Category Archives: Leading

Running the Gauntlet for Innovation


If you Google the phrase “Boeing Stock Price and the 787”, you will find 1.7 million references.  Now I would have to say that I did not review every one, but all of the references on the first three pages were negative and critical of the company, its leaders, or the product.  Several bordered on being “alarmist”.


As reported in the article by Brad Stone and Susanna Ray, the Boeing 787 Dreamliner’s carbon-fiber body and new electrical system give it a reduced weight, which allows it to burn 20 percent less fuel than the 767 midsize airplanes it’s meant to replace. The interior cabin features cathedral-like archways to reduce the sense of claustrophobia and enlarged windows that dim at the touch of a button. Because of the new, stronger composite materials, the cabin can also be maintained at higher pressure and humidity, so travelers feel fresher at landing.   A remarkable piece of technology.  But this apparently isn’t what we like to read about. 


B787 InteriorAfter a battery caught fire after landing in Boston, and another one triggered a fault on a plane bound for Tokyo, the FAA grounded the entire fleet, casing Boeing and their customers some serious heartache.


The behavior by regulators, reactions by Wall Street analysts, and reporting by the world press just makes it that much easier to see how today’s CEO’s should act with more reserve, be less tolerant of risk, and more inclined to narrower visions.   There are considerable forces that seem to conspire to punish those who push the envelope.


I was thinking about Boeing this week after making a stop at Sarasota International Airport where the organization Freedom Flight landed three beautiful WWII bombers and fighters so that people like me could walk through them.  Events like this also brought out a number of veterans, many former pilots during that war, who were there with their hats on – pictures in hand – proud to tell their stories to the people they met.


I had the extreme pleasure to be standing in line with one of these veterans.  When he was 18 years old he was stationed in the Pacific as a part of the ground crew responsible for patching up the bombers after they returned from a mission – shot up, broken and limping.   He told me how excited they were in 1942 to receive the first of the new B29 Super fortresses from Boeing.  They were bigger, carried heavier bomb loads, were more heavily armed and flew farther than the B24’s, and B17’s they  were built to replace.


On one Sunday, he recalled vividly, we were all awakened at 0300 hours (that’s early) because of a crisis.    On one of the early missions, the hydraulic lines were found to be freezing so that the bombers could not retract their bomb-bay doors.  If you were ever a bomber pilot, you know how serious a problem this could be.   It turns out that Boeing had not anticipated that our pilots would fly these planes routinely at such high altitudes (which I imagine we all would do to avoid enemy anti-aircraft fire).   In the days when the cabins were not insulated or pressurized, the temperatures could drop below freezing pretty fast.


B17The maintenance crews worked around the clock to convert the hydraulic actuators to electrical ones far more impervious to the cold.  In this case, while the oversight by the aircraft engineers was serious, the attention of everyone was on “how to fix it” and move on.  That was the environment.


I don’t know for sure, but I imagine that was not the only engineering SNAFU to have happened on the various new versions of planes that were introduced during the Second World War.   Each one was introduced as an improvement on the ones that came before.   We always sought to learn from our prior air combat experiences and bombing runs so that we could innovate and improve on prior models.  In this way we steadily came to fly higher, faster, farther, and safer than ever before.


One thing is true about innovation.  Whenever you try something that you never have before, things do not always work as planned.  Innovation has risk, and without the acceptance of some risk, no innovation is likely.   Yes, we made mistakes, but we learned from them, quickly.   We fixed the defects and built onward from there.


In today’s world where we report on your mistakes, globally, within minutes, it is no wonder that CEO’s and their Boards get skittish.  This was especially so in 2003 for Boeing when the Dreamliner project was born.  The company had just been eclipsed by Airbus as the largest airplane manufacturer on the planet. After the 2001 terrorist attacks in New York, airlines were reluctant to make massive new investments in airplanes.  So perhaps while Boeings execs and their Board needed something big, they couldn’t stomach the risks associated with such a massive undertaking.  If they stumbled, so too would their stock price.


So, in addition to all the exciting new technologies introduced on the Boeing 787 Dreamliner, the company also conducted a bold experiment with regard to its business model.  Designing and introducing a new generation airliner is a big task, costing billions of dollars.   To reduce their own risk, Boeing decided to partner with key external suppliers who would be asked to take responsibility for large subsections of the plane which could be built by them and then shipped to Everett, Washington for final assembly.   The suppliers took on a share of the overall project risk and in return were entitled to a share of the net profits.   In total, Boeing outsourced about 70% of the components and systems comprising the Dreamliner – something never before attempted.


Coordinating the manufacture of the more than 6 million parts was no small task even if it is all happening in your own back yard.  Doing so on a global scale proved massively challenging.   Coordinating design and manufacturing in this way proved extremely complex and the project was fraught with cost overruns, technical problems, and delays.


