My latest fix just arrived from Amazon:
Think those titles reflect my interests in any way? (You can click the picture to see a larger version).
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A tale of two airlines – Or why every company needs a Chief Apology Officer
When your company screws up majorly – what do you do?You can play hardball and stick to the rules, only apologizing and compensating your customers as a very last resort. For a wonderful example, check out this story of a Continental flight that was delayed 32 hours while plane toilets malfunctioned so sewage was running down the aisles.
What compensation did Continental offer?
…32 hours into the whole ordeal, we are in Newark, ready for the fun of customs and immigration, and on our way out of the gate Continental issues the final slap in the face—a voucher for one free drink the next time we fly with them! I wanted to tear it up and tell them where they could shove that drink, those bastards.
Continental HAS since apologized but I suspect that it’s just too little too late.
Alternatively, you can do what Southwest Airlines does and have a person in charge of apologizing:
No airline accepts blame quite like Southwest Airlines, which employs Fred Taylor Jr. in a job that could be called chief apology officer.
His formal title is senior manager of proactive customer communications. But Mr. Taylor — 37, rail thin and mildly compulsive, by his own admission — spends his 12-hour work days finding out how Southwest disappointed its customers and then firing off homespun letters of apology.
He composes about 180 letters a year explaining what went wrong on particular flights and, with about 110 passengers per flight, he mails off roughly 20,000 mea culpas. Each one bears his direct phone line.
I think that’s incredibly cool for a couple of reasons:
- Taylor writes homespun letters that carry his direct phone number. No pre-written form letters with the company’s 1-800 number on’em. Direct responsibility and accountability.
- These cases aren’t handled by lowly customer service reps who stick slavishly to company regulations and scripts – these are individual decisions based on what’s right and wrong in the given situation.
There’s also a Business Week podcast featuring Fred Taylor and here’s a story of how this works out in practice, from a traveler stuck on a Southwest flight that got delayed for 5 1/2 hours:
Bob Emig was flying home from St. Louis on Southwest Airlines this past December when an all-too-familiar travel nightmare began to unfold. After his airplane backed away from the gate, he and his fellow passengers were told the plane would need to be de-iced. When the aircraft was ready to fly two and a half hours later, the pilot had reached the hour limit set by the Federal Aviation Administration, and a new pilot was required. By that time, the plane had to be de-iced again. Five hours after the scheduled departure time, Emig’s flight was finally ready for takeoff.
A customer service disaster, right? Not to hear Emig tell it. The pilot walked the aisles, answering questions and offering constant updates. Flight attendants, who Emig says “really seemed like they cared,” kept up with the news on connecting flights. And within a couple of days of arriving home, Emig, who travels frequently, received a letter from Southwest that included two free round-trip ticket vouchers. “I could not believe they acknowledged the situation and apologized,” says Emig. “Then they gave me a gift, for all intents and purposes, to make up for the time spent sitting on the runway.”
I suspect that what really mattered here is both the formal apology and compensation that arrived a few days after the event, but especially the fact that the Southwest employees present handled the situation well. In Emig’s words the “seemed like they cared”.
Contrast this with the Continental sewage flight story above:
At one point I went up to the gate and one of the crew happened to be there. He was either the pilot or the co-pilot. I was trying to speak to the women behind the counter, telling them that we’d been waiting for hours and people were getting really upset about the lack of communication. This pilot stepped in and snottily told me that they were working on and I should just go sit back down. When I told him they needed to keep the passengers better informed of the situation he literally screamed at me, yelling “Don’t tell me how to do my job!” and then he stormed away. From that point on he earned the nickname Captain Customer Service.
There are two major points I’d like to make here:
1: Apologizing is good business.
Studies show, that a well-timed, honest apology from the company makes customers more understanding of the situation, less likely to cause problems and more likely to remain customers.Studies from hospitals show that when doctors honestly apologize for medical mistakes, people are also much less likely to sue:
Colorado’s largest malpractice insurer, COPIC, for example, has enrolled 1,800 physicians in a disclosure program under which they immediately express remorse to patients when medical care goes wrong and describe in detail what happened. The insurer compensates patients for related expenses, including insurance deductibles for follow-up medical care; lost time at work; and baby sitters…
Buckley said malpractice claims against these 1,800 doctors have dropped 50 percent since 2000, while the cost of settling these doctors’ claims has fallen 23 percent. The University of Michigan Health System has cut claims in half and reduced settlements to $1.25 million from $3 million a year since developing a disclosure policy in 2002, said Richard Boothman, chief risk officer.
