Chris Humphrey and Emma Macdonald, authors of Culture by Design, highlight the pivotal role HR plays in translating purpose into something that can be seen and felt by customers
Are companies interested in real people anymore or just their data? All-pervasive data capture means that, in principle, businesses know their customers better than ever, but are they looking to exploit that data and extract value from customers rather than using it to create better products and services?
Mark Zuckerberg wanted to “make the world more open and connected” and with a typical founder’s obsession kept Facebook relentlessly focused on its customers and everybody pulling in the same direction. But Facebook’s self assurance is now visibly corroding, revealed by a senior executive defending dubious business practices in a leaked memo, a 6,000-word manifesto repositioning the company as a social infrastructure that does good, and a new mission to “give people the power to build community and bring the world closer together”.
Many organizations stumble over combining growth with the agility, focus and connection to customers that originally provided their momentum and energy. Very few have a founder who decides that a command-and-control leadership style no longer safeguards his legacy, so designs a methodology to hardwire customer expectations into the heart of the business. Even fewer have a framework that over the decades has remained the bedrock for global expansion and success.
There is a good deal of work on what makes for a ‘good’ organizational culture, but how to harness it is rarely identified
Our work on the white paper ‘Culture by Design’ has looked at the importance of a people-centred culture in a digital age. We have drawn on our combined 30 years’ experience at the Walt Disney Company, alongside our work with Cranfield University’s School of Management, to explore how best to design a culture that inspires employees to create exceptional customer experiences. The findings highlight the ways in which a people-centred organizational culture can be translated into what is seen and felt by customers, and the pivotal role for human resources (HR) in making it happen.
There is a good deal of work on what makes for a ‘good’ organizational culture, but how to harness this on behalf of customers is rarely identified or explicitly addressed in practical ways. There is a vague and general acceptance that if employees are happy this will translate into a better experience for customers, whereas the big opportunity for enduring wealth creation is overtly to connect employee engagement with customer value creation.
Digital technologies have multiplied the different interactions between businesses and their customers, which has caused organisations to become much more complex and fragmented. Market maturity and globalization have also driven up standards, so customers demand not just the basics of a product to be right, but also that every one of those interactions is great. Companies are increasingly struggling to co-ordinate everybody around a common customer agenda, but micromanaging every detail of how our people should behave is demoralizing, inefficient and impossible. A culture, as simple as “the way we do things around here”, is needed that gives everyone the clarity to stay on the same course, and also empowers them to take spontaneous, creative and flexible decisions. Although the commitment required to change culture should not be underestimated, conscious design of culture is possible. Culture embeds a group’s explicit or implicit goals, so in a customer-led organization it must be designed to keep people focused instinctively on customers.
In its report into the Disney culture, leading management consultancy, McKinsey tells the story of a young girl and her mother approaching a building site on a visit to a Disney theme park. The little girl threw Belle, her favourite Disney doll, into the fenced-off area. When staff retrieved the doll later, it was spattered with mud, the dress was torn, and the hair was a mess. Staff tried but couldn’t find a replacement. So, accompanied by a photographer, the bedraggled doll was taken to a make-up artist who styled her hair, then to the wardrobe department who made a new dress, and finally to a ‘party’ with other Disney princesses. Later that evening Belle was returned to her owner, together with a photo album showing what a great time she’d had during her ‘makeover’. The girl’s mother sent a thank-you note describing the moment of Belle’s return as “pure magic”.
Employees are too often neither empowered nor equipped to make good, consistent and customer-led decisions
From such stories it is clear that the final outcome is not just the result of a single employee’s effort. Teams of people work seamlessly together, but do not consult a script or check with their managers – a spontaneous, flexible and personalized response is essential. The trick is how to channel this improvisation so that it adds up to the experience customers want, whilst avoiding the dehumanizing tendency for tight scripting and the equally ineffective customer experiences that come from a free-for-all. Employees are too often neither empowered nor equipped to make good, consistent and customer-led decisions, leading not only to unhappy customers, but also to unhappy employees.
The organization must define its purpose, encapsulating precisely what it does for its customers. It should not be a fluffy statement that is divorced from customer needs or the reality of it can deliver. Rather, a well-designed brand purpose should articulate what a customer is really seeking to accomplish – Disney takes the view that families want to have a happy time together, so its purpose is “We create happiness”. Premier Inn’s purpose of making guests “feel brilliant through a great night’s sleep” gives them the focus to excel in areas that customers value such as Hypnos beds, good quality showers and a hearty breakfast, but to avoid investing in gyms, luggage porters or fine dining.
