Organizational Culture Change

Talent is a top concern of CEOs

by Sheila Margolis on April 18, 2011

A recently-​​released report by the Conference Board, CEO Challenge 2011: Fueling Business Growth with Innovation and Talent Development, cites Business Growth followed by a focus on Talent as top concerns of CEOs.

Although the priority of Talent fluctuates slightly based on industry and geography, it is a key CEO priority for all. According to the Conference Board press release:

CEOs selected improving leadership development/​grow talent internally, enhancing the effectiveness of the senior team, providing employee training and development and improving leadership succession as the key strategies to address talent challenges.

Talent management and innovation emerged as the most critical vehicles for implementing business growth strategies. According to the Conference Board CEO Challenge 2011 site, Roy Vallee, Chairman of the Board and Chief Executive Officer of Avnet, Inc. described the priorities as he sees it:

So, having the right strategies, the right structure, the right culture to really foster innovation and reward innovation, I think that’s the biggest challenge.

 

.

 

 

 

Related Posts:

Be the first to comment

What is your formula for improved customer service?

by Sheila Margolis on April 11, 2011

Is customer service a problem in your company? Today I spoke with a customer service rep at Go Daddy, and he was brilliant. He had a great service attitude, was knowledgeable, and took the time to answer my questions. But how often do you walk into a store or call a customer service number and feel like customer service is either lousy or does not exist?

A lot of companies–including Macy’s–are  working hard at improving their customer service rankings. In the WSJ article “At Macy, a Makeover on Service,” Rachel Dodes describes the new Macy’s training program “Magic Selling.” Magic is an acronym representing the following:

  • Meet and make a connection
  • Ask questions and listen
  • Give options and give advice
  • Inspire to buy
  • Celebrate the purchase

By training new sales associates in the Magic formula through a three-​​and-​​a-​​half-​​hour session, the associates will hopefully be better prepared than watching a 90-​​minute interactive video in a booth–the training that sales associates received in the past. The initial training with refresher courses and coaching are expected to make a difference.

Companies like Nordstrom are known for their legendary customer service. As they say, “At Nordstrom, our goal is to provide outstanding service every day, one customer at a time.” Every morning before each store opens, employees gather to share their best service stories from the previous day. In The Nordstrom Way, the authors describe Nordstrom as a culture of customer service. Customer service is embedded in all aspects of the company–from the way the company is structured, to the attributes looked for in an applicant, to how employees do their work and to how performance is managed. As they describe one of the keys to success:

Nordstrom would rather hire nice people and teach them to sell, than hire salespeople and teach them to be nice.

Zappos is another company that wants to be known for providing the very best customer service experience. As CEO Tony Hsieh says,

Our philosophy has been to take most of the money we would have spent on paid advertising and invest it into customer service and the customer experience instead, letting our customers do the marketing for us through word of mouth.

In Delivering Happiness, Tony describes numerous ways they work to deliver Wow service. For example, where some companies hide any customer service contact information, Zappos puts their phone number at the top of every single page of their website. They want to talk to customers and build that important relationship.

So what is your formula for improved customer service? Yes, training will need to be an integral part of it, but to create a great customer service experience, the value of customer service must be integrated throughout the culture so it is the true character of the company.

Related Posts:

Be the first to comment

The Walmart core–Simon interview in WSJ

by Sheila Margolis on March 21, 2011

Today, the WSJ published an interview with William Simon who heads Walmart’s US division. Simon says that to improve sales, Walmart is returning to its “Every Day Low Prices” formula.

According to the company website, it states this important core principle:

We’re known around the world as the company that helps our customers save money so they can live better.

Saving customers money is core to the culture of Walmart.

Additionally, since its founding, Walmart has had a customer service philosophy that is grounded in respect, service, and excellence.

As Sam Walton expressed in his autobiography,

… if you think about it from the point of view of the customer, you want everything: a wide assortment of quality merchandise; the lowest possible prices; guaranteed satisfaction; friendly, knowledgeable service; convenient hours; and a pleasant shopping experience.

So I was perplexed by Mr. Simon’s response to the interview question, “Can you just go back to what Wal-​​Mart did well?” Mr. Simon responded:

I try to avoid the word “back,” because back doesn’t exist; history is gone. You have to take what worked for Sam [Walton], what’s worked recently, and where you think the business is going and build it all together.

