There is no denying it: Victor Nichols leads a complicated business unit housed within an even more complicated company.
Nichols is the CEO of Experian North America, the largest arm of Dublin, Ireland-based information services group Experian. In his role, Nichols oversees an operation that generated $2.2 billion in fiscal 2011 revenue, with 6,000 employees across four business lines: decision analytics, marketing services, interactive and, its best-known line of business, credit services — for which Experian has gained notoriety as one of the three main consumer credit reporting bureaus in the U.S.
However, for all the complexities that exist in the broad spectrum of Experian’s services, Nichols says they are, at heart, a customer service company. At the most basic level, Experian serves the people who work for client companies. It’s a fact that Nichols tries to keep front-of-mind for everyone within the organization.
“Experian’s challenge is helping customers achieve quality growth,” Nichols says. “There are certainly a lot of pressures on businesses, whether they be regulator, economic or consumer market driven, but our clients still have to achieve quality growth despite those market conditions. For our team, it’s really about stepping back from that and figuring out how we can address the unique requirements of each of our clients, matching our many products and services to help them advance in the way they need most, in order to help them achieve that quality growth.”
To step back, Nichols and the staff at Experian actually need to get closer — they need to maintain close relationships with clients, develop a deep knowledge of the challenges they face and how Experian’s array of products and services can help them address those challenges.
It’s a mentality that Nichols says is a fundamental part of Experian worldwide, and something he and his leadership team have worked hard to promote throughout the North American unit. Ultimately, Nichols says, great client and customer service has to be part of your culture, or the philosophy will never take root.
Keep your ear to the ground
Like many large companies, Experian has a sales force that relies heavily on travelling to various markets and interacting with customers in person. It is a critical component to Experian’s business model, not only from a sales standpoint but from a customer relationship standpoint.
When you have a sales force that has its shoes on the ground in the various markets you serve, they will develop and strengthen relationships simply by driving around and making their presence known by clients and customers. Those interactions become a valuable window into the daily business life of your customers, offering a glimpse of their needs, their challenges and how you can best serve them.
The key, Nichols says, is to take those salespeople who meet with your customers every day and give them a voice within your organization. The relationship they’re cultivating will be of no use to you and your management team if you don’t give your sales staff a means of reaching you with their observations and suggestions.
“When you have a strong sales team that is out there every day, a lot of what you learn is going to come from those team members,” Nichols says. “You need to realize that, more often than not, they’re going to be the voice of the customer to you. That’s why it’s important that team members have a strong voice within the organization, that they have input regarding the innovation and the enhancements that you are going to make within the organization.”
Apart from the sales force and the other members of the Experian team that interact with customers in person, Nichols also places an emphasis on finding and maximizing other touch points between the company and customers.
“You have call center people, you have product people getting input,” he says. “We also conduct customer conferences throughout the year, both large and small in size, to bring customers together with our team to discuss what is going on with them. In addition, we have various panel discussions and webinars that take place with our customers. The things that you would consider solid business practices by any business today are the things we do. It’s really about developing a culture of engagement between your business and the customer. In our case, we have a strong vision aligned with those values, centered on customer care. If you can get that established, all of the other practices start to take hold.”
Advance the culture
A commonplace saying that has developed in the business world is, “A company’s culture isn’t what the leadership says it is, it’s what the employees believe it is.” If you want a customer-centric culture, you need employees who embrace and promote the idea, and are willing to put in the work to develop strong bonds with customers.
At Experian, prospective employees are measured for their cultural fit throughout the interview process. The acceptance of a job offer is quickly followed by rounds of on-the-job training in the work environment.
Nichols says finding the right employees who can serve as building blocks for a customer-focused culture is the result of a combination of factors. You need solid recruiting practices led by a human resources team that has a well-defined concept of the core values and mission of the organization. You need a thorough interview process, and you need a training program that promotes your values to new hires early and often.
“Finding the right people for your situation is a combination of many things,” Nichols says. “You are certainly recruiting for people who have those instincts that align with your values. But you can train for it as well. You can teach people to ask the open-ended questions and go through the processes that you need to go through to uncover a customer’s core needs.”
Training at Experian happens largely in the field. Though classroom learning has a place in a training program, Nichols says the best education is less on concepts and more about practice. With that in mind, he wants to get new hires at the customer-interface level to the interface point as soon as possible, gaining firsthand knowledge of what it means to stay in touch with a customer’s wants and needs.
“You can’t do this type of training in a formal, behind-the-desk, PowerPoint presentation kind of process,” Nichols says. “The training comes from real-life orientation, a structured program in which people can go around, meet their coworkers, get a sense of the larger organization that they are now a part of, and get them on the job as fast as possible with a supportive environment around them. It’s a type of ingrained interaction as opposed to a formal classroom setting.”
Nichols frequently leverages relationships within the company to help promote the culture. If employees are engaged and taught by their coworkers, they’ll develop a heightened desire to interact with others, and those habits will spill over into their customer interaction.
“At Experian, we benefit from a tightly-knit team,” Nichols says. “We encourage our people to come together, talk and educate each other. We encourage diversity of thought, and I think we’re brave enough to continue encouraging it. It’s necessary, because it brings together different individuals who have different perspectives, and that enables us to reach richer, better-informed decisions.”
To help foster internal interaction throughout the Experian organization, Nichols and his leadership team have put a number of programs in place to offer opportunities for interaction among employees.
“We have centers for creative leadership, helping to advance select individuals who are demonstrating an aptitude to progress in the organization,” Nichols says. “In addition, we’ve established enterprise business networks that are held for a great number of team members at all levels in every region. And along with that, we’ve formed a strong mentoring program. Each of those individuals has a seasoned mentor in their line of business. Through that program, they get far greater insight into the strategy and execution of the company.”
In an organization of thousands with a massive footprint, you might think Nichols and his direct reports are so far detached from the customer interface point, that what they demonstrate might have a relatively small influence on the how the company conducts its customer interaction at ground level.
In reality, Nichols and his team are cognizant of how much what they say and do impacts the culture of the organization, and the level to which it is adopted by those who do talk to customers on a daily basis.
In short, if you want engagement and customer service to be maintained as priorities, it needs to start at the top of the ladder.
“It repeatedly comes back to that high level of engagement from the top, having a management team that has strong skills, that knows the business,” Nichols says. “In our case, we have many leaders who have lived on both sides. They have been customers and consumers who have used many of the products and services we offer, and they are out there in the marketplace dealing with the team members who report to them.
“It all continues to be complemented by the formal processes as well. We have a periodic employee team-member survey, and we are very rigorous with how we approach that. We seek high levels of participation, soliciting opinions from team members on what they think is working best within the organization and what they think we could be doing better. We then develop action plans around that, and stay committed to those.”