To many this whole story is symptomatic of a larger problem – – how to create innovation in mature economies – as most Western ones are.  Venture capitalist Peter Thiel is one who has seen it coming.    In the Stone and Ray article, he is quoted as saying “There is so much incrementalism now. Even back in the ’90s there were companies like Amazon (AMZN) that were willing to do big things. That has gone out of fashion now.” Thiel points to SpaceX and the electric car company Tesla Motors (TSLA), both run by Elon Musk, as the rare examples of recent attempts to leap forward boldly. Yet Musk often gets portrayed as a quixotic dreamer. “I think this reflects the insanity of our country, that anything non-incremental is seen as insane,” Thiel says.


.  .  .  .  .  .  .  .  .  .  .


This situation at Boeing in 2013 all seems far removed (both physically and philosophically) from the bases in the Mariana Islands in 1943 where my veteran colleague spent his later teen age years fixing what needed to be fixed in order that we could do what needed to be done.   It didn’t matter who was to blame, only what needed to be done to fix it.  Too bad we are forgetting where we came from.


Leading into the headwind


Standing up against the kind of public pressure faced by Boeing can be a challenge, but research is now revealing that innovative companies are typically led by innovative CEO’s (see the reference article by Hal Gregersen).  These are people who have the courage to ignore the noise and act in a hands-on way that demonstrates to their organization that bold ideas are indeed welcomed and anticipated.


Innovative CEO’s are innovation researchers. They read, go to TED conferences, visit supplier and competitor companies and venture out into the front lines where customers and employees live.  They ask provocative questions, and are always making surprising observations.  They network with other creative thinkers who think it is fun to speculate about the future.  They encourage idea generators inside their own businesses.  They encourage experimentation and are genuinely excited to learn the outcomes.


Maybe Elon Musk is a California nut-job dreamer.  But without people like him, would we ever take steps forward?


Do you want to be an innovator CEO?


First, stop talking—start doing. Pick a problem that matters to you. Start asking better questions about it. Make surprising observations, build on the ideas of others, build prototypes and see if you can make them work.  Get your hands dirty in invention.


You just might surprise yourself by how far your organization can go.


Other Resources:


Stanford Study Finds Going Public Hurts Innovation,by  Bernhard Warner on January 17, 2013,


Closing the Great Innovation Gap, by Hal Gregersen on June 06, 2012,


Boeing’s 787 Dreamliner and the Decline of Innovation, by Brad Stone and Susanna Ray on January 24, 2013,


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Hiring Smart – Choosing culture AND intelligence

I am writing this piece today on a new laptop I purchased with both touch screen capability and Microsoft’s new Windows 8 operating system.  As I am typing and finger-swiping my screen, the story I want to share today has nothing to do with the technology, but the executive leadership responsible for it.

I have written before about the amazing transformation at Microsoft – and their struggles to overcome various ailments that accompany the maturation process in many organizations.

The NY Times reported recently on another interesting development in Redmond, Washington was the recent departure from Microsoft of software executive Steven Sinofsky.  He is heavily credited with leading the team that developed the firm’s bold new Windows 8 product and many saw him as the second most powerful person at the company after CEO Steven Ballmer.

His fall from grace is interesting (given the recent assessments of the unhealthy company culture that often pitted one department against another) and suggests to me the  Ballmer is seeking to rebuild the company into a more cohesive and collaborative entity.

No one I have read questions Sinofsky’s intelligence – the term “brilliant” is often connected with his name, but he is also consistently described as “abrasive,” “hypercompetitive,” and a “ruthless corporate schemer.”

One MSFT watcher, Ashlee Vance at Bloomberg Businessweek wrote:

“The big knock on Sinofsky was his often-prickly nature. He wasn’t seen as a team player within Microsoft and was instead known for protecting his fiefdom. That approach doesn’t go over well at today’s Microsoft, which needs to prove that Windows is just one piece of a larger collective that includes phone software, online services, and entertainment products delivered via the Xbox.” 

So this situation highlights a common dilemma among managers everywhere who are trying to balance intelligence and job skills, with culture fit among the people they hire and promote. We all want bright technically competent people.  I know many executives who value most highly someone who can get results and get them quickly.  Many of them are willing to overlook certain foibles so long as we succeed and win in the market place.  One told me recently, “Yes, some people can be a pain in the ___, but after the dust settles and our profits are up, people will calm down when they see their next bonus check or track their portfolio containing company stock.”

Isn’t that logic hard to fault?   Doesn’t success speak for itself?

Yet every one of us knows there is a cost associated with having people on board who do not share the values central to the company culture – and one person can wreak considerable havoc on their team and the company when they are so out of step (as perhaps Mr. Sinofsky was).

Why must it be either or?

