CHANGE LEVERS AND AMBIGUITY – Chapter 6
The Master of Excellence is tempted to pick the single issue we believe stands between us and excellence and then work hard on it. Doing so is a bit like the proverbial blind man who believes the tail of the elephant he is holding is merely a rope. To fully grasp the size and scope of cultural transformation, avoiding a piecemeal approach bound to be ineffective and unsustainable, we need to understand the whole elephant. We can use six main levers to strengthen or change our organizational culture:
- Language
- Values
- Measures
- Power
- Assumptions
- Modeling
Each of these levers represent key sources enabling or constraining excellence. All are capable of being double-edged swords. Each is a lever when consciously used to advance excellence. It can be a constraint when we don’t recognize it as a source of ambiguity or conflict. Consider them as levers when we do something with them and as constraints when they do something to us. The challenge for a leader is to transform a constraint into a lever for transformation.
Life is permeated with ambiguity. As a Master of Excellence, we will strategically employ or destroy ambiguity to achieve a specific outcome. To achieve mastery requires us to identify the main sources of ambiguity; recognize when or where it exists; understand how ambiguity affects the organization and those we wish to satisfy; and adopt behaviors, mechanisms, or systems to master its presence or impact.
Ambiguity is a condition with great power to prevent success. Its opposite is certainty. We will use several tools that can make our leadership easier than it otherwise would be. In general, ambiguity that is not used purposefully has a negative effect on the functional excellence of the organization and its people. It is, therefore, an enemy to destroy.[1]
The American Society for Quality (ASQ) conducted a research project with Forbes Insights in 2014, with results published in a report titled “Culture of Quality.”[2] The research was accomplished through a global survey of over 2,200 executives, managers, and quality professionals, augmented by more in-depth interviews. Several of the study findings, relevant to our discussion about ambiguity, include the following:
- 50 percent said the quality vision is not understood throughout their organization, with only a third saying it is compelling.
- 61 percent said their quality values are clearly stated.
- 48 percent said customer needs are the driver of their quality programs, but only 24 percent said their organizations are effective at identifying just what customer expectations actually are.
- 75 percent of C-suite respondents believed they have a culture of quality, while less than 50 percent with job titles related to quality thought so. The view is rosier for those at the top.
- Less than half (47 percent) said leaders lead by example or otherwise live quality values.
A related ASQ 2013 study found that 51 percent of respondents said there was no agreement on what quality means and there needs to be one.[3] These research results are consistent with research by others and my own firm’s empirical observations.
The point is that the evidence causes us to reach the inescapable conclusion that ambiguity in both language and behavior exists in organizations of all kinds worldwide. Roughly half of all employees view it as a problem. I guess the good news is the glass is half-full. We can do much better.
The following discussion is intended only as an introduction to key ambiguity-driven constraints that the six transformation levers can very effectively resolve. Cases and examples throughout the book will offer many illustrations of how these levers work in practice.
1. Language
Language as a source of ambiguity. It may seem crystal clear when we say that our organization is or aims to be customer-focused. Yet this is a most problematic statement. We may assume that everyone in the enterprise understands whom the customer in “customer focus” means. We would likely be wrong. The ambiguity can easily defeat our best intentions. Which of the following describes the customer that employees in your organization could have in mind? Circle the relevant numbers below. A customer is one who…
- buys something from the business;
- funds or invests in the enterprise;
- uses any of the enterprise’s products;
- uses a specific product or service;
- uses but does not buy the product or service;
- represents others who will use the product;
- receives and transfers the product to someone else who uses it;
- regulates production or distribution of the product;
- modifies the product for someone else’s use;
- is thought of as an entire organization;
- is thought of only as an individual person;
- is external to the enterprise;
- is within the enterprise;
- is an employee who uses a product that someone else within the enterprise produces;
- is more important than all other customers;
- is equal in importance and power with all other customers; or
- hollers the loudest.
How many of these seventeen parties could be considered customers? _______. If we see that there is no single correct answer, people disagree on the answer but consensus matters, seeking to be customer-focused will be like chasing a snowflake.
