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The real key to customer centricity: people taking care of people

When people inside a company are kind to each other, they will be kind to the customers. 

Harvard Business Review: Trust Your Employees, Not Your Rule Book, 2017-Apr-20 by Bill Taylor (new book, Simply Brilliant)

The entirety of the Nordstrom Employee Handbook fits on a single 5×8 card and involves exactly one rule. Here is Rule #1: “Use best judgment in all situations. There will be no additional rules.”

No wonder Nordstrom’s image and brand is built on heroic stories of above-and-beyond service and problem solving. Sometimes those stories even involve the airlines. In one case, an employee discovered that a customer had left her luggage (along with her flight itinerary) in the parking lot of a Nordstrom store in Connecticut. So he hopped in his car, drove her luggage to JFK, and reached her before the flight left. There’s no rule that can foresee that kind of problem or response!

Truth be told, life inside most giant organizations is much closer to the rules-obsessed culture of the big airline than the common-sense freedoms of a high-end retailer. Have you ever tried to explain your special family circumstances to a health insurance provider?

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Why the strategies of Google, USAA and Vanguard have been so effective

When we decide how we want to compete, we have to look at how we're going to fit into the market, both from our customers' point of view, as well as from our internal capabilities. 

Harvard Business Review: Strategic Choices Need to Be Made Simultaneously, Not Sequentially, 2017-Apr-3 by Roger L. Martin

The only productive, intelligent way to generate possibilities for strategy choice is to consider matched pairs of Where to Play and How to Win choices. Generate a variety of pairs and then ask about each:

  • Can it be linked to an inspiring, attractive Winning Aspiration?
  • Do we currently have, or can we reasonably build, the capabilities that would be necessary to win where we would play?
  • Can we create the Management Systems that would need to be in place to support the building and maintenance of the necessary capabilities?

Those "Where to Play" and "How to Win" possibilities for which these questions can plausibly be answered in the affirmative should be taken forward for more consideration and exploration. For the great success stories of our time, the tight match of Where to Play and How to Win is immediately obvious.

  • USAA sells insurance only to military personnel, veterans, and their families — and tailors its offerings brilliantly and tightly to the needs of those in that sphere, so much so that its customer satisfaction scores are off the charts.
  • Vanguard sells index mutual funds/ETFs to customers who don’t believe that active management is helpful to the performance of their investments. With that tight Where to Play, it can win by working to achieve the lowest cost position in the business.
  • Google wins by organizing the world’s information, but to do that it has to play across the broadest swath of search.

It doesn’t matter whether the strategic question is to aim broadly or narrowly, or to pursue low costs or differentiation. What does matter is that the answers are a perfectly matched pair.

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What other firms refuse to learn from Costco

Why aren't the benefits of better compensation common knowledge among business owners? 

Harvard Business Review: Inequality isn't just due to market forces, 2017-Mar-30 by Adam Cobb

For example, Costco has long been recognized as a “high road” employer that pays above market wages, offers good benefits, and provides workers opportunities for advancement. Despite these significant labor investments, from 2007 to the end of 2016, Costco’s stock price increased over 200%, far outpacing the overall growth of the S&P 500 (58%) and that of competitors like Walmart (45%) and Target (26%), which is known to pay workers low wages and offer relatively meager employee benefits. Of course, this is just one example, and there are a number of reasons why these firms’ performance varied during this period. But research shows that firms that pay workers higher wages, provide better benefits, and offer predictable working hours attract workers who are more productive and more committed to their employers. And improved worker productivity and lower turnover frequently more than offsets these firms’ higher labor rates.

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Why we have to notice when capitalism goes off the rails, as in fake markets like Facebook and Uber

  • I've spent my last dime with Amazon (they would take it if they could get it). I just used up a gift card, and future gift cards will be given away to someone desperate. 
  • I'm considering giving up on Facebook, but I think I'll just do my best to avoid letting them make any money. (Also my policy toward any media owned by Rupert Murdoch.)
  • Divorcing Google will be the most difficult. They've insinuated themselves into the infrastructure of my business. But I will start using search engines like DuckDuckGo. 
  • I'm not giving up Apple products, but I will not become a 'sheeple' as my son warns. 

Anil Dash brilliantly points out that these fake markets appear to offer businesses the chance to become sustainable but then exploit them ruthlessly, driving their profits to zero. 

"I'm mad as hell and not going to take it anymore." I'm not going to fall for the lure of convenience, and you shouldn't either. Choose to consume goods and services from people you know and trust. 

A Blog About Making Culture: Tech and the Fake Market Tactic, 2071-Mar-1 by Anil Dash

Worse, we’ve lost the ability to discern that a short-term benefit for some users that’s subsidized by an unsustainable investment model will lead to terrible long-term consequences for society. We’re hooked on the temporary infusion of venture capital dollars into vulnerable markets that we know are about to be remade by technological transformation and automation. The only social force empowered to anticipate or prevent these disruptions are policymakers who are often too illiterate to understand how these technologies work, and who too desperately want the halo of appearing to be associated with “high tech”, the secular religion of America.

It’s essential we develop a vocabulary for talking about these issues...

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How things, including organizations, change

I tend to think that organizations won't change unless forced, but 'org designer' Kathryn Maloney reminds us that's actually not true. Managing and leading are more about steering change that instigating it. 

Another striking thought below: living systems (including organizations) naturally differentiate themselves. What if that need to differentiate drives a lot of change that seems useless? 

The Ready: Change as a Force of Nature, 2017-Feb-27 by Kathryn Maloney

Where change management may apply change to or attempt to manage change within a system, org designers are focused on unlocking capacity and potential within a system. We aim to leverage change as a natural, expected, and needed force. We believe in flow and emergence. We don’t actually believe in control and management....

According to modern science (biology, chemistry, evolutionary cosmology, quantum physics, etc.), living systems operate according to three basic principles:

  1. All living systems are interrelated and interdependent,
  2. All living systems have the capacity to self-organize, and without constraints, have the capacity to develop and evolve, and
  3. All living systems operate according to the principle of differentiation, in that to exist is to be different.

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