Wether I’m a founder or a director or a team leader with my team I’m building something that serves someone which I can call “my customer”. We tend to forget for whom we are providing our products or services.
This morning I had a short conversation with the bus driver. I usually need to scan my ticket to validate I’m allowed to take the bus. Those scanners are broken quite often (which is another interesting topic to write about 😃) as it was this morning. So, I said to the driver: “It’s broken, isn’t it?” “Yeah it is, unfortunately. But no worries, just get in.”
I was a bit surprised about the moment and had to figure out why. I realized this bus driver was really polite. When was the last time I did interact with a bus driver not being annoyed by people? Here he was, just a very nice bus driver. He was old, maybe in his late 50s or early 60s.
Companies exist for a mission – doesn’t they?
I’m making this up a bit now because I do not really have enough data to proof it, but I think people who are older received a better communication what their job is about. The senior management knew their company exist for a purpose and everything needs to be aligned to such purpose – the organizational structure, the processes and people need to understand their role in that overall purpose.
A bus driver’s job is to bring people safely from A to B and let them have a good experience about the ride. A woman working in a bank is supposed to make opening a bank account a pleasant experience so they share it with friends. A man in a man’s clothing store is supposed to help me to find a suit that suits me well.
A company exist for a purpose. It has a mission. Usually this purpose is to solve a problem of a customer whether it is a person or a company. When you meet the people at the forefront of such companies you can really see how they’re infected by such purpose. And that’s usually a great moment of customer experience. Young companies keep that mission alive as if it is still their first day.
If I have a great customer experience I will naturally share it with other people. Nowadays even more than ever because it is easier to share experiences with many people but also it seems like those type of experiences are fewer.
Executive’s focus change to revenue and costs – is that healthy?
In a lot of companies over time the focus shift from their initial purpose to revenue and costs. It’s nothing bad about making money and controlling your costs. When you find a problem worth solving and have a great solution for it, you should also consider how to make money with it and if the price would be accepted by customers for that particular solution. You need a reliable business model.
It’s more a question of priorities. Every person in the company needs to understand, why this company exist. What problem are we solving? For whom are we solving that problem? Do we earn the trust of our customers? Do we earn being paid fairly for what we do?
If we keep all those questions in mind then “The Score Will Take Care Of Itself” as Bill Walsh describes in his book where he explains his leadership approach as the coach of the San Francisco 49ers. With his leadership approach the team won the super bowl five times. His assumption was to just do the right things and then as a result you will win.
Over time companies tend to be more afraid of their revenue than about their purpose and that’s when it gets unhealthy. If sales no longer grow as usual or even decline, this is not a sign that the purpose of a company is lost, but a sign that the problem that was initially solved is now sufficiently solved or is better solved by others. It is time to look for a new problem or to work on new solutions.
When such things happen, it’s just a sign that we as a company have rested too long on the successes of the past and started thinking too late about new products and services: What is the next problem that we can solve, in terms of our mission as a company? With one companies mission there are always several problems to solve.
I remember that almost 30 years ago I learned at school that we would run out of oil today and that it would lead to great chaos. We were too dependent on this raw material for transport, electricity and heat. Obviously it didn’t happen this way. But now with the climate change we are faced with an even bigger problem.
We had 30 years to fix one issue that would have reduced the problem of the climate dramatically. But we haven’t. Change is expensive. And as long as you focus on revenue and cost you will never lead through such a relevant change.
But the need for change piles up over time and so do the costs related to this changes.
The automotive industry in Germany is an example for such behavior. Our cars are loved worldwide: Mercedes, BMW, Porsche. The world loves our cars. They are comfortable and fast. We invented the automobile (Carl Benz and Gottlieb Daimler). Why? They wanted to build a vehicle that could drive “independently“, without horses, to allow more people mobility.
For 30 years we have known that we must say goodbye to combustion engines. We know that all our mobility depends on it. And we do nothing. Because it costs something. We have lost the vision of providing mobility for all and are focusing on our own sales and profits.
In the end not only the automotive industry in Germany suffers, but since 25% of the German employees work directly or indirectly for the automotive industry, the whole nation suffers.
Now other automobile companies, such as Toyota or Tesla, which have been dealing with alternative engines for many years, are entering the field. We smiled at them for a long time and now they are increasingly taking over the leadership of the entire industry. We just slept through it. Our own interests outweighed the interests of our customers.
It is not healthy to pursue turnover and profit as top priorities. In the long run, this will have trade offs. But if we have the customer as our top priority, then we feel better when requirements and needs change and we can respond to them better, are prepared for them earlier and can tailor our products and services better to our customers again.