This runs counter to traditional thinking:
”Doctors worry that if they talk to the patient, they’re more likely to be sued,” Hanscom said. ”Our feeling is just the opposite. It’s the shutting down that angers patients. We’ve heard from patients in this situation that everyone almost shuns them.”
2: Employees who care handle these kinds of situations much better
This is crucial, because you can only care what happens if you’re happy at work. If people hate their jobs, dislike their coworkers and loathe their managers, there is no way in hell you can make them care about the job and about the customers.When employees feel good at work, when they like their coworkers and, indeed, the company, they will go to extraordinary lengths to make customers happy. This means that any problems that do occur become nothing more than another chance to demonstrate good customer relations and make your customers even more loyal to your business.
Related:
- Top 5 reasons why “The Customer is Always Right” is wrong
- Create a culture of forgiveness in the workplace
- Monday Tip: Make an apology
- Four Fantastic Phrases at Work
Btw: I can’t believe I’m the first to suggest that after a flight where the toilets malfunction so sewage is leaking down the aisles, maybe it’s time Continental changed their name to Incontinental airlines. Ba-da-boom. Thank you, thank you, I’ll be here all week!
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A question for ya: Happy companies in Mexico..?
I got a very nice email from Jorge who writes:I would like to ask you if you know of any company in Mexico doing this radical stuff. Being a Mexican myself, I would love to work in happy-democratic-radical Company. Are there any here in Mexico?
That’s a great question. I don’t know of any – but maybe you do? Write a comment if you’ve heard of any happy Mexican companies!
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Monday Tip: Change your to-do list to a could-do list
Are you also burdened by your todo-list? Feeling the pressure of overdue items screaming at you in red? Want to stop procrastinating and do something about it?Here’s a tip from Hilda Carroll, who wrote me with a great idea that you can try this Monday:
I saw your request for tips, and this is something I’ve been doing for several months now when I noticed my ‘To Do’ list was generating a sense of frustration.
Now, I write a ‘Could Do’ list, instead of a ‘To Do’ list. When I draw up my daily lists of tasks I refuse to see it as stuff I have to get done. When I did that in the past, I’d feel a sense of dissatisfaction at the end of the day when I didn’t have everything ticked off, despite the fact that I knew when I wrote it, it was highly unlikely I’d get to everything.
It’s a tiny shift, but by viewing it as a list of things I could do today, I’m relieving the pressure to get them all done. It feels like there’s more of an element of choice around how I spend my time – I don’t have to do x today, I could leave it till tomorrow and focus more attention on y today instead.
Now, at the end of the day, I don’t mind how many ticks I do or don’t have against the items on my list, and I feel better about my day’s work because there is no shadow from what I should have done and didn’t.
I think that’s a fantastic idea. It’s a subtle shift inside your own mind that is likely to help you get started. In my experience, taking the pressure off yourself makes you more likely to get stuff done. Which is of course a sharp contrast to traditional business thinking which holds that greater pressure = greater performance.
If you’re still not getting your could-do items done, you can also read my previous post on How to procrastinate effectively.
The Chief Happiness Officer’s Monday tips are simple, easy, fun things you can do to make yourself and others happy at work and get the work-week off to a great start. Something everyone can do in five minutes, tops. When you try it, write a comment here to tell me how it went.
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The radical company
Sally Hogshead has a great post called How to be an anarchist that opens with these words:
They’re lighting the town square ablaze, running amok through the embassies, yanking down statues and looting the stores.
Who? Your consumers. And if you’re smart, you’ll grab a torch and join them.
Sally’s post is mostly about anarchy in media – about:
…the power shift from established forms of information to consumer-directed content. From encyclopedias to Wikipedia. From publishing to blogs. From movie theaters to iPod screens. From retail locations to pop-up stores. And in case you hadn’t noticed, from traditional paid media to all those new forms of digital media spawning like bunnies.
But I believe business anarchy has a much wider scope, and that it’s time for us to break away from the old mental model that defines a company as a way to control employees.
The time has come for the radical company.
What does that mean? To paraphrase Paolo Freire:
The radical company, committed to human liberation, does not become the prisoner of a “circle of certainty” within which reality is also imprisoned. On the contrary, the more radical the company is, the more fully it enters into reality so that, knowing it better, the company can better transform it.
This company is not afraid to confront, to listen, to see the world unveiled. This company is not afraid to meet the people or enter into dialogue with them. This company does not consider itself the proprietor of history of all people, or the liberator of the oppressed; but it does commit … to fight at their side.
