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Joseph Michelli on Distinctive Service and Seeing the Future – Guest Blogger

July 7, 2008/0 Comments/in Books, Customer Service, Guest Blogger, Strategy /by Mike Figliuolo

It’s an honor and a privilege to bring you some thoughts from bestselling author Dr. Joseph Michelli (author of The Starbucks Experience) on using distinctive service as a strategic competitive advantage. Enough of me… here’s Joseph.

We all know businesses that at one time dominated an industry. Whether it was a company like Polaroid which kept a strangle hold on instantly available pictures or Ford Motor Company with its early market prominence, many great businesses ultimately have struggled to maintain their relevance to the customer.

As Mike shared with you in an earlier blog post, he and I attended an NYU/Ritz-Carlton Leadership Training course together. That program, along with an additional year of access to leadership at The Ritz-Carlton Hotel Company, reinforced for me the importance of maintaining a constant focus on the changing wants of the customer.

In my just released book, The New Gold Standard – 5 Leadership Principles for Creating a Legendary Customer Experience Courtesy of The Ritz-Carlton Hotel Company, I address this issue of relevance through a business principle I termed “Define and Refine.”

Much of the historic success of The Ritz-Carlton can be linked to its well-defined service culture complete with a compact and operational mission statement, a credo card carried by all employees, and daily line-ups reinforcing corporate values for every staff member. Given this tightly defined culture and iconic business status, brand relevance became a major challenge for The Ritz-Carlton.

Strategic Flexibility Requires “Primacy of Purpose”

May 5, 2008/1 Comment/in Leadership, Strategy /by Mike Figliuolo

There’s an old Army saying that “no plan survives first contact with the enemy.” (I’m sure some navy or marine guy out there will attribute this comment to their branch of service but to be clear, it came from the Army… well, actually it came from Helmuth von Motltke but his version was much less pithy. Gotta love his helmet though…). This principle holds true in business as well.

You can put together the mother of all PowerPoint presentations, make massive strat plan binders for the Board of Directors or the heads of your business unit, create Excel models that cause the lights to dim when you run them and lay out huge project plans in MS Project. The thing is, as soon as you’ve briefed your plan, it’s irrelevant. The world has changed. Oil spikes. Consumer sentiment. A presidential election. New regulations. Disruptive technologies and even more disruptive competitors. Not to mention natural churn in the labor markets (see “Talkin ’bout My Generation“).

In these changing times, it’s easy to get “off strategy” and chase things that seem important. Unfortunately you can end up behaving like a puppy in a park (Ever seen a puppy in a park? They chase EVERYTHING that looks interesting.). The only thing that can save you and keep you “on strategy” is something called “primacy of purpose.”

Customer Focus = Alignment in Strategy

April 22, 2008/0 Comments/in Customer Service, Strategy /by Mike Figliuolo

Besides ruthless prioritization (see “Strategy is About Saying ‘No'”) and being sure you have a well-articulated goal that ties to your financials (see “Budget +10% Isn’t a Strategy”), strategy requires a crystal clear understanding and alignment around serving your customers. These are the people who pay your salary. Aligning the entire organization’s efforts around providing outstanding products and services to these customers is key, yet often absent.

Why? There’s lack of clarity and conflicting goals that often get in the way of alignment. Sure it’s easy for the front-line associate to understand customer service and wants/needs. These are your store personnel, service providers, sales teams, and anyone else who directly interacts with your end customer (be it an individual or a business). Usually there’s pretty good alignment within these ranks on the importance of serving customers well. The problem more frequently occurs in the “support” functions. That’s where it gets a little more difficult to align an organization with customer service but it can be done. The big question is “how?”

There’s a great phrase I’ve had used on me and subsequently used in other settings. I was working in a “support” function where I was responsible for some of our organization’s back-end technology and infrastructure. The organization was focused on metrics that made sense at face – budget, project completion status, up-time, etc. Unfortunately, when requests came in from the “front line” they were seen as obstacles to achieving some of the metrics the group was evaluated on. How could we possibly make budget when the front line was asking for additional capabilities and resources? Then I heard it – “If you’re not serving a customer, you best be serving someone who is.” It was a clarifying moment.

Customer Hostile Policies Feed Customer Hostile Cultures

April 8, 2008/9 Comments/in Customer Service, Strategy /by Mike Figliuolo

So I’m going to hearken back to my very recent post “$325 Equals $210? The Math of Customer Hostile Policies” because apparently these policies are indicators of a broader cancerous culture. I’m flying home right now from Virgina Tech where I spent two days with some wonderful, bright and talented students (thanks for having me come speak by the way). I arrive at my layover destination. I’m traveling on the airline with the customer hostile policies I mentioned in my previous post. My final flight is scheduled to depart at 2:40 PM. I look at my watch and it’s 1:05. I notice there’s an earlier flight to my destination that departs at 1:20 so I walk briskly to that gate (at my age, I no longer sprint through airports out of fear of pulling something).