Though the surveys provide a more direct way for upper management to stay in touch with the employees who work at or near the customer interface level, a much greater volume of information bubbles up through the organization from subordinates interacting with their managers. Nichols and his team keep those channels open and encourage their use, so that everyone in the chain of command hears the latest news and ideas, and stays focused on the latest trends involving customers.
“We have an organization that is constantly generating ideas, and they will bring them forth to the organizational teams, bounce it off of them, and they go through various processes to see what the business case would be for a given idea, and how it would manifest itself to be beneficial for the team or the clients. It’s really about selecting the highest-priority ideas and that are going to give you the greatest return and help your clients the most.”
Nichols and his team often don’t reject an idea outright. In many cases, an idea from the customer interface point can be used in some form or at some time. It might simply need altering to fit your current plans, or to be shelved for a later time when it makes more sense.
“It’s less about not moving forward, and more about moving forward with a new idea in phases,” Nichols says. “I would say that is almost always the case. Rarely does an idea go forward as initially conceived. You go through a structured development cycle and test it. We usually roll the product out in various markets where we think it will have the greatest ability. That’s the key, to make an idea successful, but at a pace that makes sense, both for the company and the clients you are serving.”
How to reach: Experian North America, (714) 830-7000 or www.experian.com
The Nichols file
Education: Bachelor’s degree in economics, University of California, San Diego; MBA, University of California, Berkeley
What is the best business lesson you’ve learned?
I’ve been lucky to learn a lot of different lessons from the leadership team here. What I’ve learned is that it’s good to care and it’s good to promote that diversity of thought, and you have to execute on your commitment. If you make a commitment, whether it’s for a customer or the community, or for our financial performance, you have to execute on that.
What traits or skills are essential for a business leader?
You have to demonstrate the same qualities that you’re expecting from the rest of the team, and that’s where that engagement and interaction becomes so important.
What is your definition of success?
Taking care of the customer by meeting their needs, helping them achieve that quality growth. Also, it’s about empowering them to make informed decisions, helping our clients to manage their customers, helping them to make smarter financial decisions and live better lives.
In addition, taking care of the team members, making sure their work equation is such that it enables them to be successful, while still having fun in the process.
Terry Cunningham knows that you need to have a compelling story for potential customers if you want their business. So when he joined EVault, A Seagate Co., around three years ago, his first objective was finding out how well the company’s story resonated with its customers and its 400 employees.
“We spent of time looking in the mirror and saying, ‘Well, would you buy it, and if not, why not?” says Cunningham, the president and general manager of EVault. “What’s not true about it? What is it that the customer would say, ‘I don’t really buy that story and here’s why’?”
Often, the problem isn’t that you don’t have a compelling story, but that you’re not communicating it correctly. Cunningham realized this was the case at EVault, which provides online backup and disaster recovery using cloud-based systems.
“So they had the right idea — the previous generation of the company,” he says. “It just wasn’t told in a way that had a broader market appeal.”
At the time, the company was serving only a small niche of industries that were legally required to backup their data anyway. But Cunningham knew that there was an opportunity to communicate to more consumers and markets that the cloud was a better way to handle their data protection and disaster recovery.
So how do you go about broadening the appeal of your story? Cunningham says the first step is floating the idea with people who may not think that they need your product.
“You begin with getting to the prospect that isn’t compelled buyers or compelled markets,” he says. “Go beyond the regulated industries that are required to do it and get to somebody that doesn’t care.”
Even if they seem unenthused at first, if you can open up a dialogue you will probably be able to identify some pain points.
“So now we get to the prospect or customer that at first doesn’t care that much because he thinks everything is OK, but then in the conversation, you discover that there are some challenges that they’re facing,” Cunningham says. “So OK, what’s the first problem you’re trying to solve, … what’s the second problem you have to solve … and so on.”
As you find these pain points, you can walk the customer through what a new solution might looks like and how a new story could meet them.
“Then it’s the usual sort of discovery process,” Cunningham says. “Let’s say we did have all of this. How much would you pay for it? When would you do it? What are all the other issues?”
Using this feedback, the company has been able to retool its story with pricing, packaging and other specifications that reach a broader spectrum of consumers. Now, Cunningham says the key to growth is being able to tell that story in a way that is simple and memorable.
“The early stage of that is to get out and tell the story and tune that story in the simplest possible way so that people can retell it,” he says. “If I give you the pitch, can you turn around and give it to somebody else easily?”
To help employees communicate it effectively to others, Cunningham regularly travels around to the company’s different offices to talk about the new story and why it is significant.
“The ultimate goal here is to communicate a story that gets told and retold by others, and we don’t have to keep doing all the heavy lifting,” he says. “If this is a better way, then eventually the world adopts it as proof that is really is a better way. You need everyone in your company to be able to communicate the story passionately and with the same enthusiasm.”
How to reach: EVault, A Seagate Co., www.evault.com or (877) 382-8581
The next best thing
When Terry Cunningham goes out to dinner, he loves to eat at restaurants that have paper on the table. That’s because when the whiteboard is out of reach, he has a spot to sketch out the next great idea for his technology business.
“They used to deliver crayons for the kids, now they deliver crayons for people like me to draw pictures while we’re talking about something,” he says.
As you continuously recast the story of what your business means to customers, you always want to be asking yourself, “What’s the next step?” even if it means sketching out the plan in Midnight Blue.
“[It’s] what’s changing from our customer’s perspective and how does it affect us to make sure that we’re not becoming irrelevant without even knowing it,” Cunningham says.
“There isn’t a technology company on the planet that isn’t sort of assessing where they’re at because the world is changing very quickly. So they’ve got to sort of reassess and figure out what the customer, target or prospect is looking for today.”
The key to long-term growth is to consider what the customer or the market is saying today, but never stop looking forward and innovating.
“I see a lot of companies and people I’ve worked with just chase the current model or market and they basically end up saying ‘me too,’” Cunningham says.
Britt Massing realized that his company needed to get creative if it was going to weather the turbulent economy in 2009.
“We could see that a lot of clients, instead of having four or five or maybe 10 orders a month, were going to one, two or three orders a month and constantly saying, ‘We might be having layoffs,’ or, ‘We’re trying to maintain our costs and cut costs etc. at this point in time,’” says Massing, president of The Staffing Resource Group Inc., which employs 93 contractors and a staff of 11. “That’s what we had to deal with.”
Today, the staffing company is one of the fastest-growing businesses in the Tampa Bay area. Smart Business spoke with Massing about how to use economic uncertainty as an opportunity to grow your business by better serving your clients’ needs.
What is the first step when you realize that your clients are struggling?