Well, history may be the past, but it definitely has a place in defining the character of a company that endures into the future. Saving the customer money and making shopping easier is part of the history of Walmart that defines the company. Therefore, to alter either of these principles, distracts Walmart from its character, its Purpose and Philosophy, its Core Culture, its identity. Maybe Mr. Simon gets that, but his words were a bit confusing.

Having low prices every day is core–you don’t discount some items and raise prices on others.

Making shopping easier is core–you don’t eliminate selections that the core customer base expects.

Yes, companies have Priorities–strategic values–that allow them to compete and thrive in a changing business environment. But those values must reinforce and align with the company’s core values. In the case of Walmart, any strategic Priorities must align with the core principles derived from Sam Walton.

So, can Walmart compete by having smaller stores in urban areas? And can Walmart compete with online retailers? Business is challenging, but if the company forgets its core principles, any strategies that are not aligned with the core may produce negative results.

 

Related Posts:

Be the first to comment

What are your company’s distinctive values that set it apart from your competitors?

by Sheila Margolis on February 28, 2011

If you asked employees–what are our company’s distinctive values–how would they respond? Would they share a similar view of what’s unique and distinctive about your organization? In successful companies, employees know and live by the distinctive values that are core to it. These values are guiding principles that connect employees and build a sense of family. The values are a source of pride, and the shared practice of these values produces a distinctive workplace and customer experience that sets your company apart from others.

Many companies have clearly defined guiding principles that most employees share. Typically, they have a leader who understands how to build a community of workers who are bound by a shared Philosophy.

Zappos is one example of such a company. The CEO of Zappos–Tony Hsieh–is known for sharing with everyone, employees and the public, the company’s core values. If you look on their website, the Zappos Family Core Values are listed with a video explaining what they are and why they’re important. These descriptions by real employees give a clear picture of what’s valued in this company. Employees describe the core values as the foundation of their culture. The values capture what employees feel make the culture special. Employees are selected because they understand the core values and want to embrace them and practice them. The company even has little pictures to capture each core value.

Zappos Core Value-​​Deliver WOW through Service

Frog images of each of their values are terrific ways to communicate what’s important at this company.

Additionally, Tony, the founder and CEO, also wrote the best-​​selling book Delivering Happiness to share his founding principles and values that are central to the culture.

Take your company values seriously. Hire for them, live by them, and be sure the world gets it, too. Be known for what makes your company special. Be clear on what makes your company distinctive. It all begins with having a shared Philosophy that all employees understand and want to live by. Define your core values and make them a part of every aspect of your company.

 

Related Posts:

Be the first to comment

Companies–including Walmart–should not deviate from their core culture

by Sheila Margolis on February 22, 2011

According to the WSJ, Walmart will be reporting a second straight year of declining domestic same-​​store earnings. The cause is attributed to the company’s move from its core culture centered around the principle of providing everyday low prices to the American working class.

According to the Walmart website, they state that three simple principles that were part of their founding in 1962 are what make them great.

  1. Respect for the Individual–We’re hardworking, ordinary people who’ve teamed up to accomplish extraordinary things. While our backgrounds and personal beliefs are very different, we never take each other for granted. We encourage those around us to express their thoughts and ideas. We treat each other with dignity. This is the most basic way we show respect.
  2. Service to our Customers–Our customers are the reason we’re in business, so we should treat them that way. We offer quality merchandise at the lowest prices, and we do it with the best customer service possible. We look for every opportunity where we can exceed our customers’ expectations. That’s when we’re at our very best.
  3. Striving for Excellence–We’re proud of our accomplishments but never satisfied. We constantly reach further to bring new ideas and goals to life. We model ourselves after Sam Walton, who was never satisfied until prices were as low as they could be or that a product’s quality was as high as customers deserved and expected. We always ask: Is this the best I can do? This demonstrates the passion we have for our business, for our customers and for our communities.

Walmart’s changes in their merchandise and even the look of their stores was designed to attract higher-​​income customers. Then they instituted discounts on select items while raising prices on others–not in keeping with their tradition–and part of their core culture– of everyday low prices.

The company Purpose is simply stated by Walmart:

Saving people money to help them live better was the goal that Sam Walton envisioned when he opened the doors to the first Walmart. It’s the focus that underlies everything we do at Walmart.

Sometimes we get distracted from our roots in our attempts to grow and thrive. But when a company changes its central principles, then the company confuses its loyal customers and its employees. Changing core principles should be avoided unless it is required for survival.

Companies should define their vital Purpose and their distinctive and enduring Philosophy and understand that those attributes are their identity, and they should always be preserved.