Customer’s expectations change – stay curious about it and be obsessed for customers
One thing I love about customers is that they are divinely discontent. Their expectations are never static – they go up. It’s human nature. … People have a voracious appetite for a better way, and yesterday’s ‘wow’ quickly becomes today’s ‘ordinary’.Jeff Bezos, CEO of Amazon, Letter to Shareholders 2017
I used to buy movies until I could rent them in a store until I could rent them via an online supplier until I could just stream it from Netflix. The experience got better and better for me as a customer.
I used to have a great experience in a retail store when I bought clothes. I’m still willing to pay a higher price on clothes when someone helps me find the right clothes. I just recently went into a jeans store to buy one jeans. I took two jeans, two sweaters and a shirt. I just had a great experience and this is rare nowadays.
What does a customer satisfy? It seems to me such question is asked way to rarely. And maybe your people at the front know really well, but do you ask them? Do you encourage them to make the customer experience better? Do you encourage them to create ideas how to serve customers needs better?
The bigger your team or your company gets the harder it will be to transport the vision to everyone. Your people on the front line who interact with customers on a daily basis always need to know what problems the company wants to solve. They need to always remember what’s the companies vision. This is the only way they can properly structure and focus their own work.
They also need this to be able to better assess where the company is not solving the problems well at the moment. Furthermore, they must have the opportunity to share this information with the company.
People on all levels have to make decisions everyday. The more guidance you give them upfront the more decisions they can make on their own and never need to ask their manager or higher levels in the organization. The more decisions people can make on their own, the quicker your organization can react on certain market conditions.
How to put customers first
Problem understood but now how can we really put customers first? How can we act on it? First, we need to make clear why our organization exists. Second, we need to constantly communicate that mission to all levels of the organization. Third, we need to implement feedback loops so that when we lack to deliver what we promised we get to know this and can act on it and failures are not repeated. And fourth, we encourage everyone to invent & simplify.
So, let’s dig deeper in every topic.
(1) Make the organizations mission clear
Why does this organization exist? What would the world miss, when we wouldn’t exist anymore? How and to what extend is your company making a difference in the world?
This is not an easy question. But if you aren’t able to phrase your mission how should your sales people know? How should your support team know? How should your business development team know or your marketing team?
In his legendary video at TEDxPuget Sound (back in September 2009) Simon Sinek explains how great leaders inspire action by defining the Why? of an organization:
A companies mission statement is the companies purpose described in a nutshell. It’s describing the Why of your organization.
Here are some mission statements from different companies. Review them for yourself and ask yourself which of those would inspire you as an employee working daily in such organization and making a difference in every customer or team interaction:
The mission of the Office of the United Nations High Commissioner for Human Rights (OHCHR) is to work for the protection of all human rights for all people; to help empower people to realize their rights; and to assist those responsible for upholding such rights in ensuring that they are implemented.United Nations High Commissioner for Human Rights
Tesla’s mission is to accelerate the world’s transition to sustainable energy.Tesla
Our mission is to organize the world’s information and make it universally accessible and useful.Google
When Amazon.com launched in 1995, it was with the mission “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” This goal continues today, but Amazon’s customers are worldwide now, and have grown to include millions of Consumers, Sellers, Content Creators, and Developers & Enterprises. Each of these groups has different needs, and we always work to meet those needs, innovating new solutions to make things easier, faster, better, and more cost-effective.Amazon
The Company is committed to bringing the best user experience to its customers through its innovative hardware, software and services.Apple Annual Report Oct 2016, chapter “Business Strategy”
We are one of the biggest producers of premium cars and the world’s biggest manufacturer of commercial vehicles with a global reach. We provide financing, leasing, fleet management, insurance and innovative mobility services.Daimler
Siemens is a global powerhouse focusing on the areas of electrification, automation and digitalization. One of the world’s largest producers of energy-efficient, resource-saving technologies, Siemens is a leading supplier of systems for power generation and transmission as well as medical diagnosis. In infrastructure and industry solutions the company plays a pioneering role.Siemens
When you formulate your mission think of customers reading it. Is the mission inspiring customers?
Review your mission statement if it is still relevant 10 years from now? How about 50 years or 100 years?
Your mission statement should inspire customers and your employees. It should be relevant for the long term even if the products and services your organization is providing most probably aren’t relevant anymore 50 years from now.