I think that a lot of companies didn’t react quickly enough to making changes. They thought maybe that renegotiating might not be the best thing for them. A lot of them also didn’t think about going back to as grassroots as taking a look at the income and the profit and loss report and thinking look at all the vendors and going back and talking with them.
The first thing we knew was that a lot of our competitors were going to be going out of business, and for us, it was if we make it through this, we’re going to be good. So what we did was we renegotiated with a lot of our clients our terms, and we also then renegotiated with almost all of our vendors.
We did one-year contracts where we’ve reduced our rates some. We were flexible when other companies were not flexible. We’ve listened to what our clients needed and if it worked for us from a business standpoint, we renegotiated until the turnaround started to happen for us. That was a big part of how we survived when a lot of other companies did not.
How do you stay aware of how to meet your clients’ needs?
We were asking our clients what they needed. Some clients, because of the technical aspect of our business, weren’t hurt as much as other clients, but the ones that were having some difficulties and asked us about flexibility, we decided what made good business sense and we ran with it.
Outside of that kind of strategic aspect, instead of not calling clients when they didn’t have needs at that time, we’ve maintained our relationships with everyone throughout that period. People would be like ‘You know you don’t need to stop by and say hello to us right now. We don’t have anything for you.’ Our response always was, ‘Well, we know you will in the future and when you do, we want you to remember us.’ We wanted them to know that we treat all of our clients like it’s a relationship and it’s a partnership. So we spent a lot of time staying in front of them. We’re in direct contact either via phone, e-mail, in person, breakfast, lunch, dinner etc., with our clients every week. We have a very grassroots effort to make sure that we’re constantly in touch and in front of all of our clients.
As the contracts had ended and then needed to be renegotiated, depending on how the companies were doing, we had opportunities to renegotiate our prices back to where they were or above where they were before; we’ve been able to do that as each contract has come up. A lot of them were experiencing the same thing that they had to do for their businesses as well. Many of the people that understood and partnered with us were going through it themselves, and for the most part, were very appreciative of what we did to help people get through those times.
What advice would have in employing this kind of strategy?
Don’t be afraid to ask for help. … We [the owners] are always constantly in communication and talking and bouncing ideas off of each other and taking that to the team. When the team is involved in any policy changes or any changes with the company, it gives them ownership of it and they take pride in seeing it through and making it happen.
We knew that we had to maintain the relationships because we work with what we feel is a great book of business and when we got with our team, we told them, ‘Every customer that we have will continue to get the same amount of service as they’ve gotten before and that’s what will happen in 2010 and beyond after we get through 2009.’
How to reach: The Staffing Resource Group Inc., www.srg-us.com or (877) 774-7742
In the late ’90s, Jim Griffith found himself among a group of young executives being groomed to lead a $2.6 billion company. With five senior-level employees at The Timken Co. — including the CEO at the time ? preparing for retirement, the succession process was in full swing. But what seemed like a great opportunity was soon lost on Griffith and his peers as the process progressed. They became increasingly aware of one alarming red flag.
“The bottom line was that the company technologically was the best in the world,” says Griffith, who is the president and CEO of Timken today. “Our products from a quality and reputation were the best in the world, and we couldn’t make any money. Our people from external validation were the best in the world, and we couldn’t make any money.”
As a result, the next generation of leaders found themselves harboring some serious doubts about Timken’s future as a profitable company.
“That’s a really troubling thing when you’re saying, ‘OK, I might have the chance to lead a Fortune 500 company and I’m not sure I want to, because it’s not making any money,’” Griffith says.
When he became president of Timken in 1999 — he was promoted to CEO in 2002 — Griffith and his top leaders embarked on what became and intense transformation to reorganize the company around its customers. Here’s how they took a 100-year-old company and reinvented it to make it profitable.
Define your value
One of the first things Griffith and his team recognized was that the company was organized around its products, a strategy that went back to its roots.
“What we concluded was that the company that was founded by Henry Timken in 1899 to manufacture his invention called the tapered roller bearing — effectively it’s a wheel bearing in a car — over the 20th century had become so product focused that we’d forgotten that the reason for being in business is to create value for customers,” Griffith says. “And when we then stepped back and said, ‘Where are the places that we create value for customers?’ they were very different than where the product-focused strategy drove us.”
One of the first moves the company’s leadership made was to restructure Timken around its markets instead of its products. Instead of having a bearing business and steel business, there was an auto business, an aerospace business, an industrial business and a precision steel components business, and the presidents were asked to focus on creating value for customers rather than maximizing sales.
“That led us down a learning journey of where does Timken really create value,” Griffith says.
The company went through a process of looking at each of its markets and asking, “How do we make money in this market?” and “What’s the value proposition?”
“Again, it was a real learning journey, because in some cases, what we found was we had to change the way we operated to be profitable,” Griffith says.
He and his team also utilized a rigorous marketing analysis to evaluate Timken’s relative profitability and relative differentiation in its current markets. One thing that they discovered was that while the company made great products, its products were valued much more in some markets than others.
“We make steel or we make bearings or we make gears,” Griffith says. “We make your car not break down. We make airliners land safely. We make jet engines more efficient. We make it possible to drill for oil 40,000 feet under the ground. That’s what we do. And there are some of those places where we were selling our products that you didn’t care. You don’t really care if you have a Timken bearing in your car, because the difference between Timken and our competitors is that if you have a Timken bearing, your car will last for a million miles. Now how many cars have you had that last a million miles? So we had competitors that were designing lower performance products, cheaper products, and putting them in those applications. And you’re happy with that.”
Early on, Griffith says the company had made far too many decisions about markets based on gut feel instead of analytics. But strategic marketing tools can be extremely valuable in helping you make decisions to guide the direction of your business.
“We learned a tremendous amount by going out and finding the best analytic tools for driving our marketing process,” he says. “When we finally did that, it made some tough decisions, like what to do with the auto industry, amazingly easy. I wish we had done that five years earlier.”
For Griffith, there were a couple of significant takeaways from the marketing analysis. First, Timken was at its heart a technology company. So to create value for its customers, the company needed to find the right technical problems to solve for them.
“When you are on an airplane, and you’re coming in for a landing and that tire hits the tarmac and it goes from zero to 160 mph in a split second, you don’t want anything but the best,” Griffith says. “So the difference is that we have maybe 15 percent penetration in the auto industry and we have effectively 100 percent penetration in landing wheels. And that learning about where are the places that Timken can create value was fundamental in most of the first half of the last decade.”
The challenge was finding ways to take the company’s core technical capability to market in a way that nobody else could and that customers would buy into — in other words, leveraging that differentiator to enhance existing products and services and expand into channels and markets where it can be competitive.