Freire was talking about the radical human – I’ve rewritten his quote to talk about the radical business and it still makes perfect sense. To make a company happy you must be willing to be radical, to commit the company to the employees’ freedom.
Also, you must be willing to do this against business tradition and against the advice and recommendations of people who just don’t get it.
My good friends at WorldBlu make a living teaching organizations to be more democratic and they recently published their 2007 list of most democratic companies. This list shows that companies that are run democratically, with few remnants of the old, military-style, hierarchical, command and control structures perform better and more efficiently today.
They’re also happier workplaces because we like freedom. We like being able to take responsibility, make decisions and grow into leadership as fits us. On the other hand, we hate being stuck in bureaucracy, red tape, meaningless rules and endless power struggles.
A horrible case: Alabama A&M University who has this policy in case of a death in an employee’s family:
Staff members shall, upon request, be granted up to three (3) days annually of bereavement leave for the death of a parent, spouse, child, brother or sister, grand parents [sic], grand parents-in-law, grandchild, son or daughter-in-law, mother-in law, father-in-law, brother-in-law, sister-in-law, step children, children-in-law, aunts, uncles, nieces, nephews, and first and second cousins. Other relationships are excluded unless there is a guardian relationship. Such leave is non-accumulative, and the total amount of bereavement leave will not exceed three days within any fiscal year. If additional days of absences are necessary, employees may request sick or annual leave, after providing an explanation of extenuating circumstances.
(Via Gruntled Employees, who has some pointed words about this case :o)
A good case: Nordstrom’s, who only give their employees one rule:
Rule #1: In all situations, use your good judgement
In the excellent book The Second Cycle – Winning the War Against Bureaucracy, Lars Kolind wrote about how easy it is for companies to get stuck in a bureaucratic, controlling mindset – especially as they grow older, bigger or more successful. He also outlines his recipe for breaking out of this mindset, which includes A Collaborative Organization, i.e. one where leadership is distributed as much as possible.
Luckily, more and more companies are starting to realize that command and control style leadership:
- Is less effective
- Creates more stress
- Creates more bureaucracy and red tape
- Reduces creativity and innovation
- Makes employees cynical and disengaged
My favorite example of a radical organization is still Semco in Brazil where (just to mention a few examples):
- Employees set their own working hours
- Employees choose their own salaries
- All meetings are voluntary and open to everyone
- Employees hire their own bosses
- Employees choose which leader they want to work under
Radical companies give their employees more freedom and find that people become happy at work, and consequently are more engaged and productive. This also makes the company more profitable, which Semco has certainly found.
So making your company radical is not only fun it’s also good business.
And there has never been a better time for it. We’re richer, more educated and better informed than ever before in the history of mankind. We have the knowledge, the means, the tools and the drive to finally change business for good.
Our reward will be companies that are:
- More robust – because people who can lead themselves respond more effectively to crises
- More productive – because you don’t get bogged down in red tape
- More nimble – because the company will be able to change faster when employees have more responsiblity
- More fun – because this is closer to how we really work as human beings
And to anyone who thinks “yeah, nice idea sure. Too bad it’s impossible” I refer you to this quote.
What do you think – would you like to work in a radical company? Have you tried it already? What was it like?
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An underpaid CEO? How radical!
In my last post I wrote about how Costco treats its employees better than their competitors, get huge profits as a result – and catch flack for it from stock analysts who want them to spend less money on their people. Go figure.So here’s a good question… considering that Costco spends 40% more on their employees than their closest competition, how well is Costco CEO Sinegal himself paid?
Despite Costco’s impressive record, Mr. Sinegal’s salary is just $350,000, although he also received a $200,000 bonus last year. That puts him at less than 10 percent of many other chief executives, though Costco ranks 29th in revenue among all American companies.
“I’ve been very well rewarded,” said Mr. Sinegal, who is worth more than $150 million thanks to his Costco stock holdings. “I just think that if you’re going to try to run an organization that’s very cost-conscious, then you can’t have those disparities. Having an individual who is making 100 or 200 or 300 times more than the average person working on the floor is wrong.”
So here’s a company that pays its employees more than average – and its CEO waaaay less. I like it!
This also contributes to making people happy at work. While I always say that money can’t make us happy at work, a salary that’s too low or blatantly unfair (say one that is 200 times smaller than the CEO’s) can definitely make us unhappy.