What I want to ask is why so many of us have a bias that they are being asked to choose one OR the other (business skill vs culture fit)?  Why don’t we think it possible to have BOTH?   Maybe we just need to interview a few more candidates?

I think it is more likely that most interviews do not even focus on issues of character, values or culture fit.   We are too often so focused on solving the near-term challenge, that we focus on who we think can drive the greatest business success the fastest.   (I know I have made that mistake more than once in my career.)

So, let’s look at this problem as a marathon, not a 60m sprint.   Once you hire someone it is both hard and painful to get rid of them.  Your HR and legal people will want you to build documentation and demonstrate an effort to correct shortcomings.  Most managers I speak with say “the amount of energy needed to fulfill these requirements is just greater than I have time for.”  So, we all learn to accept the undesirable, look the other way, or (if we are lucky – to “promote” the problem employee to another job or department.)

Also, the longer we delay taking corrective action, the more legal risk you must accept when you finally conclude that “enough is enough.”

Learn from others

There are many companies like Southwest Airlines, Nordstrom’s, Zappos, and Google and Grand Circle Travel – to name a few – who see that compromising skills for culture is not a winning strategy.

The one you probably never heard of from this list is Grand Circle Travel; a $600 million travel services company who’s CEO reached this important conclusion:

I’ve found that in my business, alignment with my company’s culture and values counts far more than do skills or experience. In most cases, if an associate shares our values, we can teach the job skills.”

Their solution – was to create a values-based hiring system – elements of which make a lot of sense.   Here is their advice:

1.      Don’t just ASK candidates to describe their values, make them SHOW you.

At Grand Circle, they do group interviews (bringing in several candidates together who are interviewing for the same position).  Then, they put the group of candidates into role play or simulation exercises where the interviewers can actually OBSERVE evidence of what values they project.  When candidates are off balance, and not sure what you are looking for, they will more likely be themselves and their inner-self will shine through.

2.     Be Crystal Clear about your core values.

Find some clear way to communicate your values system to prospective employees.  Quicken Loans does an impressive 5 min company overview video that I sometimes show in leadership classes I teach.   The videos show their sort of unusual, hip, informal and quirky culture through employee interviews and some behind the scenes clips.  What is interesting is that whenever I have shown it, the class is divided on the company.  To some, they would LOVE to work for this place, while others just roll their eyes and conclude “way too much chaos, this is not for me.”

Isn’t that the point?   To be so clear about who you are and what you stand for that people can decide for themselves UP FRONT whether they would be a good fit?  Wouldn’t it be a lot better to figure this out before you make a job offer?

3.     Interview for job skills and values SEPARATELY.  These are two completely different problems.   BOTH are important, and zeroing in on each one separately helps you ask better questions and go deeper.   Interviews should be designed to learn specific things about a candidate – designing questions to assess one aspect of a person will short change you on the other dimension.   Here is an example from Grand Circle CEO, Alan Lewis:

“One of our organization’s young superstars came to his group interview with virtually no relevant job experience — which would have held him back had we been focusing on skills — but he demonstrated such ambition and leadership that we jumped to hire him.”

Hiring Smart.  So go for it – Skills, Smarts, AND Culture Fit.  It is possible to have it all . . . you just have to look a little harder.

BTW – here is an example of the Quicken Loans culture in actions – the employee egg-drop machine building completion.   Not for everyone.

Other Resources:

8 Lessons from Microsoft’s Malaise, by Len Brzozowski

Ex-Windows Chief Seen as Smart but Abrasive, By Nick Wingfield, The New York Times

Bits Blog: Why Sinofsky Left: A Web Roundup, by the New York Times

How My Company Hires for Culture First, Skills Second, by Alan Lewis, Harvard Business Review Blog

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Hiring Great People – the Googley Way

Most businesses I know have some very talented people who know about the technology, products, operations and services of their businesses.  They are pretty good executing the daily tasks, and know a lot about their industry.

Attracting and keeping top talent is pretty important (and I have shared many posts on this topic in the past).   In fact, it is THE MOST important determinant of corporate success and the only thing that gives you a chance at developing a sustainable competitive advantage which – by the way – is the main goal of any corporate strategy.

If you think about it, every company has access to the same technologies, capital equipment, software products, and business services as does every other company on the planet.   If so, then these cannot be a source of differentiation.   The key is what you do with all these things that make the difference.   How do you apply them, organize them, use them to make better decisions, etc.  It comes down to the creativity, initiative and determination of your workforce that define if you will win or lose in your chosen competitive space.

So, Hiring Great People is not only important (which all of us accepts as true), but is THE SINGLE MOST IMPORTANT THING YOU DO (and few organizations consistently ACT as if this were true).  One of them, in my view at least is the search engine giant, Google.  Laszlo Bock (chief people officer), in the recorded piece he did for the Wall Street Journal offers a simple and effective summary of how he thinks his company makes hiring a successful strategic activity.