(2) Transport this mission statement into every department and to every single person – constantly and forever
You never just define your mission statement and then hope everyone will get it. You never ever stop to communicate it. When you do it you need to translate it to their everyday lives. What does Tesla’s mission “Tesla’s mission is to accelerate the world’s transition to sustainable energy.” mean for a line worker or for sales guy in the shop?
Amazon has a very helpful approach to constantly communicate the mission and its meaning to the organization. It’s the Leadership Principles. You find management and staff to quote the Leadership Principles in their daily communications.
These 14 Leadership Principles are:
- Customer Obsession
- Invent and Simplify
- Are Right, A Lot
- Learn and Be Curious
- Hire and Develop the Best
- Insist on the Highest Standards
- Think Big
- Bias for Action
- Earn Trust
- Dive Deep
- Have Backbone; Disagree and Commit
- Deliver Results
Every of these principles have a short description to give a bit more guidance. Those Leadership Principles should help every employee to make decisions on a daily basis that match those principles.
Saddleback Church where I volunteer in leading the Production Team for the Berlin campus has established a set of values which describe our heart and passion. The values together build the acronym S.A.D.D.L.E.B.A.C.K..
- Second Chance Grace Place
- All Nation Congregation
- Doable Faith
- Deliberate Pathway to Growth
- Love in Action
- Empowered Members
- Bold Faith
- Authentic Relationships
- Creative Outreach
- Kid & Family Focused
Many organizations put posters on walls stating the values of the organization. And then no one follows these values, no employee, no middle manager, and even none of the executives.
In this case you can also dispense the posters. Find a way to translate your mission into guidelines for each employee to follow when they need to make decisions, and then highlight on a daily basis how your decisions have been guided by these guidelines. In this way, the guidelines are not just empty words, instead the guidelines are breathed life into and they become actionable.
(3) Establish a feedback loop
If people understand the companies vision and mission and the guidelines to bring this mission to life, they can clearly see where the organization lacks to fulfill it or where it gets off track.
Let’s take the Amazon’s Leadership Principles as an example for teams that work at AWS. A developer might now see where his team doesn’t act frugal (10th principle). A sales guy may see in a customer conversation where he doesn’t work customer obsessed (1st principle) but focuses too much on internal processes. And when his team is involved in it he might write to the team:
“Guys, I just realized we lost #CustomerObsession in the way we handle the current opportunity. The customer is searching for [xyz] and we deliver him [abc]. So, lets get back on track and search for a better architecture to meet his requirements…”
Sometimes the feedback is relevant for managers or executives of a team or department. It should influence their decisions. So we need to establish mechanisms to share such feedback with managers or other departments.
The smaller a company the easier it is to transport feedback to everyone. Everyone has somehow contact to the customer. Everyone is customer-focused. Everyone is willing to establish changes to serve customers better, optimize products, services and the business model. The bigger the organization the harder it gets. Distances between people seeing a problem and people being able to fix the issue gets bigger.
The biggest problem is to prohibit failures as early as possible. Toyota established a methodology called “Stop the Line“.
Stop the Line manufacturing is a technique introduced by Taiichi Ōno in which every employee on the assembly line has a responsibility to push a big red button that stops everything whenever they notice a defect on the assembly line. … His idea … was that by fixing inefficiencies and problems as they occur what you’re doing instead of maximizing your existing process is actually proactively building a better one.
When he put this system into practice he found that some of his managers took his advice and some didn’t. The managers who implemented Stop the Line had their productivity drop by a shocking amount; they were spending much of their time fixing defects on the line rather than actually producing any goods. The managers who hadn’t listened thought this was a great victory for them, and I can just imagine them feeling sorry for poor Taiichi Ōno who would be ruined for having come up with such a horrible and wasteful idea.
Before long, however, something strange started to happen. Slowly but surely the managers that had spent so much time fixing defects instead of producing goods started producing their goods faster, cheaper, and more reliably than their counterparts to the point where the caught up with and then exceeded the lines who hadn’t made improvements. The initial investment in improved process and tools had paid off and Toyota went on to be quite successful using this method. Even today their engineers and managers share a cultural belief that their job is not actually to manufacture cars but instead to learn to manufacture cars better than anyone else.Lean Builds, 2009
This is a really good example of establishing a feedback loop. People at the front line realize quickly what’s going wrong. Now put some tools in their hand to make sure those failures will not be repeated and will be fixed as quickly as possible. Establish this “Red Button” in your organization and encourage the teams who really use this “button” and search for root causes and fix those to increase the overall quality of your products, services and company in total.