Related Posts:

Be the first to comment

Changing school culture at Harvard Business School

by Sheila Margolis on February 6, 2011

Harvard Business School is revamping its M.B.A. program. According to a Wall Street Journal article, they are putting a greater emphasis on ethics and teamwork in response to a concern that the program has supported a money-​​focused culture that contributed to the financial crisis. The curriculum is changing with new classes, an internship program, and more time spent working in small groups.

But will these changes alter the attitudes of its students who are attracted to Harvard because they consider it a culture of entitlement? To create leaders of competence who want to lead solutions in health care, energy, and sustainability, the entire Harvard experience from selection to completion, must incorporate this new tone of change. Changing a culture is an intricate process that must begin at the core and be infused in all organizational practices. The curriculum and how students are structured is a start, but selecting applicants who are a fit is essential, too. A mindset is not easy to change. Defining the new culture must be a collective process for faculty, administration, and students. And aligning all practices with the new culture must be a shared goal.

Related Posts:

Be the first to comment

Will training improve Delta Air Lines customer service?

by Sheila Margolis on February 6, 2011

Delta Air Lines has not been doing so well in customer service. If you go to FightStats​.com, you will see that for December 1, 2010 to January 31, 2011, the on-​​time performance rating for the 20 most active routes, showed the following results (the higher the number, the better; 5.0 is the highest rating possible):

  • Delta Airlines had an on-​​time performance rating of 3.005.
  • AirTran Airways had an on-​​time performance rating of 3.68.

According to a Wall Street Journal article, customer complaints at Delta were high in 2010 and with high baggage handling problems and canceled flights, the airline knew it had to work on things. Training can be a valuable component of any improvement process.

But if Delta is serious about improving customer service, the airline and its employees must see service as a valued aspect of their culture–more than just an add-​​on. To integrate customer service throughout the company, the mindset of everyone at Delta must be altered. That process begins with everyone in the company taking time to reflect on what has historically been the distinctive values of Delta and what few additional values will enable the organization to compete and thrive. By stopping and asking all employees a few key questions, everyone can participate in identifying those values and then integrating them in all aspects of work. Customer service must be something important to each employee, and then the training can be used to hone employees’ customer service skills.

A day of training can be beneficial, but for the culture to change, it must start at the core. Not only should this culture assessment process decide if customer service is a value, the process should include defining the principles that make Delta customer service distinctive. There is a Delta tradition that those of us in Atlanta knew in the past. Maybe that unique Delta Southern Style or whatever employees want to call it, can be brought back, honed, and allowed to flourish again. Defining the core culture of Delta should be the first step. Then, Internal Practices like training, hiring, performance management, internal communication, work design, and systems for doing work must be aligned, as well as External Practices and Projections.

Delta can build a culture of distinction, but it must start from the core so that the values are defined and shared. Culture begins at the core.

Related Posts:

Be the first to comment

Why do companies like BP choose a culture of growth with cost-​​cutting rather than a culture of safety?

by Sheila Margolis on February 1, 2011

Bob Dudley–the new chief executive of BP– stated he will move BP to having a greater safety culture.

In his September 2010 press release, he describes safety and risk management as BP’s most urgent priority. Dudley instituted a structural change–a new Safety & Operational Risk division headed by Mark Bly– to strengthen the safety focus.

In a press release dated Feb. 1, 2011, BP states:

BP’s immediate priority is to complete the process of embedding world-​​class safety and operational risk management at the heart of the group’s approach to all its activities and throughout all its operations.

Of course, if you are truly embedding safety into all aspects of your culture, the process never ends–it’s an ongoing focus where everyone continually thinks of new and better ways to improve the safety focus.

A Wall Street Journal article says that BP critics point to BP’s historical focus on deal-​​making and growth rather than on safety and operational excellence. The article sites major challenges that BP faces to changing the culture, including fixing aging infrastructure and changing staffing to reduce worker fatigue.

But the causes are more complex, according to a U.S. presidential commission report by the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.

The causes are described as systemic issues. Examples include:

  • Flaws in BP’s management and design procedures
  • Failures to appreciate risks
  • Poor communication between BP and Halliburton
  • Lack of communication and training about lessons learned from prior problems
  • Government regulators lacking the authority, necessary resources and technical expertise
  • Using time-​​saving and cost-​​saving measures

Why is it that so many problems are due to a focus on profits over safety? Repeatedly, a focus on growth at the expense of safety or quality leads companies on a dangerous path that affects human lives. It’s not just BP that has taken this path. Look at the recent problems with Toyota. Companies like Toyota have been known in the past for having a quality and safety culture, yet they have moved in the wrong direction. When major quality or safety issues are exposed to the public, by either a disaster or a recall, the changes in the culture are often systemic–it’s not an isolated error but a change in values.