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Analysts to Costco: Stop treating your employees so well
You’d think that if a company treats its employees well (a lot better than their competitors) and gets great business results because of it, that this company and it executives would be celebrated and praised for it.You’d be wrong.
The New York Times has a great article about Costco, the huge American chain of supermarkets who spend much more on their employees than their main competitors:
Costco’s average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam’s Club. And Costco’s health plan makes those at many other retailers look Scroogish.
According to Costco’s CEO Jim Sinegal, this makes good business sense:
Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco’s customers, who are more affluent than other warehouse store shoppers, stay loyal because they like that low prices do not come at the workers’ expense. “This is not altruistic,” he said. “This is good business.”
The results are pretty impressive:
Costco’s stock price has risen more than 10 percent in the last 12 months, while Wal-Mart’s has slipped 5 percent. Costco shares sell for almost 23 times expected earnings; at Wal-Mart the multiple is about 19.
So how do stock analysts react to this? They tell Costco to start treating their employees worse:
Emme Kozloff, an analyst at Sanford C. Bernstein & Company, faulted Mr. Sinegal as being too generous to employees, noting that when analysts complained that Costco’s workers were paying just 4 percent toward their health costs, he raised that percentage only to 8 percent, when the retail average is 25 percent.
“He has been too benevolent,” she said. “He’s right that a happy employee is a productive long-term employee, but he could force employees to pick up a little more of the burden.”
This makes zero sense to me – but it illustrates two things perfectly:
- Traditional business thinking in some areas still regards employees as resources, that like any other corporate item must be bought as cheaply as possible.
- Executives who believe in treating employees well are faced with pressure from analysts and the stock market to stop doing so and start being more like anyone else – regardless of the results their strategy has been getting them so far.
This is partly why Jim Goodnight, the CEO and owner of software company SAS Institute refuses to take his company public; he knows that it would become much more difficult to keep SAS employees as happy as they currently are (read about how SAS keep their employees happy).
One company did manage to go public and keep their identity: Google. When they announced their IPO, founders Brinn and Page made it very clear that they would continue to run the company their way. They promised to go on treating their employees extremely well and making long-term decisions rather than living from quarter to quarter. If investors didn’t care for that, they were kindly requested to take their money elsewhere. Google being Google, investors flocked to buy the stock anyway – less famous companies might not get away with this approach.
To me, it makes perfect sense that treating employees well makes them happy and that happy companies make more money – and this is backed up by many studies. To give one example, the 100 best companies to work for in the US, have outperformed the general stock market by a factor of 3.
It’s time that investors and stock analysts realized this and started demanding of companies, that they make their employees happy. This not only increases profits, it’s one of the best and most efficient ways to do so.
UPDATE: Turns out the highly up-to-date article from the NY times I reference is 2 years old. So much for my amazing powers of observation :o) Fortunately the tendency still holds and Costco still treat their people better AND outperform Walmart on the stock market.
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Quote
Treat the enterprise as a community of engaged members, not a collection of free agents. Corporations are social institutions, which function best when committed human beings (not human “resources”) collaborate in relationships based on trust and respect.
Destroy this and the whole institution of business collapses.
– Henry Mintzberg (Via Workplay)
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Monday Tip: Make a happy email signature
I don’t know about you but I get a LOT of email! Even after the spam filter has done its thing I’m still more or less deluged and of course every single mail must be answered, which means I also send a lot of mails (btw: If you’ve sent me email and I haven’t answered – have patience, I will :o)Every email says something about the person who’s sent it. It serves in some way to tell people who you are. So your mission this Monday is to make yourself an email signature that somehow expresses who you are and what you do and which will make whoever receives your email a little happier.
I’ve seen many great examples. My Iowan buddy Mike Wagner signs all his emails:
Keep creating,
MikePhil Gerbyshak who blogs at Make It Great of course has no choice but to sign his
Make it a GREAT day!
PhilSome people end their emails with a funny quote or a wise saying, such as these:
All generalizations are false.
I don’t suffer from insanity. I enjoy every minute of it.
“Very funny, Scotty. Now beam down my clothes.”
So think about how you can sign all your mails in a way that expresses who you are AND makes whoever reads it a little happier. If you come up with something cool (or if you already use a great email signature), please post it here in a comment – I’d love to see how you do it :o)
The Chief Happiness Officer’s Monday tips are simple, easy, fun things you can do to make yourself and others happy at work and get the work-week off to a great start. Something everyone can do in five minutes, tops. When you try it, write a comment here to tell me how it went.
Google’s dress code:
