You may have noticed my equation for just this situation, which I'm not shy about sharing on this blog, on Twitter, in my speeches, in my books, and really anyplace you find me. I call it the Three Legs Principle. In part, it goes like this:
LEADERSHIP + _______________ + _______________ = PROFITS
Take a look at that for a moment. What you'll notice is, there's this huge void between savvy Leadership and the Profits that leadership is aiming for.
In other words, no matter how sharp a leader you are, you can't get where you need to go without active buy-in and participation from your people.
The two missing pieces of the equation are CULTURE and CUSTOMER SERVICE. And the equation is in the order I present it for a very good reason. The Leadership has to come first - you, the top guy or gal, needs to get it or the whole show's over before it starts.
...Which explains most businesses. Clueless leaders abound, leaders who don't get that profits are the direct result of top-flight customer service. Most of the few who do get the customer service driver of profits don't value what is really driving the service, which is culture. And because these leaders don't understand culture, and so don't hold it in very high esteem, even these customer-service obsessed leaders don't see the point of throwing their effort into their company's culture.
Fortunately, there's one last cohort of leaders, the rarest of the rare, who have the vision it takes to bring greatness to their organization. They get it; they understand that Culture is where their energies have to lie if they're to affect true and lasting profitability and sustainable growth.
Let's say that describes you; and given that you're reading this blog at all, it probably does. Congratulations. You're in the top 1% of leaders in business today.
But there's still a good chance you're asking, "How do I build a culture of service? I get that five-star customer service is the only way to build a engine of lasting profits. And I understand that without a culture of service, that top level of service is never going to permeate my organization, and describe every encounter my customers have with my company, day after day and year after year. But how? How do we build a culture of service given the culture we have in place now?"
That, my friends, is what the next entry in the 21st-Century Business blog will explain. Stay tuned!
(And good news: while building a prosperous business is rarely easy, it is exceedingly simple.)
Spot on. The culture of (and delivery of) topnotch #custserv are intertwined.
ReplyDeleteAwait the next chapter/entry!
Well said! Your equation is, as Barry said, spot on. I look forward to your next post, I think a lot of leaders struggle with what culture is, let alone the relevance and how to build a service culture. What I like about your equation is that is as you say "exceedingly simple". At the risk of slightly diluting the significance of it's simplicity I would suggest leadership + corporate environment + customer service = profits. Where culture is one element of the corporate environment and the other elements are foundation, communication, community, transparency, awareness and values. These 7 elements are all tightly coupled and issues with one impact the others and all together they determine your potentiality. I recently explored these elements in a 7 part series. Thanks again Ted, great post.
ReplyDeleteWhere does honesty and integrity fit in?
ReplyDeleteTed,
ReplyDeleteI like the equation. In terms of the definition of "culture", I would expound on that (perhaps this is covered in your definition of 'culture of customer service') But to generate profits, we have to sell something that has a value to the customer that causes them to pay a price that exceeds costs (sorry for the Finance 101). So, with that in mind, "culture" also means a culture of understanding customers - their wants, needs, desires and problems; which then translates into the development of products and services that solve/address those needs, wants, desires, problems. Apple knows their customers (perhaps better than their customers know themselves, which is a bit creepy :), Amazon, eBags, Virgin, my local Dunkin Donuts. So, its more than just a culture of customer service. Its a customer-centric culture where everything the organization does focuses on customers wants, needs, desires and problems.
Do you buy it?
thanks
Barry
Thanks Ted. I must say, as a leader who teaches, you're in MY top 1%! So now I've got to wait for the "building a culture of service" post. It's not quite as difficult as waiting 3 years after the "Empire Strikes Back" to see if Han Solo survived, but it's certainly a close second!
ReplyDeleteTed, great article again. The equation certainly lives comfortably with me. The three prime goals I constantly preach:
ReplyDeleteSatisfy Team » Satisfy Customers » Make Money Now AND In The Future.
Satisfying internal as well as external customers is key in cultural shifts.
@Barry, I agree with you on customer-centric focus, however, never forget that as leaders we often see that what a customer wants is not necessarily what they need. Unless you were referring to the consumer world, in which case I 100% agree with you.
Great post here on developing an approach to this very topic (from the manufacturing industry) http://bit.ly/ckR8Jc
Ted,
ReplyDeleteYour formula will carry leaders to success. Would be interested to see how a sampling of leaders would complete the blanks in your formula before they read your "answers". It might prove very revealing.
As for building a culture of service to replace whatever is in place:
- Remove silos created by compensation schemes
- Create a "learning" culture that replaces blame with true accountability and innovation
-Empower, empower, empower!
Great post. Thanks for this unique formulaic approach.
Kate Nasser