It is clear that there are different kinds of roles and conditions under which a person might be a customer. Do you see any ambiguity? If so, it can create conflict, unwanted competition, uncertainty regarding who to listen to, inadvertent deafness to hearing the needs of the most important kind of customers, confusion when a person is one kind of customer in one situation and a different kind in another, disproportionate effort satisfying the wrong customer, and so on. This kind of ambiguity is a prime cause of chaos, confusion, rework, staff dysfunction, and enterprise under-performance. Otherwise, being customer-focused is a wonderful idea.
When there is a user for a product that is different from the buyer, which customer should we focus on? If we say both, we may be assuming each of them has equal power in the design of the product. That is rarely the case when the buyer and user are two different parties. The priorities of the two will be different. It is also no mystery that power tends to follow the money.
Once upon a time not so long ago, if a couple were to go looking for a new car, the salesperson would talk to the male, acting as if his female partner or spouse were invisible. Thankfully, that situation has improved somewhat in North America. When there are conflicting priorities, which party should we satisfy? Saying we will be customer-focused is not precise enough to be helpful.
Some organizations have sources that fund products but don’t buy or use them. To complicate matters, a college or university, medical facility, or government agency may get funding from sources that will never personally use the products produced by those recipient enterprises. Is an investor a customer? Not knowing the correct answer can be fatal to the enterprise. When a snack food company sponsors a TV program for preschool children, is the program producer primarily concerned with satisfying the needs of kids or the needs of the sponsor?
Understanding what the correct answer is for the long term offers insight and understanding to one of the main forces underlying the early twenty-first-century upheaval in the media industry. It also explains a key reason for Apple’s giant success, as opposed to formidable competitors such as Blackberry, Motorola, IBM, Sony, and others: unrelenting focus on the end users of its products.
Using broad-brush terms such as constituents or stakeholders would appear to eliminate ambiguity. Don’t these terms include all possible customers? They do, but if the different kinds of customers also differ in power and importance to the success of the enterprise, then we have merely created for ourselves a false sense of clarity. We might think about it this way: all horses are animals, but all animals are not horses. If we aim to ride that horse to excellence, we better make sure we aren’t saddling up a goat.
The principles and admonitions of the Baldrige Criteria, ISO 9001[4] family of standards, European Foundation for Quality Management (EFQM), and other systems to achieve both quality and excellence tell us to make customer focus one of our top priorities. If you think those systems have resolved the customer ambiguities, I urge you to research them. I’m afraid you will be disappointed. The same disappointment can occur when we believe the marketing department understands who the customer is. One simple example is the leadership of a car company who believed the buyers of its cars were the most important customers. Those who buy cars from the manufacturer are the dealers. Drivers and passengers got secondary attention. That multiyear mistake cost the company (and others like it) their previously dominant market share position.
Leader’s Action 5: Confusion Regarding the Customer (See Appendix 1 of Mastering Excellence Book) or Suite 1 – Mastering Excellence Leader’s Action Companion Tools
Language as a lever to advance excellence. If ever there were a time when having a common language would be a good thing, it is when we are leading others to achieve a shared vision of excellence, if not perfection. That time is now. Language functions as a lever when it creates consensus of meaning and purposeful, deployable intent. Language includes written, nonverbal,[5] and symbolic communication. Five specific words are known to create ambiguity and confusion for those who would be Masters of Excellence, as well as for their followers. Those terms can be turned into levers for creating a cohesive culture of excellence in the following chapters:
- Customer (Chapter 20)
- Service (Chapter 16)
- Supplier (Chapter 20)
- Input (Chapter 18)
- Output (Chapter 18)
Celebrate language as a lever under your control when such terms are sufficiently unambiguous that we and every employee can personally apply them to his or her own work. We’ve briefly discussed why the first word here is an obstacle. The remedy, in briefest form, is to understand which of only three possible roles a person can play as a customer (Chapter 20) and always determine which one is relevant and most dominant regarding the specific product under consideration.
[1] Certainty that springs from fiction, not fact, can also be dangerous. See the information about Vital Lies in this chapter. As Mark Twain said, “It’s not what we don’t know that gets us into trouble. It’s what we know for sure that just ain’t so.”
[2] http://asq.org/culture-of-quality
[3] “Discoveries,” American Society for Quality, ASQ Global State of Quality Study, 2013, http://asq.org/global-state-of-quality/reports.aspx.