“In worlds of technology, we are the best in the world,” Griffith says. “Learning to translate that into business models and products that create customer value that’s differentiated was a critical learning for us.”
Part of that involved moving into markets or investing in areas where it could differentiate itself from competitors, such as aftermarket (replacement part) opportunities.
“The bearings in a car — one in 10 gets replaced over the life of a car,” Griffith says. “The bearings in a steel rolling mill get replaced every year. We spend a lot more time designing new products for rolling mills because there’s an opportunity for our technology to make them last longer in a way that is more valuable to the customer. They’ll pay for it and there is an opportunity to help that customer with replacement products.”
By investing in its industrial aftermarket segment, the company has grown that segment to $1 billion in sales.
“So our most profitable segment, we’ve grown five times and half of them are products that weren’t in our portfolio in 2000,” Griffith says.
The other piece is to exit markets in which you just can’t compete and be profitable.
Even though Timken was historically an automotive company, it could not get its auto market to make money on an ongoing basis. So in 2007, the company made a radical shift under Griffith’s leadership to transition out of the market. When demand for the auto market dropped in 2009, it also sold a large piece of its auto business to a Japanese company and made large cuts in auto support services.
“That put some cash in the bank for us and changed our profile,” Griffith says.
From a markets standpoint, the overall change in portfolio has been dramatic. Today, it includes markets such as mining, heavy transportation rail, heavy truck, the agricultural market and the international market.
“We went through that in every business that we have,” Griffith says. “The net result was we closed probably 30 locations around the world that couldn’t be competitive or needed to be more efficient or needed to be more effective. We built a half a dozen new locations in new markets where we were growing. So net we didn’t change the number of people but changed the structure of the way we operate. We radically changed our portfolio and radically changed our market portfolio.”
Again, the key to growth is not just investing in markets where you have the best product, but where you can deliver value in unique ways.
“Most of the products you’re going to see are things we made 10 year ago,” Griffith says. “But the way we take it to market, the mix in the portfolio and the way that we engage with customers to create value is so radically different, you might as well say it’s a new company.”
A critical driver of this transformation has been the company’s dedication to being a high-performance organization. This focus has helped it navigate numerous challenges as it implemented some major changes to reinvent the company, such as when the company’s leadership realized that Timken’s big manufacturing plants in the United Kingdom and Columbus, Ohio, couldn’t compete and needed to be shut down.
“The key to it was strategically, we were very clear where the company was going and so we knew what were the areas that had to be sustained were and what were the areas where we were going to reduce our presence,” Griffith says. “When you think about it in those terms, you take deeper cuts in the areas that you are exiting and lesser cuts in the areas that are crucial.”
Another critical time was in 2009 when demand for the company’s products dropped and its sales fell 38 percent. To improve efficiencies, the company had launched a business redesign process called Project ONE a few years earlier, which put in place an SAP enterprise management system and helped it take $400 million out of inventory in 2009. But at the same time, it still had to cut costs in any way it could, including 6,000 jobs globally.
“The concept of walking into plants that have been part of your family for a long time and saying goodbye to people is a very personal thing,” Griffith says. “The way it works at Timken — you hate to say that you become good at that — but we’ve become very good at that. We’re very open, and people understand the performance that’s going on.”
When cutting costs, Griffith says you start with strategic cuts — areas where you know you are going to lose business — and then use your performance management systems to put boxes around your stars and take deeper cuts in areas where you have low-performing people. You approach these decisions as a family, communicate openly about what’s going on, and then people will understand that as a high-performance company you need to set aggressive targets.
“It’s all about people, and having really good leaders in place is crucial, even more crucial when you’re going through a period of crisis,” Griffith says. “There’s a natural tendency, particularly in a family kind of culture, to try to support and sustain people who aren’t the absolute top people. There’s always a tendency to hang on to people too long. That’s good and bad. But from a performance point of view, that’s critical from this point.”
By transitioning into markets where it adds the most customer value and building business models that allow it to be profitable in those markets, the company has emerged a decade later outperforming its highest expectations, growing revenue 29 percent to $4.1 billion in 2010. In 2000, Timken generated roughly 50 percent of its revenues from bearings and steel in the automotive industry. Today that number is about 15 percent.
“It’s 112 years old, but it’s a new company,” Griffith says.
“We’ve retained our best people. We have shifted the portfolio of the company to much more attractive markets, markets with better aftermarket, better growth practices, more focused on the parts of the world that are growing. We have better management tools — this Project ONE capability. So better people, better markets, better management processes and then you are surprised that we’re getting record results.”
How to reach: The Timken Co., www.timken.com or (330) 438-3000
The Griffith File
President and CEO
The Timken Co.
Born: Palmerton, Pa.
Education: B.S. in industrial engineering and MBA, Stanford University
What is one part of your daily routine that you wouldn’t change?
I am an early bird — up at 5:00 a.m. or before every morning. I savor the quiet time before the family gets up — I usually walk the dog or exercise. It gives me an opportunity to think through the day ahead and be prepared to tackle whatever challenges it brings. I have done this since I was around 10 years old and continue to get up early, seven days a week.
What is your favorite part of your job?
Interacting with the people of Timken. I get to travel a great deal and interact with people all over the world. The people of Timken never cease to amaze me. Give them a challenge, hand them a tough assignment, and it never ceases to amaze me the creativity, resilience and character of the people who make up our company. My wife loves it when I come back from our plants because I always have a smile on my face, impressed with what I see. The most outstanding examples come in the most trying times — for example, in the recession of 2009, one plant in South Carolina needed to cut half of its workforce. Instead, the people decided that they should share the pain and chose to work alternate weeks, an impressive sacrifice by the most senior people. I could tell a hundred stories like this.
What’s the best piece of business advice you’ve received?
I’m a believer in people. I believe in people. I’m a natural delegator. And if you’re a natural delegator then you’ve better surround yourself with the best people that you can find, people whose judgment you trust, and set the parameters, set the objectives back to being aligned on the strategy. This is where I get real sensitive about, ‘Look what Jim Griffith’s done at Timken, because it isn’t what Jim Griffith’s done at Timken. …The sum of the decisions and capabilities of that leadership team is massively larger than the influence I could have. My influence is to get them aligned in terms of what that vision and objective is. Then frankly it’s stay out the way so that I don’t mess up the decisions that they make.
What is the culture like at Timken?
The answer is it is a family culture. For those of us that have been around a long time it’s kind of an emanation of the fact that the Timken family started it. But that’s not what makes us a family culture. What makes us a family culture is we tend to be people who come here, stay a long time, get to know each other, know each other and their families, work together on things outside. So we really are a very close-knit culture. Even people who come from outside become family.
1) Figure out where you create value.
