [end investment] that — as the cycle suggests — results in hiring better people who, in turn, run more efficient and more productive operations that, in turn, generate high store sales and profits, and that makes hiring better people not only an investment but a very smart investment.
Consider Walmart and Costco. The Walmart mantra is something like this: “We need to run a really efficient operation because customers come to us for low prices.” The choice is clear: Improving jobs would mean either that Walmart would make less money or that customers would have to pay more. Wrong. “The assumed trade-off between low prices and good jobs is a fallacy. There is, in fact, a good jobs strategy, even in low-cost retail, that combines high investment in employees with a set of operational decisions that deliver value to employees, customers, and investors.” Over a ten-year period, Costco’s index share price tripled Walmart’s.
Ton shares the nine principles of Mercadona’s Total Quality Model (TQM) to which the supermarket chain has been committed since 1993 when then president and CEO, Juan Roig, pressed for their adoption: Everyone is reliable, anything that does not provide value to customers is not done, every company is an assembly line, have a scientific mind, do it right the first time — zero defects, everything can be improved, the company has to prescribe and endorse only what is best, abide the law, and convince rather than conquer. Mercadona’s employees have the best benefits in the industry as do QuikTrip’s: “All receive a range of benefits, including a Christmas bonus, tuition reimbursement, free fountain drinks and coffee when on duty, and an employee assistance program to help with personal problems. All employees can benefit from the QuickTrip Cares Employee Disaster Fund, dedicated to helping employees who are affected by natural disasters or life-altering energies such as a house fire, an accident, or a sudden illness in the family.”
How do employees respond to a good jobs strategy? Here are two incidents that occurred at a Trader Vic’s store. Ready to check out, a customer realized that she had left her wallet home. The cashier paid and then said, “Just pay me back next time you’re here.” At another store, a customer was a dollar short and about to remove an item when the cashier reached into his pocket for the dollar. “Pay it forward and have a great day.”
Zeynep Ton offers an abundance of real-world support for the good jobs strategy, one that can be of substantial value to everyone involved, not only in services industries but in all organizations with a human community of stakeholders. “The good job strategy is difficult, but it is possible, profitable, and very much worth the effort.” My own opinion is that now and in years to come, this strategy — if executed properly — can achieve a decisive competitive advantage. Everything needed to make that happen is in this book.
Here is a brief excerpt from Pat Lencioni‘s latest Point of View. To read the complete article and check out other resources, please click here.
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This is going to be a difficult POV to write, because making a case for the power of simplicity is no easy task. And yet, more than ever, I’m convinced that simplicity is the scarcest commodity among leaders, and probably the most important. Here are some good quotes that attest to this on a theoretical level.
Leonardo da Vinci said, “Simplicity is the ultimate sophistication.” Henry Wadsworth Longfellow once wrote, “In character, in manner, in style, in all things, the supreme excellence is simplicity.” Albert Einstein believed that “most of the fundamental ideas of science are essentially simple, and may, as a rule, be expressed in language comprehensible to everyone.”
And yet, in my consulting to organizations of all kinds, from high tech companies to churches to banks, I find that there is a natural tendency among managing leaders to add unnecessary complexity to situations, problems, descriptions and solutions. As a result, plans do not come to fruition, employees get confused, customers become disappointed and leaders are left discouraged.
So why do leaders do this? Why would they complicate their worlds and create problems for themselves and their organizations?
First, I have to believe that they don’t know that they’re doing it. Based on my experience, executives generally don’t like to make their own lives more difficult. But since that is exactly what they’re doing, there must be a powerful underlying cause. I’m guessing it has to do with pride, and usually the intellectual kind.
Think about it this way. When someone acquires a great deal of knowledge through education, either formally at a university or by reading voraciously about a given subject, it is natural that they’ll want to employ that knowledge. In fact, they’ll probably want to use it even if it’s not required, or for that matter, helpful. Otherwise, they’ll have to admit that all the time, effort and money they put into learning may have been something of a waste.
An example from outside the world of business might be helpful here. Consider a dietician who studies nutrition and exercise physiology for a number of years in school. People hire her to help them lose weight and get fit. Few people in her situation will be satisfied simply telling her clients to eat smaller portions, exercise every day, and avoid one or two particularly harmful foods. While that would be a more understandable, reliable and actionable solution than a complex combination of vitamins, supplements, pilates classes and underwater yoga, the latter seems to be a more common prescription if the magazine covers I see at the grocery store are any indication.
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To read the complete article, please click here.
Patrick Lencioni is founder and president of The Table Group, Inc., a specialized management-consulting firm focused on organizational health. He has been described by The One-Minute Manager’s Ken Blanchard as “fast defining the next generation of leadership thinkers.” His passion for organizations and teams is reflected in his writing, speaking, and consulting. Lencioni is the author of nine best-selling books with nearly three million copies sold. After several years in print, his book The Five Dysfunctions of a Team continues to be a fixture on national best-seller lists. The Three Signs of a Miserable Job, became an instant best-seller in the Wall Street Journal, New York Times and BusinessWeek. His later works include Getting Naked (2008) and The Advantage (2012).