[4] The Baldrige Criteria consists of seven criteria for excellence. ISO 9001 had eight key principles as of 2015. Customer focus was in the top three in both cases.
[5] In our multicultural world, it is more important than ever that we understand how nonverbal behaviors such as shaking one’s head, hand/finger gestures, and smiling can carry unintended and undesired meanings in some contexts.
2. Values
Values as a source of ambiguity. We may find ourselves telling those who follow us that we value teamwork, learning, initiative, innovative thinking, pay-for-performance, family, continuous improvement, customers, and a variety of other motherhood-and-apple pie sentiments. Good for us. If it’s not already a habit, practicing all those values all the time can be demanding. Some do it exceptionally well. Many of us are surprised to discover some values can compete or conflict with each other. When that misalignment occurs, we can be surprised again to find the result is fear and the perception that leadership is dishonest or hypocritical. The most commonly stated core values include the following:
- Integrity
- Quality
- Efficiency
- Teamwork
- Sustainability
- Financial strength
- Customer satisfaction
Lumber Liquidators stated most of these in their corporate documents and on their website in 2015. For example, the Lumber Liquidators’ mission statement is “To deliver quality hardwood flooring at low prices [and be] lean, efficient and sustainable in everything we do…protecting the long-term health of the forests, farms and plantations that are the lifeblood of our business.” It “aims to be the industry leader in sustainability because it’s good for the environment, and because it’s good for the future of our business.”[1]
Leadership further stated in their Code of Business Conduct and Ethics,[2] “Lumber Liquidators is committed to dealing fairly and honestly with its customers, suppliers, competitors and employees.
- You must not use false data or manipulate information in a manner to suggest that our products or services have characteristics or comply with specifications when you know that they do not.
- Suppliers should be chosen on the basis of the price, quality, and desirability of their goods and services.”
All this looks pretty clear and unambiguous on the surface. But if we scratch a little deeper, it becomes clear which values are of super-ordinate importance. The US Department of Justice led a multi-agency investigation into Lumber Liquidators’ sourcing of sustainable materials. The company pleaded guilty to outlawed practices of logging, acquiring, and selling wood products made from endangered species, and demonstrably destroying the habitat of endangered animals such as Siberian tigers and Amur leopards. The company was not just a violator of the Lacey Act but also the most egregious, intentional corporate offender of sustainability practices to date. It was fined over $13 million in a settlement announced by a Virginia federal court on October 22, 2015. Its CEO had resigned a few months earlier. Their stated core value of sustainability was clearly subordinate to short-term profitability and any related bonuses.
We cannot say here that leadership was deceitful, evil, or corrupt. You might conclude otherwise. What we can say is that there was conflict among core values, and not all were practiced equally. Some managers and employees may very well have felt they were taking actions expected of them, consistent with at least one of the company’s core values. The moment employees can pick and choose which of a competing set of values to follow, chaos will reign.
As a Master of Excellence, we have to carefully consider how our stated core values are attached to measures of success (the subject of our next discussed source of ambiguity) and related rewards. We can say with certainty that the presence and size of a reward tied to a core value will always trump a stated value with an absent or lesser reward.
Masters of Excellence mean what we say and say what we mean. The core values espoused by us, an organization’s leaders, make up one of the cornerstones of excellence. We guide desired behavior of members in the culture we lead. To the extent we do that, we engender trust, consistency, brand strength, and loyalty from employees and customers. When we say something is important but encourage or allow practices that conflict with that stated priority, we can easily become a poster child for hypocrisy, derision, and defection. In the Internet age, we cannot hide from who we are perceived to be.
Sadly many examples of stated core values and mission statements are at odds with their organization’s practices. We can expect these disconnects to be exposed sooner or later. Let’s take the initiative to do the exposing. But do it when you can do the proposing on how to tighten alignment among all our values. True, this is not for the faint of heart. Pairing our critiques of what is with construction of the new makes it easier for those in power to hear us. Consider this a key element of Politics 101.
It is surprising how often we can observe that some value we have said is of great importance has no bridge to guide related behavior. For example, it is common for us to say customer satisfaction is one of our highest priorities while having no customer satisfaction policy. We have plenty of other policies. (This is true for you if there was a score of three or more on the C3IQ item 8.) The purpose of such policies is to operationalize our values and to guide purposeful, consistent behavior. The Master of Excellence will identify where the disconnects could occur and then take action to eliminate them.