2) Structure portfolio for value creation.
3) Optimize your performance.
The United States economy has evolved into a service economy. Yet despite the proliferation of service firms, organizational marketing and sales tactics are still oriented toward product-based organizations. Selling a service is much more difficult than selling a product because services are far more intangible than products. Our challenge as service providers is to understand how to sell our services as products.
For service firms, words like customizable, knowledgeable and flexible solutions abound. But what does that mean? What are we customizing or making more flexible? How do we sell that concept in our market? How do we communicate and sell that concept within our organizations? How do you measure success against knowledgeable and flexible solutions?
One answer is to make our services tangible by thinking of them as products. We can start by building a standard product capabilities outline. This outline forces us to examine the services we provide in comparison to what our customers say they need. It also requires us to analyze the manner in which we provide our services.
As service providers, we need to take a close look at what we do for our clients and provide a tangible, repeatable response to their needs. The first step is to effectively define your client’s needs in terms of the nature of their work and the underlying issues they need to address. To address the nature of the work, you need to be able to articulate first at a high level what kind of work needs to be done.
The second part is more challenging. To understand client’s motivators, you need to determine what they would struggle with if they didn’t have you. Would they struggle with expertise or timing? Would they miss out on important growth opportunities or experience cost overruns? Once you understand what motivates them to seek your services, you can begin to productize their needs. As an example, my firm provides professional biomedical and clinical research support services to the government. When we examined what our clients really “needed,” we realized that it wasn’t as easy as providing people to perform research. Our government clients “needed” minimal downtime. In essence, the government wants us to provide and retain qualified research personnel in a timely manner. They also want minimal distractions to occur during the course of the research, which means we need to ensure services are not interrupted due to personnel issues, equipment failures, or lack of communication within our organization. Understanding our clients “need” (in this case, minimal downtime) has helped us to focus on the critical aspects of what and how we sell our services to them.
Once you have the overarching need defined, you’ll want to convince your customer why you are a better choice than your competition. This is where terms like flexible and customizable play a role. Your firm’s strength is in how you deliver your service. It is important to show the client that you have repeatable processes that generate positive results.
The final step involves setting yourselves apart from your competition. Once you have a tangible solution developed, it is much easier to illustrate exactly how your firm is different and better because it will be grounded in tangible statements that apply to your client’s business.
Victoria Tifft is founder and CEO of Clinical Research Management, a full-service contract research organization that offers early- to late-stage clinical research services to the biotechnology and pharmaceutical industries. She can be reached at firstname.lastname@example.org. Clinical Research Management’s director of business development, Lori Gipp, assisted in the writing of this article.
Natural organisms have sensors to help them survive in the natural world. Sidney Winter of the University of Pennsylvania points out that some moth species can detect the sonar of bats. To avoid becoming a bat snack, a moth initiates evasive aerial maneuvers to survive yet another day in the competitive animal kingdom. However, in the environment of your family’s living room, these same moths can't detect the sound of a rolled up newspaper whizzing toward them.
Just like nature’s organisms, manmade organizations may have highly developed sensors that help them survive in a competitive marketplace. The key is to make sure that the sensors you use are appropriate for your marketplace and for gathering useful information. After all, if organizational sensors aren’t properly tuned to your environment, your business will take the hit.
Having effective ways to get feedback from customers or clients is critical to the success of any organization that wants to sustain itself for the long term. Your customers or clients are expecting you to help them in some way; you’re making a promise of some kind to them. It’s critical to know how well you’re doing. It’s imperative that you know what your customers perceive that promise to be and that you know how well they believe you’re fulfilling that promise.
Some organizations have sophisticated tools that use technology to gather critical data. In his book, “Business @ the Speed of Thought,” Bill Gates describes Jiffy Lube’s extensive customer database that helps them track customer needs and behavior. Other organizations may decide that a brief survey or phone conversation is sufficient. The key is to know your customers and marketplace. Is your marketplace a cave or a living room?
In considering how to “know thy customer,” it may help to ask yourself the following questions:
- How do I determine from those who matter most (our clients) whether or not we are fulfilling our purpose as an organization?
- How do I know whether or not our clients believe we are helping them in the way we promise?
- Should we hire a third-party consultant to provide objective analysis of client input?
- What will we do with the feedback and input we receive from our clients? Are we committed to act on even the most critical comments?
- How will we let clients know the action we have taken in response to their input? What action can we take immediately on the “low-hanging fruit?” How will we analyze suggestions that require a significant change in our business model?
- How will we use the input we’ve received from clients to develop ongoing communication with them?
- How will we identify our most loyal clients, find out why they’re loyal and show our appreciation?
- How do we enable our front-line employees to respond quickly and effectively to client concerns?
- How will we track the results of any changes we make in response to client input?
- What are we doing to avoid becoming the moth in the living room?
In answering the last question, it’s important to inquire of your clients how their needs are changing and, if your clients/customers are businesses, how their industry is changing. How have their needs changed during the last year? How do they see their needs changing during the next year and beyond? And then ask them how they think you can help them as they adapt. If your clients are businesses, are there ways you can help them avoid becoming the “moth in the living room”?
By answering these questions honestly and implementing effective ways of addressing the answers you receive, you will know your customers better and drive the growth you want and the profit you need.
Andy Kanefield is the founder of Dialect Inc. and co-author of “Uncommon Sense: One CEO’s Tale of Getting in Sync.” Dialect helps organizations improve alignment and translation of organizational identity. To explore how to better align your culture, you may reach Kanefield at (314) 863-4400, by e-mail at email@example.com or at www.dialect.com.
Two months into his role as president of American Beverage Corp., Kevin McGahren-Clemens was looking at a company that had realized a $40 million loss. The 500-employee, $150 million beverage company was in a dire situation.
It was January 2009 when American Beverage’s parent company, Royal Wessanen, had trouble with its European business. In order to raise cash to focus on that area, the company decided it would need to sell its U.S. divisions, starting with its strongest, American Beverage. That April, American Beverage’s previous president left the company for a job with a competitor. McGahren-Clemens, who had been hired in 2006 to aid with some of Wessanen’s other divisions, was called on to run the day-to-day operations until American Beverage was sold. However, within a couple of days on site, he realized the business wasn’t in good shape.
“Due to poor fundamental management over time, results were becoming impossible to deliver so financials began to be increasingly manipulated to achieve targets,” McGahren-Clemens says. “No reliable financials existed, meaning no clear picture of profitability by product line, channel or customers existed either.”
Not only did the company have an unclear financial picture but prior management also had built an organizational structure with little involvement, communication or transparency with the broader work force and its focus as a consumer products company was wrong.