The Wall Street Journal has named Lencioni one of the most in-demand business speakers. And he has been a keynote speaker on the same ticket with George Bush Sr., Jack Welch, Rudy Guiliani, and General Colin Powell. Pat’s work has been featured in numerous publications such as BusinessWeek, Fast Company, INC Magazine, USA Today, Fortune, Drucker Foundation’ Leader to Leader, and Harvard Business Review.
As a consultant and speaker, he has worked with thousands of senior executives in organizations ranging from Fortune 500 corporations and professional sports teams to universities and nonprofits, including Southwest Airlines, Barnes & Noble, General Mills, Newell Rubbermaid, SAP, Washington Mutual, and the US Military Academy at West Point, Bain & Company, Oracle Corporation, Sybase, Make-A-Wish Foundation of America from 2000-2003. Pat lives in the Bay Area with his wife Laura and four boys.
“Vision without execution is hallucination.” Thomas Edison
According to William Ferguson, “After interviewing the eleven titans for this book, and based upon my knowledge of and interaction with many others, I found a blueprint – a recipe of behaviors and attitudes, if you will – that truly makes the difference…The common thread among them is the importance of service. Brands, technology, and processes aside, what makes [their] companies successful are the people who have customer contact, whether the customer is a patron at a dining table or a patient in a clinic.”
Although Herb Kelleher is not one of the eleven, this is precisely what the former chairman and CEO of Southwest Airlines has in mind when explaining his company’s extraordinary success: “We take great care of our people, they take great care of our customers, and our customers take great care of our shareholders.” Presumably all of the eleven “titans” agree. Ferguson suggests a major value that each personifies, although all great business leaders embrace these values to varying degree:
o J.W. (“Bill”) Marriott: Have fun at work
o William (“Bill”) Sanders: Be a student of the business
o Stuart Miller: Make your mark outside
o Noel Watson: Grow the bottom line — period
o Julia Stewart: Coach, mentor, and teach others
o Robert L. Johnson: Create value out of a vision
o Sam Zell: Be true to yourself
o Richard (“Rick”) Federico: Take a risk to do things differently
o Paul L. Diaz: Measure your progress at every step
o John Robbins: Be mindful of the shadow you cast
o William A. (“Bill”) Jensen: Make a 2 percent difference
These are among the dozens of business subjects and issues of special interest and value to me, presented as mini-commentaries within the narrative, also listed to indicate the scope of Ferguson’s coverage.
o Tapping the Wisdom of Titans (Pages 1-4)
o CEO Performance Objectives (15-16)
o An Exemplary Board of Directors (31-32)
o The Right Leader for the Right Time (48)
o The Seamless Transition (63-64)
o The Teaching Leader (76)
o Dealing with Risk and “Pilot Error” (93)
o Evaluating CEO Performance (107-108)
o Cultural Capability (122-123)
o The Strength of Being a Team Leader (130-131)
o Tough Times Call for Strong Leaders (143-143)
o Outwork Your Competitors (162-164)
In the Epilogue, Ferguson observes, “Entrepreneurs who become titans are able to assemble the pieces in such a way that the whole is a unique and value-added creation far greater than the individual parts…The transition from entrepreneur to titan also depends largely upon the culture that is built; in a very real sense it sets an expectation for behaviors and interactions, whether among employees or with customers. To a person, the titans profiled in this book could define their cultures in tangible terms that, not surprisingly, evoke excellence, commitment, integrity, attention to detail, and recognition that success can never be taken for granted.”
It is no coincidence that companies annually ranked among the most highly admired and best to work for are also annually ranked among those most profitable with the greatest cap value in their respective industry segments. Jim Collins writes about good to great companies. In this volume, William Ferguson examines good to great business leaders, entrepreneurs who became titans. Remember what you learn from them…and apply it.
Note: Occasionally I re-read a book published years ago simply for the pleasure of spending time again with a dear friend. That is especially true of this book. I envy those who have not as yet read it.
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The Practicalities of Philosophical Convergence
Yeh is one of several business thinkers who have learned a great deal from Sun Tzu’s The Art of War. In this volume, he rigorously examines “five strategic arts,” devoting a separate chapter to each of the five, focusing on those organizations and individuals that best illustrate the values which Sun Tzu affirmed more than 2,500 years ago. Here they are: The Art of Possibility (Medtronic, Grameen Bank, and Southwest Airlines), The Art of Timing (Royal Dutch/Shell, Intel, and Southwest Airlines again), The Art of Leverage (Wal-Mart, Dell, and yes, Southwest Airlines again), The Art of Mastery (Singapore, the U.C.L.A. Bruins men’s basketball team, and indeed Southwest Airlines again), and finally, The Art of Leadership (Coach John Wooden of U.C.L.A, Earl Bakken who co-founded Medtronic, and of course, Herb Kelleher of Southwest Airlines). When discussing his primary objective for JetBlue Airlines, CEO David Neeleman replied that he and his crewmembers (not “employees” or even “associates”) were determined to “bring humanity back to air travel.” That is one of Yeh’s key points in this book. He insists that the best organizations “have a soul and they find a way to make a profit consistently, while also serving the community.” That was a lesson which Neeleman learned during his brief association with Southwest Airlines. It is no coincidence that year after year, the companies identified by Fortune magazine as being “The Most Admired” and “Best to Work For” are also the most profitable in their respective industries.
What sets this book apart from so many others which have addressed many of the same issues is the fact that in it Yeh brilliantly correlates and sometimes blends Eastern and Western concepts of business success and personal fulfillment. Not only organizations but each of those within those organizations has a soul and must find (or be provided with) a way to achieve financial success while also serving the community. In essence, the “art of business” is really the art of having standard of living and quality of life in proper balance. The greatest leaders throughout human history have helped others to do so. Hence the importance of having VPV: vision, purpose, and values. A great leader inspires others with a vision and mobilizes them to pursue a shared future (the Art of Possibility); she or he initiates or responds effectively to change, especially to a crisis (the Arts of Timing, Leverage, and Mastery); and he or she can innovate constantly because values-driven leadership has developed and nourished both talent and integrity throughout the entire organization (the Art of Leadership).
According to Yeh, in addition to having a soul which creates meaning for its people, a great organization must also “know where it is going and somehow always seem to flow with the changing world, arriving at its destiny in perfect synchrony. A great organization cleverly leverages everything in its environment, including competitors, to effectively and efficiently utilize its resources. It is also the master of its trade, constantly treading on the leading edge while maintaining effective balance. Finally, a great organization is made of leaders “who help to actualize the organization’s vision by aligning their dreams to it.” Long ago, a 12th century French monk, Bernard of Chartres, (not Isaac Newton) suggested that all of us are able to stand atop the “shoulders of giants.” Today’s great leaders are those upon whose shoulders we and others will be privileged to stand in years to come.
“We take good care of our people, they take good care of our customers, and our customers take good care of our shareholders.”
Former chairman and CEO of Southwest Airlines, Herb Kelleher, provided the title for this review and Bill Schley fully agrees with him about having an employee-centric organization within which everyone is customer-centric. It is no coincidence that many of the same companies that are annually ranked among the most highly admired and best to work for are also annually ranked among those that are most profitable with the greatest cap value in their respective industry segments.
The thesis of this book is that the Accelerated Proficiency system creates employee evangelists who are UnStoppable entrepreneurs. What is especially interesting about this system is that it can be successful in any organization, whatever its size and nature may be. Moreover, those whom I characterize as “evangelists” can be developed at all levels and in all areas. As I read the first chapter, I was reminded of Jack Welch’s comments during one of GE’s annual meetings when he then served as its chairman and CEO. He responded to this question: Why do you admire small companies so much?
“For one, they communicate better. Without the din and prattle of bureaucracy, people listen as well as talk; and since there are fewer of them they generally know and understand each other. Second, small companies move faster. They know the penalties for hesitation in the marketplace. Third, in small companies, with fewer layers and less camouflage, the leaders show up very clearly on the screen. Their performance and its impact are clear to everyone. And, finally, smaller companies waste less. They spend less time in endless reviews and approvals and politics and paper drills. They have fewer people; therefore they can only do the important things. Their people are free to direct their energy and attention toward the marketplace rather than fighting bureaucracy.”
Presumably Schley would agree with Welch while emphasizing, also, the shared faith these people have in themselves, in each other, and in the organization within which almost all limits on personal growth and professional development are self-imposed. He would also stress the importance of persistence, perhaps even tenacity, citing a distinction made by Eric Jacobsen, a successful entrepreneur: “The difference betweens and everybody else is: the entrepreneurs are simply the ones who step up to the plate; successful entrepreneurs keep swinging.” I would add courage, what Jack Dempsey had in mind when suggesting that “champions get up when they can’t.”
