Previous month:
March 2017
Next month:
May 2017

3 posts from April 2017

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?

Tq170429mr


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.

Tq170428ff


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.

Qv170405st