“The company had been managed for quite some time with a very short-term focus of delivering quarterly earnings instead of building any sustainable value for the long term,” McGahren-Clemens says. “Very little time or money was ever invested in consumer research or marketing as the organization’s focus was on short-term sales customers and not relationship building with consumers.”
The company was taken off the market and a turnaround effort began with McGahren-Clemens at the helm.
Evaluate the business
American Beverage’s previous president led the company behind closed doors. Since very little information was shared throughout the organization, McGahren-Clemens had to evaluate everything within the business to understand where to start.
“It was a situation where we really had to start from scratch because this person who was running the company, everything went through him and he was now gone,” he says. “In some ways it was easier that way. We literally just revisited and challenged everything. Basically, we just took the company apart over the next three to nine months to really understand what we had.”
Since a lot of information was unclear, McGahren-Clemens had to prioritize and become clear on the fundamentals.
“I put together a top 10 ABC priorities list, and that’s literally how I explained to everybody what we were going to do,” he says. “The first step literally was confirm and clarify financials because we had no idea what we were working with. Nothing was as it seemed. Things weren’t as possible as they looked and thoughts were not in the right place, and everything was manipulated. It was like driving a car that had no speedometer, no gas gauge, no anything, yet you had to operate it day to day.”
Establishing those fundamentals was critical, but the way to do that was to make sure everybody in the company was involved, which was not the way things were set up before.
“It was really getting everybody involved, breaking down walls between functions, making sure everybody was talking, making sure everybody had input, gathering information from everybody we could,” he says. “Everybody knew a piece, but they didn’t know how it all worked together. So it was gathering all the information and getting all the brutal facts on the table so that we could say, ‘What do we have? What do we go do?’”
When your employees are not clear about how the company is performing or what is truly driving the performance, you have to gather that information.
“It’s kind of a combination of doing your own analysis and getting as much information as possible and just objectively looking at it versus what does everybody think it is,” he says. “You have to look at customer lists, your profit by customer, your product line, what’s selling and what isn’t selling. In time, you really do have to contact all the people in the company who have knowledge and have more of a dialogue with them and try to pull out of them what’s working and what isn’t working. How else will you know beyond the numbers and what the numbers are telling you what’s working and what isn’t working? There’s no manual for gathering this information when it’s not clear what’s true and isn’t true.”
Before going any further, ABC needed a new senior leadership team to help turnaround the company.
“I started by first working on ultimately gathering the strongest senior team possible because you can’t do anything difficult within a fairly large organization alone,” he says.
“As we stand right now today, there’s only one holdover, which was the HR person. Operations, sales, marketing, finance, and IT all turned over. There’s usually a transition period like that because in a situation like this or anywhere, it’s hard to really attract the talent you want until you have some stabilization. You have to work with what you have, and that’s what we did for a while. As we began to get some stabilization and I had a better handle on the situation, I could go out and recruit people. I could very clearly explain what they’re getting into and, at the same time, explain the opportunity, which was fantastic because it is a lot of fun being apart of building something from scratch.”
The next step in the turnaround was to confront the brutal facts and communicate those throughout the organization.
“The key is being very objective about the state of the business absent biases about what it used to be or you want it to be — you have to focus on what it is now,” McGahren-Clemens says. “In my mind, this is the single most critical step in any recovery because nothing matters if you don’t fix the right things. Next, with the help and full buy-in of the senior team, you need to set very clear priorities as a team that, in turn, are clearly communicated to the entire organization in a very candid, transparent way. It is important to then create a true dialogue with everyone in the entire company by truly maintaining an open-door policy and walking around a lot to gain input, answer questions and dispel rumors. And then provide regular updates, both by e-mail and in person about your progress.”
To do this McGahren-Clemens met with 100 of the company’s employees one-on-one to gain a better understanding of what could be done and explain where the company needed to go.
“I believe the key is engaging everyone in an ongoing dialogue about how they personally fit into the big picture and why elevating their own game is crucial to our success going forward,” he says. “Once our situation had stabilized and moved out of crisis mode, since I only had around 100 salaried employees, I felt it important to sit down with each person individually for about an hour to connect directly. I would start by asking each person if they knew what had happened and why and whether they understood where we now were and what challenges we faced. Inevitably, people underestimated the seriousness of our situation, both past and present. Most importantly though, I would then ask everyone what performance barriers or morale issues they face plus what they thought we still needed to do to improve the company and our ability to complete a full turnaround and begin driving profitable growth.”
He had to be careful during this process not to scare his best employees away from the company but also make it clear that the company needed a change.
“From the very beginning, it was always challenging striking the right balance between creating a sense of urgency by explaining to people how dire the situation really was without being demoralizing or scaring people,” he says. “It’s a balance of painting a picture of, ‘This is a very, very challenging situation, but we can get out of this,’ and, ‘There is a lot of upside for people who help us with that.’ With the one-on-ones, you can tailor that message and tailor the questions much more specifically by reading the individual. How much do they understand or not understand? Some of them just had no idea how much the company made before or how little we made now or what the problems were. Some people want to know, and some people don’t want to know, and the reality is you’re trying to get a read on who those people are because that’s who you need going forward.”
To help get ABC to sustainability, McGahren-Clemens needed to find those individuals within the company who had the ability to be leaders.
“One thing I’ve always found to be true is, in general, there are some hidden gems within your organization that can move up to the next level,” he says. “Don’t immediately think you have to do everything externally. It’s going to be better if you can pull somebody from within who has some knowledge of the organization. Who’s acting without asking and doing the right things? When you really ask around and start to talk to people, they all know who’s who and who’s pulling their weight and who makes a difference and the same names begin to come up. You have to get out there and ask because it’s not going to be necessarily evident, but in times of crisis, it becomes a little more evident than normal.”
Now that a leadership team was in place, the right people were found and brought in, and progress was being made on understanding the circumstances of the company’s struggles, it was time to start putting plans in motion.
“It was very clear to me from day one that it wasn’t a situation where we could just cut our costs. It was about fixing the business and growing out of it. I believe all sustainable growth begins with a thorough knowledge of target consumers combined with engaged employees who have full access to information and the necessary tools to do their job — such as clear priorities and budgets — and none of those conditions existed.”
McGahren-Clemens had to switch the focus of the company from the short term to a long-term focus on branding and consumers.
“In the consumer marketing world of products, it always starts with spending, and there is a delayed gain on the profit because you’re going to have to invest first in market research to understand consumers, understand your competitors, understand what your product brings to the party, what gaps there are and its further investment to go fix those gaps,” he says. “We had products we had to improve the quality of. We had to add vitamins to our juice products, we had to change the packaging, we had to add benefits, and that’s time and money based on the consumer research. Then you have to go out to the market and support those products. Those are the basic steps that most brand companies do ongoing, but we literally had to start.”