These are among the dozens of passages that caught my eye, also listed to indicate the scope of Schley’s coverage.
o The Four Steps for Accelerated Proficiency (Page 34)
o Three Master Principles of Accelerated Proficiency (36-38)
o “Fear’s Unwelcome Cousins”: Risks, Failures, and Obstacles (46-52)
o True Team: The Number One Fear Tamer (58-59)
o The Optimizers Versus the Entrepreneurs (73-75)
o Everything You Need to Know about Ideas (80-91)
o The Law of the Laser (100-103)
o The UnStoppable Six (111-115)
o Business Planning: Make the UnStoppable Six Your Template (116-117)
o Your Dominant Selling Idea (124-130)
o The Roots of Small, Super-Powered Teams, and, True Teams (137-141)
o Big, Simple Cultural Symbols (143-145)
o True Teams at Rackspace: The Untold Story (145-148)
o Succeeding with Customers, and, Customer Psychology (152-157)
o What’s Measured Is What Matters: The Net Promoter Score® (158-160)
o The Five Universal Steps to Selling (184-195)
The Accelerated Proficiency system is best explained in context, within the narrative, but I feel comfortable pointing out that (a) almost anyone in almost any organization can develop this proficiency that includes completing a four-step sequence; (b) it is usually triggered by a major crisis, challenge, or opportunity; (c) it can help to achieve almost any objective and, more often than not, it proves to be the decisive factor for success; and (d) it requires mastery of certain “emotional mechanics.” (Be sure to check out Schley’s presentation of the “Emotional Mechanics Crash Course” in Chapter 4.) As he notes, “Accelerated Proficiency provides you with a Skill Set, a Rules Set, and a Power Set. These will enable you to visualize the whole process, get yourself to do it one time on your own, and repeat it at will.”
Better yet, as Bill Schley points out, supervisors can also use the system, within an accelerated time frame, to help direct reports as well as others for whom they are responsible to become Minimally Functionally Qualified (MFQ): to “get in motion, start doing, and effectively teach themselves.” If you are look for a comprehensive, cohesive, and cost-effective way to increase the percentage of workers who are positively and productively engaged in your organization, look no further. Here in a single volume could be, perhaps, all the information and counsel you need to achieve that strategic objective. I urge you to check it out.
Here is a brief excerpt from an article written by Halley Bock for Talent Management magazine. To check out all the resources and sign up for a free subscription to the TM and/or Chief Learning Officer magazines published by MedfiaTec, please click here.
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Don’t just tell your employees they’re your most valuable asset — show them. And get your CEO involved in talent management efforts to drive home the message.
Most organizations widely publicize the fact that talent is their most valuable asset — and that’s often true. But when employees see a disconnect between such claims and what actually happens behind closed doors, there are bound to be repercussions in engagement and retention. To avoid this, organizations must show, not tell, their people how they’re valued — and this can start at the top with the CEO.
[Halley offers three specific suggestions. Here's the first.]
Create a people-first culture. While there are many responsibilities a CEO can delegate, setting and reinforcing the culture isn’t one of them. Herb Kelleher, famed former CEO and co-founder of Southwest Airlines, understood this to a degree that many leaders still struggle to comprehend. By placing utmost importance on defining the culture and ensuring it had everything to do with his employees, he created one of the most successful airlines in history. Kelleher’s motto was, and continues to be, “You have to treat your employees like customers.” By treating them right, he could be assured that they, in turn, would treat the customer right.
Creating a people-first culture has more to it than just coming up with a catchy motto. A CEO must be committed to the employees at the deepest level. This means addressing their needs through increased flexibility in corporate policies, caring for the employee’s family by extending inclusive benefits and investing in their future by prioritizing promoting from within.
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To read the complete article, please click here.
Halley Bock is the CEO of Fierce Inc., a leadership development and training company that drives results for businesses by improving workplace communication. She can be reached at her firm.
In the writing skills course that we teach at Creative Communication Network, entitled Write Your Way to Success, we discuss how to handle e-Mails.
Most of our participants claim they write e-Mails as more than 85% of the type of writing they do on the job.
Obviously, writing e-Mails is often responding to other e-Mails.
And, the question is, do you control e-Mail, or does e-Mail control you?
Do you remember the Southwest Airlines commercials a few years ago, where a woman dropped a cake because she heard a “bing” on her computer, announcing an e-Mail? Or the one where the guy jumped over a cube wall to get to his e-Mail? They were exaggerated events, but not too far from reality.
You likely remember the synopsis of the book that I presented at our First Friday Book Synopsis entitled The Tyranny of e-Mail by John Freeman (Scribner, 2009). In that book, he presented a strong set of hints for writing and reading e-Mails, including scheduling a time to read e-Mails so that you concentrate on what you read and what you write, and so that you control e-Mail, instead of it controlling you. If you missed the original presentation, you can find it on 15MinuteBusinessBooks.com.
I thought this piece published on February 21, 2012 in the Harvard Business Review blog by Amy Gallo, entitled “Stop Email Overload,” was also provacative in the same sense. Click here to read the entire article.
Think about some of these principles. How much more productive would you be if you dictated when and how you went through your e-Mail? What if you decided how e-Mail fit into your day instead of jumping to check it everytime your computer beeped to tell you something new has arrived?
Let’s talk about it really soon!