When I arrive at the gate (at 1:08), I asked the gate agent “Is there any way I can get on this flight? I’m currently on the 2:40.” The jetway door was still open. Her reply didn’t shock me:

“Ummmm no. I’m busy doing my paperwork and I have to get it out by 1:10. And I’d be all rushed to take your credit card info and get you on the flight.” You have to be kidding me. Her tone was one of annoyance that I, a measly customer, would dare interrupt her all-important paperwork or heaven forbid ask her to rush a little and go out of her way to perform the onerous task of swiping a credit card.

“You can’t get me on the flight? The jetway isn’t closed yet.”

Not even looking up from her paperwork I got “Nope. Flight’s closed.” I guess I didn’t even exist anymore because I wasn’t even worth being looked at now.

Strategic Thinking: Don’t Bring Problems – Bring Solutions

February 4, 2008/1 Comment/in Business Toolkit, Leadership, Strategy /by Mike Figliuolo

Ah to be young again. To be able to make mistakes repeatedly and egregiously. To have paternal and maternal figures in our careers who forgive the errors of our youth and kindly guide us to better answers… I miss those days. One of the best “thinking” mentors I had was very understanding of the errant ways of youth and my penchant to find issues all around. I’m blessed to have run across him because he taught me a new way to look at the world.

It started innocently enough. I was new to consulting at the time and was bold, brash and driven (nine years in the Army and spending a few of those years on tanks will do that to you). I was serving a particularly ornery client on a tremendously thorny set of issues. Long hours and frequent travel were wearing on my patience.

Friday finally rolled around. As consultants, we’d all return to the mother ship on Fridays and spend our day in the home office sharing best practices and developing new strategic frameworks (which is code for we’d complain about the hours we were logging and how difficult either our clients or our partners managing our projects were being).

On this particular Friday, I was good and spun up. It had been a train wreck of a week at the client. The progress review went poorly. They were pushing back hard on our recommendations. They put us in a cold, drafty, smelly conference room (I think it used to be a janitor’s closet). Subway was closed for renovations and I had to eat at JoJo’s Subs (don’t ask…). As I was bemoaning my plight to a colleague, our office director came around the corner (he was also the senior partner on my client engagement). He asked what I was so upset about.

Strategy is About Saying “No.”

January 24, 2008/1 Comment/in Entrepreneur, Leadership, Strategy /by Mike Figliuolo

We’ve already talked about what a strategic plan is (and isn’t) in our discussion: “strat plan isn’t ‘budget +10%.'” Hopefully now that you’ve got a direction mapped out and a list of initiatives you’re going to pursue, you’re ready for a little tactical strategic advice (yes that phrase is supposed to sound oxymoronic but it’s actually deliberate and accurate).

Repeat after me: “No.”

Try it again. This time with conviction: “NO.”

Strategy is inherently about saying “no.” It’s about the choices we make and the choices we don’t. I’ve seen plenty of strategies completely derailed due to an inability to say “no” to that incremental initiative that’s kind of “on strategy” but not really. The more effective you are at saying “no” to non-core work and singularly focusing your team on the end vision you’ve laid out, the higher the likelihood of you achieving your strategic goals. Not saying “no,” on the other hand, leads to dilution of your efforts and strategy by incrementalism (which is rarely effective).

Let’s walk this logical strategic dog, shall we? Take the following points as true:

You know where you want to end up and what your overarching strategy is
You have a finite amount of resources at your disposal.
You’ve defined the 3-5 most critical initiatives to help you achieve your goal.
There are a substantial number of “cool” opportunities you could pursue in addition to those 3-5 you’ve already identified.

The last point is where things get hairy. Read more

Strategic Planning: “Budget +10%” Isn’t a Strategy

January 16, 2008/0 Comments/in Business Toolkit, Communications, Leadership, Strategy /by Mike Figliuolo

Everyone wants to do “strategy.” Everyone wants their stuff to be “strategic.”

Strategic Plan
Strategic Facilities Expansion
Strategic HR Sourcing
Strategic Restroom Cleaning Schedule

The word “strategy” is being abused so badly it needs counseling.

Wikipedia says “A strategy is a long term plan of action designed to achieve a particular goal, most often ‘winning.'” Everyone wants to win. And sometimes winning means increasing financial performance by 10%. The problem is many organizations use the end metric to define their strategy. To be clear – financial or numerical results FOLLOW from strategy (they don’t drive it). Strategy and the defined tactics and initiatives for executing it result in financial performance (hence the more oft used term “financial RESULTS”).

Why am I harping on this point? Simple. Define your strategy as “budget +10%” (or some other such ROMA-based number) and your team will have no idea what they’re supposed to do to achieve it. Instead, provide them a goal and vision then clearly lay out the competitive environment, how you’ll compete, what initiatives you’ll pursue, then execute. Doing this means your odds of hitting your magical budget +10% goal go up dramatically.