Not only did the focus of the company need to change, but the employees needed to start thinking differently as well.
“It was getting everybody internally to understand that it is ultimately what the consumer thinks that matters, not customers,” he says. “Customers are very, very important, but those retailers and distributors care most about what the consumer says too. We had to go out and say, ‘We don’t know how good our products are. Let’s go do taste tests. Let’s get consumer thoughts.’ There were a lot of brutal facts that came up that you have to go out and be willing to hear. That commitment was something we had to build internally.”
With McGahren-Clemens’ leadership, the hard work of ABC employees and a renewed focus, the company has made a rebound.
“The company has been totally made over, and we have a great foundation from the ground up,” McGahren-Clemens says. “You can go in and renovate a house or you can take the whole house off and start over and that’s what we did. We know all the pieces and feel very good about the infrastructure and the talent and processes and the potential, and we feel we are just starting to scratch the surface. All of the investments we’ve made in consumer research, product enhancements, innovation and marketing the last three years are just starting to bear fruit.”
The journey from 2009 to today has been a long one. It took teamwork, communication and a unified focus to get there. The biggest key for McGahren-Clemens was to never let the task at hand bring him down.
“Don’t get too caught up in the enormity of the situation or the challenges or the tasks and just take it one day at a time,” he says. “Focus on ultimately where you want to be and know you can be and just work toward that. Trying to stop and think about how much has to be done can be overwhelming.
“I wish there was one clear formula or one sequential order of steps that would make it very cut and dried for people in a similar situation, but I liken it to a football game where you’re calling audibles along the way. You have a game plan, you practice it, you have a lot of ideas, you’ve studied your opponent, you know what has to happen, but the reality is you’re still going to have to make adjustments throughout. You have to be flexible enough to do that. You have to have a series of steps you’re ready to pursue and an order to them and a way you’re going to approach things, but you also have to be open to reading new information as it arises because it’s going to arise all the time.”
HOW TO REACH: American Beverage Corp., www.ambev.com
You need evaluate the business to understand what the problem areas.
Once you know the situation and where to start, communicate those facts to your employees.
Once you have buy in, put your plans in motion.
The McGahren-Clemens File
American Beverage Corp.
Born: New York City
Education: Studied economics at William and Mary and received a MBA from Northwestern
What were your biggest fears during the turnaround?
Looking back, I didn’t really think that much about it because it wasn’t productive. But if some of our biggest customers had said, ‘We’re not going to buy your product anymore.’ We wouldn’t have been able to get through the stabalization period. If Wessanen had not supported us and just decided to shut it down, but they did support us and were great throughout. Or if a lot of our talented people had walked out saying, ‘This is too big a risk. I don’t know how it’s going to turn out; I’m just going to leave.’ Any of those scenarios, particularly losing the talent we did have, would have been very damaging.
What has been the best business advice you’ve ever received?
I remember having a manager once where we were in a pretty bad business situation where things weren’t going the right way. We were managing a cheese business at the time and he just stepped back and said, ‘All right everybody, remember it’s just cheese.’ The whole room just burst into laughter. I’ve used that so many different times and kind of had to use it in this situation.
What is your favorite American Beverage product?
It would be the one that’s selling the best right now; the Daily’s Frozen Pouch. It really is a great product. I also like the Little Hugs. I buy cases of it for my kids and the whole neighborhood drinks it and I drink it as well.
If you could switch places with somebody for a day, who would you switch with?
It would be fascinating to be the chairman of the Communist Party of China right now. They are such a hybrid between old-line communism and new-age capitalism and there’s no script for what they’re trying to accomplish as they become a global power economically, but at the same time their social freedoms are lagging behind. It’s fascinating how that’s going to play out and I would love to understand all the different tensions within the country.
Some time ago, I accompanied one of Cincom’s sales reps on a lunch meeting with a customer. When the conversation turned to our products, I smiled as I reminded the sales rep that he should be sure to focus on all of the value that the customer would be receiving.
Surprisingly, the customer laughed and jokingly put up a fight.
“We know all about value selling, that’s the way we sell everything we offer,” he said. “But, when we buy, we want to talk price.”
The conversation continued for some time, focusing on how selling value was an important decision for a business to make. This customer recognized the great advantage of selling value as a feature because doing so helped them be successful at what they do. But, the customer put the mindset in even further relief when he told us, “Losers sell on price. We want to do business with winners.”
Value sellers may not win all the business, but they win all of the nicely profitable business.
Price sellers are bottom fishers. They only catch those that will jump at anything as long as it’s the cheapest option.
Unless a company is extremely large, or has some highly unusual low-cost capability, low-price sellers simply cannot be viable. Their profits, if any, are simply too slim to stay in the game.
Price sellers try to provide as many features, functions, quality and potential benefits as possible, but they also believe that price is considered to be a feature. Because of this, they price their products as low as possible to be advantageous for the customer and for the seller.
Price sellers focus entirely on themselves and their offerings and do not attempt to enter into the value discovery and value delivery process. They leave all of that to a buyer’s discernment and realization and lessen their opportunity to share in the economic value their offerings provide.
In one sense, price sellers underappreciates and undervalues themselves.
That’s why price sellers usually do poorly in the long term while value sellers continue to grow their large profits. The value sellers may not have any better offerings than the price sellers but the value seller gets intimately involved with the potential buyer, and in this way helps the buyer to discover, discern and realize a great deal of additional economic value and utility that might otherwise never be gained or achieved.
When our customer said that he wanted to “talk price” he explained that he didn’t mean he wanted to buy from price sellers. Instead, he meant that he wanted to maximize every possible aspect of the value they would receive from the product.
Value sellers are also better buyers because they are able to recognize the value they will receive from products can far exceed the price they may pay. If they didn’t, they wouldn’t make that buying decision.
Price should never be considered a feature. Low price should not be a favorable feature or an advantage when we try to sell. Instead, we should all commit ourselves to focusing on the value and the very great gains that we can deliver that can dwarf the costs.
Thomas M. Nies is the founder and CEO of Cincom Systems Inc. Since its founding in 1968, Cincom has matured into one of the largest international, independent software companies in the world. Cincom’s client base spans communications, financial services, education, government, manufacturing, retail, healthcare and insurance. http://tomnies.cincom.com/about/
Taking measures to promote employee wellness can save you money.
In fact, a comprehensive study showed that workplace health promotion programs resulted in a 25-30 percent reduction in medical and absenteeism costs, according to a report by the World Health Organization and World Economic Forum.