Even well-established organizations fostering good leadership practices have fallen victim to weak alignment between values and policy. Such is the case with the International Standards Organization (ISO), a nonprofit body made up of experts representing 163 countries. Their purpose is to develop voluntary, consensus-based, market-relevant international standards that ensure and support quality, safety, efficiency, and innovation. Established in 1947, they have published over 21,000 standards primarily addressing manufacturing and technology. The 2016 revision of ISO 9001 standard on quality management systems states the first of four benefits for having such a system is “the ability to consistently provide products and services that meet customer…requirements.” It further states that “top management shall demonstrate leadership and commitment with respect to customer focus.”[3]
It sounds good, and it is. This emphasis on customers is a new element in this standard, a sign we interpret as growing enlightenment. However, while the standard goes on to say leadership is responsible for having a quality policy, it is mute on the necessity for a customer satisfaction policy. If the two are be different, we have ambiguity regarding leadership’s responsibility.
Wait a minute, you might say. Aren’t we splitting hairs here? Isn’t seeking good-quality products and services the same as seeking customer satisfaction? Excellent questions, if I do say so myself. Is it possible to have a technically perfect, high-quality product that a customer is not satisfied with? Consider that many products that are now obsolete were, at the time their demise began, of high quality. That would include typewriters, slide rules, carbon paper, eight-track stereo, monocles, steam engines, buggy whips, floppy disks, and much more. In addition, there are many instances where comparable and competing products win over customers due to factors not entirely related to the product.
One of our customer principles offers some explanation: The customer’s knowledge of and feelings about the producer will color his or her satisfaction with the product.[4] One of the examples we discuss shortly concerns airlines. In short, the absence of a customer satisfaction policy in an organization putting that topic high in its list of core values has a major plank missing in their bridge to excellence.
Values as a lever to advance excellence. Our values are expressed in our personal behavior, what we measure, what we tie to rewards or consequences, and the degree to which our policies guide our expression of those values in daily work and relationships with others.
Excellent policies succinctly create alignment between organizational values and behavior. As we’ve noted, the vast majority of leaders will say customers and their satisfaction are among the most important enterprise priorities. The startling revelation is that few actually have a written policy[5] to deploy that intent. How important, then, can it really be? We can and absolutely must fix that disconnect, using the following guide:
- When creating or revising a policy, create the bridge(s) among our stated values, intent, and daily behavior.
- Fully deploy the policy, instituting a method for eliminating ambiguity about the core value (such as who the customer is).[6]
- Acknowledge that all core values are not of equal importance by communicating which of them is more important than others. It should be clear which value(s) trumps others in the case of conflict among them. Name the vital few.
- Ensure key values are aligned with key performance indicators (KPIs), rewards, and consequences.
Consider this customer satisfaction policy displayed prominently by a major retailer, “We guarantee customer satisfaction by refund, replacement or return.”[7]
Does this policy address a customer’s desired or undesired outcomes?[8] Since the intent is to describe the corrective action the company will take when the customer is unhappy with a purchase, its focus is on the latter. In other words, it’s actually a customer dissatisfaction policy, describing the actions to be taken when dissatisfaction occurs. Compare that to the following policy.
All employees, associates and partners will:
- Proactively solicit customer needs and expectations.
- Confirm that we have understood those expectations.
- Develop, package, deliver, and support our products to meet those expectations.
- Measure the degree to which our customers’ product and outcome expectations are achieved.
- Never blame the user when he or she cannot make a product or process work. Provide understanding and then help. Assume he or she has done his or her best.
- Aggressively seek to close any gap between what our customers expect and what they experience.[9]
Figure 6—Sample Customer Satisfaction Policy
The first four statements on the sample policy emphasize behavior related to customer-desired outcomes. The last statement covers undesired outcomes, results the organization wants to avoid. In this case, there is also a linkage to how the producer will execute its intent[10] to create satisfaction, both proactively and in response to dissatisfaction.