Having a clear organizational purpose is immensely valuable. But on its own, knowing that our job is to ‘create happiness’ can leave employees feeling short of guidance on how to behave. Fundamental to Disney’s consistent customer experience and sustained commercial success is having a small but defined set of standards and behaviours that give employees the next level of detail about their customers’ expectations. These standards and behaviours should be observable, measurable and coachable. For example, an airport with safety, comfort, ease and speed as its standards has “I pick up rubbish” and “I report an area that needs attention” as behaviours associated with ‘comfort’. Similarly, the behaviour “I display a calm tone of voice” is associated with ‘ease’.
Another invaluable element of the Disney approach is to prioritize standards in a non-negotiable hierarchy that is a tiebreaker when decisions conflict. So at Disney, safety trumps courtesy: if you have to shout to stop someone going somewhere unsafe, you do. An overarching framework helps empower employees to act freely when the unexpected happens, knowing that as long as they are aiming towards the organization’s purpose and working within the clear boundaries of its standards and behaviours, they will be backed by their management for doing their best.
Employees who are clear about customer expectations and who are equipped and engaged will be willing to do more
All HR practices need to reinforce the brand purpose and standards if a customer-led culture is to result. We can all think of organizations that seem to exist only to make life easy for themselves, rather than for their customers. In protected markets, such as banking in many countries, and in non- competitive public services, these are all too common, but in free markets they cannot survive unchanged. Cranfield research consistently shows that organizations with a clear purpose and that also engage all their employees in creating value for their customers have higher levels of customer satisfaction. Employees who are clear about customer expectations and who are equipped and engaged will be willing to do more, and crucially will focus more precisely on what is important.
Firstly, recruitment must ensure that applicants whose personality naturally fits these standards are encouraged, and that those with the wrong fit have an early opportunity to opt out themselves. Disney structures its recruitment advertising explicitly to showcase customer expectations. Metro Bank overtly appeals to applicants with a customer service ethos. The challenger bank recruits to stores not branches “because we want them to think like retailers”, and if “you don’t smile during the first job interview, you’re out”.
Secondly, the brand purpose and standards need to be internalized in both initial induction and all subsequent learning and development activities. Many customer experience leaders use role-play for this, helping people develop their improvisational skills while still adhering to the standards. First Direct develops its staff by listening in on a portion of calls, as is common with call centres. Not so common, though, is that the staff are judged qualitatively on “First Directness”: the extent to which employees live up to the firm’s six brand values such as respect, responsiveness and openness.
Thirdly, internal communication needs to reinforce and bring to life the brand purpose and standards. All too often, communication focuses only on financial results, rather than framing these results as the product of how well we create value for customers.
Culture is all around us ... and as Facebook discovered, it exists in an organization whether we are conscious of it or not
Fourthly, continuing staff reward and recognition forms another powerful lever that can emphasize the customer-led message – or conversely, that can dilute it with mixed messages as to what is important. Disney, for example, has a programme called ‘The Four Keys Fanatic’, which encourages “cast members” (as employees are called, to emphasize the standard of ‘show’) to recognize each other for exceptional behaviour. But it does not reward any behaviour, only those behaviours that specifically relate to safety, courtesy, show and efficiency – the four standards or ‘keys’ as they are called. To nominate a colleague, you have to say which of these four the colleague demonstrated excellence at.
Culture is all around us, influencing our ideas, customs and social behaviour and, as Facebook has discovered, it exists within an organization whether we are conscious of it or not. Leaders must reflect how culture can be explicitly designed with the active leadership of HR to create an integrated system that engages employees, delivers superior value for customers and creates sustainable value for shareholders.
Chris Humphrey is Managing Partner at the Pelorus Jack consultancy (www.pelorusjack.co.uk) and former director of UK Marketing and Customer Strategy for Walt Disney World in Florida, Disney Cruise Line and Disneyland Paris. Emma Macdonald is Professor in Marketing and joint Director of the Cranfield University School of Management’s Customer Management Forum. ‘Culture by Design’ was produced by Cranfield University School of Management for its Customer Management Forum, www.cranfield.ac.uk
Main picture credit: Disneyland Parkcompany culture purpose Facebook human resources