(4) Encourage every person to simplify and invent – in small and huge ways
When people know the organizations mission and they know the principles behind it, they see where the organization miss opportunities to satisfy customers. They also see where customer expectations change or where new problems evolve. They can see those things better than the leaders reviewing their dashboards.
Now, what if we build mechanisms that people seeing those issues can actually fix them themselves? There are problems that are easily fixable so we only need to encourage people to fix them in their team.
There are other problems where it needs more collaboration to fix the issue. Reasons might vary from the team seeing the issue has no permissions to change it, because the permissions rely on another team to the problem is a cross-functional issue which means several teams need to work together to fix the issue.
Sometimes it needs a whole new product or service to get customer satisfaction to a new level or to solve a new problem that came up with several customers. In this case establish mechanisms that gives people the opportunity to just build those products or services.
Google gives its people 20% slack time where they are supposed to work on projects and products where they think it could be beneficial for the company or customers or both. Products like Google Mail and Google Maps rose from such Slack time.
Amazon has established innovation processes where people with an idea write a six-pager narrative and get funds and support for the project from the senior management. Products like Amazon Web Services and Amazon Go were started by this.
The bigger a company gets the more it tends to protect what it has accomplished instead of reaching out for the next thing to build. We know those stories of companies like Nokia and Kodak who didn’t see the changes coming with smartphones or digital cameras. In 2007 Nokia were on the cover of Forbes with the title: “Can anyone catch the cell phone king?“.
This was almost five months after the announcement of the iPhone at Apple’s own Worldwide Developers Conference in 2007. Less than five years later Nokia was broken by Apple.
Jeff Bezos once wrote in his 2016 Letter to Shareholders: “Given a ten percent chance of a 100 times payoff, you should take that bet every time. But you’re still going to be wrong nine times out of ten.”
If you want to stay on track with your organization for the next decades this just means you need to take some serious bets. Although the payoff might be 100 times of your initial investments those payoffs come later, maybe five or even ten years later. The bigger your company gets the more bets you need and neither you nor your closest leadership team can come up with all those ideas to bet on. You need the whole organization to think big and come up with amazing ideas.
Encourage them, and establish mechanisms that support to bet on good ideas. And understand you will not always see it as a good idea. Sometimes you have to disagree and still commit. This is how Jeff Bezos continues to describe it:
This phrase will save a lot of time. If you have conviction on a particular direction even though there’s no consensus, it’s helpful to say, “Look, I know we disagree on this but will you gamble with me on it? Disagree and commit?” By the time you’re at this point, no one can know the answer for sure, and you’ll probably get a quick yes.
This isn’t one way. If you’re the boss, you should do this too. I disagree and commit all the time. We recently greenlit a particular Amazon Studios original. I told the team my view: debatable whether it would be interesting enough, complicated to produce, the business terms aren’t that good, and we have lots of other opportunities. They had a completely different opinion and wanted to go ahead. I wrote back right away with “I disagree and commit and hope it becomes the most watched thing we’ve ever made.” Consider how much slower this decision cycle would have been if the team had actually had to convince me rather than simply get my commitment.
Note what this example is not: it’s not me thinking to myself “well, these guys are wrong and missing the point, but this isn’t worth me chasing.” It’s a genuine disagreement of opinion, a candid expression of my view, a chance for the team to weigh my view, and a quick, sincere commitment to go their way. And given that this team has already brought home 11 Emmys, 6 Golden Globes, and 3 Oscars, I’m just glad they let me in the room at all.2016 Letter to Shareholders
These days we need companies or teams that remind themselves about their purpose. What is our mission? What motivated the founder to start this company? What is the accountability of our team?
The world is changing quickly and todays products are getting irrelevant much quicker than decades ago. So it is more relevant to know the mission of the company and take the products and services of the company as a vehicle to fulfill that mission.
We also need to be aware about the fact those products and services get irrelevant soon, our mission doesn’t. So, what’s the next product or the next service to fulfill that mission. These are bets we need to take. And bets are expensive that’s why they are called bets. And the executive team will not have enough ideas for those bets. We need the entire organization to stay aware of the constant changes needed to fulfill our mission.
At Amazon we say it’s always Day 1 because: “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.” (2016 Letter to Shareholders.
If the people in our organization know the mission, they know they guidelines and they know they are encouraged to invent and simplify your organization will come up with a lot of ideas to bet on if this makes the world a better place and serve customers better.
So, let us remind ourselves about our roles as a team or as an organization, and let’s build great products and services and always put our Customers First.