Policy as Values Deployment. A policy is a broad guide to action, often including an objective, a statement of intent and principles. It is a basis for consistent conduct for those working within an organization. The manner of deployment is spelled out without getting into procedural details. The six policy statements in this case are also constructed in a manner that suggests how measures could support accountability and verify execution. The construction of the policy facilitates policy deployment. We will be describing in much greater detail the mechanisms for applying the policy when discussing the VOC in volume 2.
The enlightened leadership of Linn County, Iowa, decided to transform their organization’s culture to focus on customers. They drafted a new strategic plan, defining its mission to “provide all customers the most satisfying products while maintaining sound fiscal management in order to enhance the quality of life [in the county].” Leadership observed the agency had lots of policies but none for customer satisfaction. They wondered whether such a policy could strengthen consistent deployment of their five core values:
- Communicate openly and effectively.
- Demonstrate personal integrity and respect for others.
- Be accountable for our actions and decisions.
- Recognize valued contributions.
- Create a supportive, positive work environment.
To answer that question, they were asked to identify which of the six policy statements (shown in figure 7) might be relevant to the first core value and could reduce ambiguity. They found that at least statements 1, 2, and 5 were not only relevant but also gave guidance on how to deploy the value. For the second core value, statements 1, 2, 4, and 5 fitted.
As they worked down the list of core values, they saw that every point in the proposed customer satisfaction policy offered articulated support and behavioral direction for core values that previously had had little. So they adopted the policy, modifying it a bit to suit their unique context. That one policy had a principal role in deploying all of their core values.
Mission statements, strategies, and policies represent intent, what we can call the voice of leadership (VOL). Procedures are designed to carry out that intent with detailed steps to be taken. Those represent the voice of management (VOM). Masters of Excellence strive to create alignment among the VOL, VOM, and VOC, connecting the dots.
Fantasies that leaders all too often communicate to their organizations masquerade as vision and mission statements. “We are the preferred supplier of X” and “Our customers are our highest priority” are two that routinely show up in various ways. They are fantasies when they are not clearly supported and deployed with success. Why is it that companies with trends such as declining market share over multiple years, increasing customer defections, product recalls, complaints ricocheting around social media, technology that is rapidly becoming obsolete, and other indications of failure to perform feel compelled to put such statements in their key corporate documents?
The most forgiving way to look at the disconnect might be to say leadership is sharing its vision of the future. That could be so if we can see clear evidence in the strategic and business plans that leadership knows what customers want, have measured the degree to which they get it, and have well-developed plans and supporting incentives to deliver. When those little details are missing, we can be sure about at least one thing. We’ve crossed the fine line between vision and hallucination. We might contrast Vital Lies[11] and hallucination. There is a difference. The first involves statements about the present and past that are not true. Hallucination concerns statements about future intent that are not supported with a clear bridge to get there. There is no medication for this ailment, but there is a treatment plan. It starts with a prescription to practice truth in leadership.
Speaking of treatment plans and incentives reminds me of a values disconnect I’ve seen a number of times in health care. On the one hand, many health care leaders and professionals are adamant that patient concerns are paramount and their field should not be thought of as a money-oriented business. Facts can suggest otherwise. The US government pays doctors for treating Medicare patients, plus an additional 6 percent of the cost of any drug they administer in their office. If there is more than one drug that could provide comparable results but the drugs differ in cost, which drug should a doctor administer? If we were the patient, I think it would be fair to say we’d like to get the least expensive one. From the ten-year period from 2005 through 2014, the drug-cost portion of health care has increased 17 percent, faster than any other Medicare program segment.[12]
It does look like there is an incentive that works to focus on the money-oriented aspect of health care for at least some in the business. The Centers for Medicare and Medicaid Services (CMS) thought so too. They proposed a two-phase change to begin in 2016. It would pay doctors more for prescribing the drugs shown to be more effective. Imagine that! Among those opposing the idea include doctors’ groups, drug producers, and, naturally, their favorite politicians.
Sometimes the truth is scary. Please review the following three mission statements of real competitors. As you do it, let’s play “Where’s Waldo?” In this version of the game, see if you can find the word “customer” in these statements. What else is a main difference among the following statements?
- Mission Statement, Airline A: To be recognized worldwide as the airline of choice.