Kaiser Permanente, a leading health care provider and not-for-profit health plan, uses HealthWorks, a customizable work force health strategy, to help employers take advantage of their benefits and create a corporate wellness plan. Headquartered in Oakland, Calif., the organization added its 15th medical facility within Ohio last month.
“If (companies) make an investment in employee or associate wellness, they’re going to get a substantial return on their investment that not only helps their associates to be healthier but also improves presenteeism and improves the bottom line for their organization because they actually have happy and healthier associates,” says Joseph M. LaGuardia, vice president of marketing, sales and business development for Kaiser Permanente.
Looking to your health planner for guidance and resources is key in taking the first step toward creating a wellness program — identifying employee needs and setting goals accordingly.
For example, member companies of Kaiser Permanente can access a variety of tools such as onsite screenings of employees, worksite wellness activities and online educational resources with HealthWorks.
Also, talk directly to employees, says Carolyn A. Hodges, a HealthWorks consultant at Kaiser.
“Sometimes it’s as easy as polling them and really understanding who your population is,” Hodges says. “What are their health concerns? What would they be interested in?”
After evaluating the wellness needs and goals of your organization, create a committee to handle implementation.
“Developing a wellness committee is integral to the success of a wellness program because they are the ones who are passionate about health and wellness,” Hodges says. “They’ll be the ones to motivate their fellow employees. And if you can, draw on various departments so you have different opinions throughout the organization.”
Then begin enacting programs that further your goals.
“It doesn’t need to be a huge over-the-top initiative,” says Hodges. “Employers can take easy steps: posting hand-washing reminders or reminders to take advantage of free flu shots — just constant reminders. I think communicating to motivate is critical. (Use) different venues: in the lunchroom, through e-mail, making announcements.”
One of the most common wellness goals is weight management. In addition to fresh New Year resolutions, it’s a prominent concern because of its links to serious, sometimes chronic conditions such as diabetes, hypertension and hyperlipidemia.
Instead of addressing the negative and often sensitive issue of obesity with your employees, promote positive activities and lifestyle changes that will combat obesity, such as physical activity and healthy eating.
“Instead of a weight-management program, launch a walking program,” Hodges says. “Launch a physical activity challenge. Focus on healthy eating by providing them with a healthy nutrition library and ask employees to bring in fun recipes. Throw a weekly salad bar potluck.”
Creating programs is not enough — you have to get buy-in from your staff. To encourage employee participation, senior management must also actively engage in wellness programs.
“If the employer sponsors a ‘lunch and learn,’ a walking program or a potluck, the employer needs to be there,” Hodges says. “Bring a healthy dish, join a team, show up at the presentation. The importance piece is being physical to the employees. Walk around and talk to employees about how they’re enjoying the program.
“Making sure employees know you care about them and their health will lead to them being engaged in their own health and wellness.”
How to reach: Kaiser Permanente, (216) 479-5547 or http://businessnet.kp.org
A mental note
There’s a mental side to health in addition to the physical, says Joseph M. LaGuardia. Maintaining good mental health will keep your workforce invigorated.
LaGuardia, vice president of marketing, sales and business development for Kaiser Permanente, says to create wellness programs that are fun to engage employees.
“Do something that’s tied in with some of the nonprofits in town,” LaGuardia says. “There are organizations that will give employers guidance on that, like Business Volunteers Unlimited. They’ll actually help you conduct done-in-a-day projects. ... That type of thing helps employers make it more fun to come to work and enjoy what they do.”
Carolyn A. Hodges, a HealthWorks consultant with Kaiser Permanente, says to also give employees timeouts from work during stressful periods.
“If there’s a deadline approaching and you know everyone is stressed out, throw in a potluck or a relaxation event — and be a part of it — so you know that your employees know you care about them, and that they can take time away from the stressful environment,” Hodges says. “That’s showing appreciation for everything your employees are doing.”
How do you spell relief?
The short answer is: C-U-S-T-O-M-E-R L-O-Y-A-L-T-Y and E-M-P-L-O-Y-E-E P-E-R-F-O-R-M-A-N-C-E.
As leaders in business, we all struggle with how to find solutions to reduce the pain within our own competitive working environment. Building off of personal experiences, I have found that success comes from embracing a formula of unparalleled customer loyalty and exceptional employee performance.
The key to gaining customer loyalty and employee performance is to earn it. Talk is cheap. It is then up to us create a blueprint to excel in these critical areas. Ask your customers and yourself these 10 probing questions. If you then execute on them, you will be well on your way to success. Do it, and, yes, business will follow.
Know thy customer
Consider going out on a limb, sitting down with your customers and asking them these five questions (I refer to it as my annual “in-touch” initiative):
1. What is the most important thing you value of us as your professional service provider?
2. We pride ourselves on our extraordinary service. What’s the most extraordinary thing we have done for you over the past 12 months? Why did this impress you?
3. If we could improve just one thing to make our partnership even stronger and more meaningful over the past year, what would it be?
4. What is one thing we should stop doing and reallocate those resources to other areas?
5. We’re committed to creating a professional, yet family-like environment here. What would make you feel more part of our family?
The best time to ask customers questions of this nature is in a relaxed environment (e.g., not at a meeting or convention). Let the customer know in advance the purpose of your questions and how they will be used. Remember to thank them for their input. By reaching out to your customer and sharing the collective responses back to them, strong customer loyalty will follow.
Trust thy employees
Your employees/associates are the key to delivering extraordinary service, and those who are good at what they do, and love doing it, tend to drive customer loyalty. A successful customer-focused organization is one that is, first and foremost, client-centric. Here are five questions you might ask your employees/associates to get a sense of what might make them more satisfied, productive and enabled:
1. What do you love about your job?
2. What two things do you need in the workplace that will enable you to perform your job better?
3. What two obstacles can we remove to allow you to perform at a higher level, thus making your job more rewarding to you?
4. What makes you feel valued and a part of our workplace family?
5. What other responsibilities or jobs in the organization would you like to be involved in?
The answers to these questions will serve as a barometer of workplace effort, attitude and engagement. The CEO should openly share this feedback with all associates, comment on how it impacts business and what, if any, changes might be in the works based on the responses. While not all responses demand changes, all comments should be heard, recognized and considered.
Your employees are your eyes, ears and voice to the customer world. They are your idea generators, your efficiency experts and your image makers. Connect to them, know them and respond to them. An employee who feels listened to, supported and personally cared for will provide the same responses for the customer.
Relief from the challenges we all face daily will come in many ways. Consider these 10 questions on customer loyalty and employee performance, execute on them, and you will find that you are well on your way to an even healthier environment geared towards continued success.
G.A. Taylor Fernley is president and CEO of Fernley & Fernley, an association management company founded in 1886. Reach him at tfernley(at)fernley.com, or for more information, visit www.fernley.com.