If a company like BP wants a safety culture, it must implement massive changes– throughout every aspect of the organization–that are guided by that safety focus. It must do more than just re-​​structuring or changing incentives and rewards.

The changes must start at the heart of the culture–at its core–where employees stop for a moment to reflect on the values that are important and together create a shared view. If safety is what’s valued over profits, then employees should not be over-​​worked, and faulty equipment and poor maintenance should not be allowed.

Leaders must be the #1 advocate for safety–in the case of BP, does Dudley talk about safety every day?

And all actions must be aligned with the safety philosophy. Employees should be applauded for reporting problems so they can be fixed and prevented throughout the company. Open communication–bottom/up as well as top/​down– can be a great contributor to building a safety focus. Contractors must be held to the same high standards, and if they don’t meet the standards, they must be changed. Cuts in staffing and training can have significant impact on safety so those areas must be monitored so safety standards are not compromised. Employees should be hired not only for competency but also because they personally value safety. It should be the role of each employee to enhance the safety culture.

Changing a culture is a process. It takes time, but it must be more than just add-​​ons. It must be part of the company’s core–its DNA. Making safety #1 should be a decision that everyone participates in and owns. And if safety is the company’s prime principle, then it must come first before anything else–including profits and growth.

Related Posts:

Be the first to comment

Drug shortages impact safety in hospitals

by Sheila Margolis on February 1, 2011

Shortages of some injectable generic drugs have resulted in increased medical errors. According to the Institute for Safe Medication Practices, September 2010 report:

A national survey of more than 1,800 healthcare practitioners has uncovered high levels of frustration as well as low levels of patient safety caused by recent drug shortages. Respondents described more than 1,000 errors and adverse patient outcomes during the past year related to more than 50 drugs on the shortage list that became abruptly unavailable, often without adequate notice.

According to the Wall Street Journal article, “Drug Shortages Distress Hospitals,” Sen. Amy Klobuchar plans to introduce a bill requiring companies to contact the FDA when they anticipate a supply issue. Some of the factors contributing to the shortage include the consolidation of drug companies, the expiration of patents with brand-​​name drugs no longer being produced, enforcement of quality standards for manufacturers to prevent drug contamination, complex manufacturing processes with long lead times, and the lengthy FDA approval process.

Drug shortages are a significant factor impacting the safety and health of patients. Hospitals must expand their safety cultures by putting a greater emphasis on preventing errors when using substitute drugs. Part of the safety culture must include training in this area to ensure patients don’t get injured from the drugs they are hoping will help.

Related Posts:

  • No Related Posts

Be the first to comment

Air France has wide safety deficiencies. Does the airline you fly value safety?

by Sheila Margolis on January 27, 2011

If you read the Wall Street Journal article, “Air France Panel Cites Wide Safety Deficiencies,” you probably won’t rush to fly on an Air France plane. As the article states:

An independent study of Air France-​​KLM SA’s operations found a lack of “strong safety leadership at all levels of management” that has resulted in lax cockpit discipline, ineffective pilot training and “an unhealthy relationship” with unions.

The article says that management gives the message that safety is a priority. But the value of safety is obviously not woven into the fabric of their culture. For that matter, if you go to their website, it’s hard to find  any reference to safety. Buried in the massive content under sustainable development, you can finally see the word “safety.”

So what airlines do you fly? And what do they value? Take the time to see what they say matters to the company and its employees and of course, see if the experience matches their claims.

For example, Southwest Airlines is very clear about their values. It’s easy to find that service and value are their focus. Start by looking on their website: there’s a link on each page for “The Southwest Difference.” Just listen to a video and you’ll hear a customer service story that will make you cry. You can also read about their Mission and customer service commitment as well as their safety commitment. It’s so easy to find the values that matter to this company and its employees.

Next time you plan on flying or buying any products or services, take a moment to check out the values important to the company you are planning to use. If it’s not obvious what is valued, then there’s a good chance employees will not have a shared set of principles to guide what they do. Maybe it’s time to rethink where you take your business. Maybe it’s time to do business with companies that share your values.

Related Posts:

Be the first to comment

← Previous Entries

Next Entries →