- Mission Statement, Airline B: Airline B is committed to providing every citizen of the world with the highest quality air travel to the widest selection of destinations possible. Airline B will continue to modernize its fleet while maintaining its position as the largest air carrier in the world, with the goal of becoming the most profitable airline. Airline B is the airline that treats everyone with equal care and respect, which is reflected in the way each Airline B employee is respected. Airline B recognizes that its employees are the key to the airline’s success and invests in the future of its employees. By investing in tomorrow’s technologies and by following a strict adherence towards environmental regulations, Airline B demonstrates its commitment to the world environment.
- Mission Statement, Airline C: Airline C is dedicated to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.
Does it matter that the first two statements don’t include the mention of customers? Don’t be confused by the reference to “every citizen.” Unless every citizen is a customer, that broad brush is a platitude without substance. Could one of those firms be at all related to the YouTube music video released by musician Dave Carroll in 2008 called “United Breaks Guitars”? Yup. It was viewed over three million times in its first ten days and had over fourteen million views by the end of 2014. It was produced after he had spent months attempting, without success, to get the airline to respond to the tossing of his guitar case by baggage handlers, resulting in his guitar getting smashed.[13]
What we see is that the focus of the mission statements differs in points of view. Views can be producer-centered or customer-centered.
Airline C is Southwest Airlines (SWA). Customers consistently ranked SWA in the top two airlines as the most satisfying for more than twenty years. It is not a coincidence that they are the only major US carrier to have had forty-two consecutive years of profitability and 154 consecutive dividends paid. They flew the most passengers annually and had not experienced any layoffs or bankruptcy (as most others previously had) through 2014. In that year, employees received a record of $355 million in profit-sharing (the first in the country to offer such a plan),[14] and investors had their stock value go up over 100 percent in 2014. There are several winners here: customers, employees, investors, and management. There’s a big loser, too: their competitors.
Major upheavals in the economy, social fabric, and technology create huge stresses on many organizations. A crisis tends to lower the water level to reveal what had been hidden obstacles to success. Such was the situation with September 11, 2001. Although this dramatic terrorist assault on what was arguably the economic heart of America took only a moment to occur, its intensive fallout played out over several years.
Among the industries hit hardest were airlines. Five US airlines went bankrupt by 2005 and eight by 2011, as shown in the figure below. On the other hand, SWA was one of the few to make a profit in 2002 and had a market capitalization value of $9.11 billion by the fall of that year, bigger than the value of all the other major airlines combined.[15] It is reasonable to conclude again that this triumph in the face of extreme adversity was not a coincidence.
COMPETITOR BANKRUPTCY FILINGS 1990-2011
· Continental: December, 1990 · America West: June, 1991 · US Airways: August 2002 · United: December, 2002 · JetBlue: September, 2002 · Northwest: September, 2005 · Delta: September, 2005 · AirTran: April, 2008 · Alaska Air: November, 2011 · American: November, 2011 |
Figure 7—Competitors Dive as Southwest Soars
We were talking about how the truth can be scary. It can also be enlightening and inspiring, as we see with SWA and its customers. Most of the legacy carriers as of 2015 advertised ticket prices that were incomplete. The price of the product was really far higher after hidden baggage and other fees were added at check-in. To think that customers are too stupid to notice is the height of arrogance. SWA’s advertised prices included the first two bags for free. So maybe it is true that the truth will set you free. I like to think so.
Figure 8—A Nonfinancial Measure of Success
The irony is that the producer-centered carriers who put emphasis on being biggest and most preferred in their mission statements have lost out on both counts to the ones most focused on customers. This picture is not, of course, unique to airlines. It seems to be a universal affliction.
The voice of leadership is dependent on understanding the heart, mind, and voice of customers to remain relevant. A leader who rarely talks with actual users of his or her enterprise’s products will not be as effective as possible. That means the VOL must be aligned with the VOC. Entrepreneurs very often start their businesses because of their own experiences as a customer who didn’t or couldn’t get what they wanted from an existing operation. No one could deny that Herb Kelleher (Southwest Airlines), Steve Jobs (Apple), Sir Richard Branson (Virgin), John Boggle (the Vanguard Group), Elon Musk (Tesla), and other highly successful entrepreneurs stayed exceptionally engaged with customers who used their products.
Effective leaders want and need their intent deployed. When that intent, described in mission statements, core values, and strategic plans is vague, unimaginative, and impersonal, we diminish our opportunity to be inspiring and better than just average. Enter the VOM, who will try to fill any gaps in the VOL with procedures (and related bureaucracy). They will do the best they can to understand the VOL and push their VOM constructively. One test of how well this is done is to ask, when reading a procedure, whether or not it would be viewed by prospective employees as an enticement to join the enterprise. Let’s continue our examination of SWA to see how this has worked.
If you have been a passenger on any of the US legacy carriers (American, Delta, or United), you are likely to have experienced shortly after boarding a flight attendant reading (or stating with the same enthusiasm as if reading for the thousandth time) safety instructions over the public address system. On some carriers, this is accomplished by shutting off all the lights and turning on a video cranked to maximum volume to capture your undivided attention. The message involves how to fasten your seatbelt. You have been required by US law to have these in your car since 1968 and then first required to use them in 1984.[16] Perhaps the airline’s reminder is just what you need because you don’t drive, haven’t forced your kids to buckle up, are a slow learner, have a death wish, or have amnesia. The message also tells you how to use the bottom of your seat as a flotation device. The presumption here is you will be flying over water and you will be able to float after falling from the sky in an unplanned dive. You are also reminded not to smoke, how to put on the oxygen mask, where the exit doors are, and so on, and pay strict adherence to all further instructions…or else! I have asked flight attendants on different carriers why they all do this. The stock answer has been that the Federal Aviation Administration (FAA) requires them to do so. But that is not true!
Consider some evidence. First, actually the pilot has the responsibility to make sure passengers know how the seat belts work and fasten them before takeoff. The FAA does not specify exactly what to say or how to do this. Second, how is it that SWA gets away with not using the same standardized, dare we say, condescending, approach as other airlines? It must not be required. Their flight attendants sometimes sing the instructions, tell jokes, do rap or poems, put on skits, and otherwise engage passengers. On SWA, we may very well experience a planeload of passengers giving the flight attendant an enthusiastic ovation after the safety announcement. Does it sound like their safety procedure is in alignment with their mission statement? Does it look like employees are allowed (encouraged or expected) to demonstrate some individuality in how they express company spirit while complying with the law? Does this way of doing things cost as little as the standard industry approach? Have they differentiated themselves? Could their competition copy them and do it too? Yes, yes, a thousand times yes. If SWA can do this and get away with it, one could easily conclude the FAA thinks this is just fine and dandy. They do.
There is one more detail about alignment. The little black book flight attendants refer to for their compelling safety message is pretty much the same across all the legacy carriers. They are rectangular. The SWA one is heart-shaped, perhaps related to the company logo (a winged heart), stock symbol (LUV), and their home airport (Love Field). Flight attendants are supplied with resources such as an entertainment kit with a manual on ways to interact with passengers, called “Life’s Just Fun and Games.”[17]
One of SWA flight attendants was renowned for engaging his planeload of customers in his use of safety messages delivered in rap. SWA leadership recognized David’s creative modeling of their core values. They asked him to deliver the company’s financial results to Wall Street analysts the same way. He did and was given a standing ovation.
This would be a good time to see how this issue of alignment among mission, values, policy, and behavior is relevant to your own situation. Consider your C3IQ score for item 8. A score of greater than or equal to three indicates the enterprise has policies covering priorities stated in its mission, core values, and/or strategic plan. That’s the good news. I’m not a fan of bureaucratic and unnecessary paperwork, but an organization that says employment must not be based on discriminatory practices is hardly serious about it when there is no policy addressing what behavior is acceptable or unacceptable. The absence of the critical few policies necessary to support core values is a cause of ambiguity and uncertainty. We either mean what we say or we don’t. The Master of Excellence will identify which core values have missing or inadequately supportive policies and close the gap(s).
Leader’s Action 6: Core Values Ambiguity (See Appendix 1 of book) or Suite 1 – Mastering Excellence Leader’s Action Companion Tools
This brings us to C3IQ item number 14. A score of less than or equal to three says a customer satisfaction policy is weak or missing. Sadly this is the norm across the vast majority of enterprises, no matter the industry. If that is your situation, review the six-point policy described above to see if putting a version of it in place could close the gap. This can be an essential step if we want to get to a score of five on items 14, 15a–d and f, and 18. What else should you do next?
My assumption is that you are reading this, at least in part, because you aim to be a truth-teller. Although dissidents often take up this role, one of my favorite leaders in this regard was Mikhail Gorbachev, general secretary of the Soviet Communist Party (1985–1991). Upon coming to power in March 1985, he introduced two strategic programs: perestroika (economic reform) and glasnost (openness). Glasnost is a model for how far-reaching and transformational an engaging truth-telling campaign can be. Key outcomes wanted were modernizing the Soviet Union, adopting democratic practices, and ending the Cold War with the West. Much of that was achieved by 1990. That included the installation of democratic governments in all previous Soviet bloc nations, the end of the Cold War (marked by the destruction of the Berlin Wall and German reunification), and Gorbachev being personally awarded the Nobel Peace Prize.
As with any large-scale change, there were unintended consequences. Two that are notable is that Gorbachev lost his formal national leadership position and the Communist Party’s controlling political power over several other eastern European countries was terminated. As he later related, his personal loss of power caused him to see his failure to completely realize everything he set out to do as an enduring regret. He nonetheless did not regret being the catalyst for seismic changes in the growth of democratic society. Like most things in life, the size of the risk is often related to the scope and magnitude of the contemplated change. For those of us working to be effective leaders, remember the words of Machiavelli from Chapter 1.
None of my client leaders has yet won the Nobel Prize. I do have hope. Many have won significant recognition such as Baldrige National Awards, industry best-in-class recognition, and other acknowledgments of excellence as a direct result of applying C3 practices. The most successful ones all started with a clear statement of strategic intent and an unambiguous path to deployment. Engaging others in that effort is essential to personal survival, no matter where you are in the hierarchy.
[1] The Lumber Liquidators’ home page at http://www.lumberliquidators.com/sustainability/sustainability/ (as of March 15, 2016) states, “Our Mission: Since our first store opened, Lumber Liquidators has had a very simple mission: to deliver quality hardwood flooring at low prices.
That isn’t just a slogan. It’s a guiding principle that affects every facet of our business. Delivering hardwood floors for less requires us to be lean, efficient and sustainable in everything we do. We do this by minimizing our energy and land use; having an efficient supply chain; seeking to work with credible and trustworthy suppliers; avoiding waste; and investing in, and protecting, the long-term health of the forests, farms and plantations that are the lifeblood of our business.”
[2] This is an excerpt from Lumber Liquidators’ Code of Conduct and Business Ethics on the home page at http://www.lumberliquidators.com/ (as of March 15, 2016).
[3] The first clause (5.1.2) in the Customer Focus section of the 2016 ISO Standard.
[4] See the customer principles in Chapter 20.
[5] A policy is not to be confused with an exhortation, slogan, aspiration, or wish. Simply stating we will not discriminate on the basis of gender, ethnic background, religious preference, and other nonjob factors when hiring does not constitute a policy unless it’s deployed.
[6] The solution to eliminating ambiguity about the customer is addressed in Chapter 20.
[7] Labeled as Walmart’s customer satisfaction policy, this is displayed on the wall at the returns or customer-service desk.
[8] Differentiating between these two kinds of outcomes, referred to as Dimensions 1 and 2, are discussed in chapters 8 and 10.
[9] This was developed by the author and his colleagues for their own use and provided to many of its clients with permission to use.
[10] This is the producer’s process, Dimension 8.
[11] The concept and importance of Vital Lies is discussed under assumptions, coming shortly in this chapter, and then applied in Leader’s Action 8. A vital lie is a constraining assumption not supported by evidence. Also see appendix 2.
[12] “A Fix for Medicare Drug Spending,” Bloomberg BusinessWeek, May 31, 2016, 8.
[13] “United Airlines shows how not to run your business,” Forbes, July 24, 2009.
[14] “Southwest Airlines’ 41st-consecutive profit sharing payment,” Wall Street Journal, February 4, 2015.
[15] BusinessWeek, August 5, 2002. The other ten totaled $7.82 billion in market cap.
[16] This is required in every state except New Hampshire.
[17] See SWA’s core values, published on its website as of 2016.
For More Information
More of this chapter will be added soon or you can purchase the book, Mastering Excellence: A Leader’s Guide to Aligning Strategy, Culture, Customer Experience & Measures of Success on Amazon.