What strikes me is that none of the ideas he describes are revolutionary in themselves (elements have been done by other companies since I was in business school – more than a few years ago.)  What’s different here is the way they put these elements together and the consistency with which they are followed.

What does Google look for in a new hire?

According to Bock, four things:

1)      General Cognitive Ability.  Can you solve problems, and are you reasonably smart?   The company developed its own screening test, the infamous GLAT (for Google Labs Aptitude Test and you can take the test yourself by clicking on the link).   Some people would hate this experience, but there is a certain category of people who actually view these kinds of questions as FUN.  I’m not one of them.  Here is an example:

“Solve this cryptic equation realizing, of course, that the values for M and E could be interchanged.  No string of leading zeros is permitted.


The Answer: (from the book, The Google Story) It’s simply a matter of finding the correct digits to substitute for the letters.  This can be done by trial and error, but a more Googley way would be to write a simple computer program.   (‘Sounds easy enough, right?)  Sooner or later you might end up with the correct answer:

           777589                                      WWWDOT

–          188103                                        GOOGLE

=         589486                                      DOTCOM

And if you made the M=3, and the E=6, the answer would be 58948.   Whew! How long did that take you?

2)      Emergent Leadership.  This doesn’t relate to the traditional definition – how many people can you manage?   It has to do with your willingness to step up and proactively face problems and challenges.  They want people who can engage others and help focus energy to solve any problem.  And then, when the problem is solved, you are willing to slip back into the background.  To Bock, leadership and followership are flip sides of the same coin.

3)      Culture Fit.   You need to be happy at Google, and it is surely not for everyone (in case the GLAT question didn’t already make that point).   At Google, they are looking for people who are comfortable with a large amount of ambiguity (since the company work environment is somewhat unstructured and moves at a pretty fast pace – as does the technology around which their business operates.)  You need also to be self-driven, passionate about your life and Google’s values, and excited about collaborative achievement.

4)      Role Related Expertise.   Bock says this is “the last and least important” of their criteria.   This relates to whether or not you actually know something about the specific job you are being hired to do.

It is interesting that the company places lowest emphasis on the last point.  My observation is that in many companies, the opposite is true.   In most interviews I am familiar with the conversation tends to focus more on your academic background, demonstrated job skills, where you worked and what you did.   It seems we are too often willing to sacrifice leadership, values, and culture fit for job experience.   Hmmmm . . .

If you have 5 minutes I would urge you to view the entire clip below to hear Mr. Bock describe many other aspects of Google’s HR and people philosophy.

Watch Laszlo Bock describe How Google Decides on Hires

Other Resources:

Targeting soft skills yields hard returns for employers, how Zappo’s culture and hiring practices make a difference, by Lisa V. Gillespie, Employee Benefit News

Move Over Zappos and Google – The New Role Model for an Org That Really Gets Culture Is…, by Jessica Lee, Fistful of Talent

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Enabling the Disabled: Learning to Look for Abilities

Most of us remember the publicity surrounding the London Paralympic Games (which immediately followed the closing ceremonies for the more familiar version).  You might also remember the achievement of Oscar Pistorius  the so-called “blade runner” from South Africa who became the first double amputee to run in a track and field event in the 2012 Olympics.  Enabling the Disabled seems like an idea whose time has come.

And, with many disabled veterans returning from Afghanistan and Iraq, it seems fitting that people with disabilities should be more in the main stream of our consciousness.

Well at one well-known drug store chain, they are making the disabled an important part of their main stream, and the story is worth celebrating.

Walgreens some time ago opened two new concept distribution centers in South Carolina and Connecticut.  As perhaps an experiment, they deliberately set out to fill a third of their open positions with people who were disabled.  (I can imagine some of you are becoming uncomfortable with the thought of this idea—but I urge you to read on.)  Today, one of the centers has 40 percent of its employees who would record a disability on their HR file, and in the other, 50 percent are disabled.

One example is their current head of Human Resources who has cerebral palsy.   Now she earned straight As in college and graduate school, sent out over 300 resumes, and went through 30 interviews, but couldn’t land a single job . . . that is until she applied at Walgreen’s.  According to Randy Lewis (Walgreen ‘s VP of Supply Chain and Logistics – who manages these distribution centers) she is “one of our best HR people.”

Tom Pelletier has epilepsy and could not hold a job reliably – and was often let go because of his seizures.  He now works in the receiving department at Walgreen’s and still has about one seizure per day – but he wears a safety helmet and elbow pads and manages just fine.

Another autistic employee (who was thought to be unemployable)found his very first job at Walgreen’s and  is now described by Mr. Lewis in this way: “In every job that we’ve given him, he performs at a 150 percent standard.”

Paul Mazzoli (another employee in their Connecticut warehouse) has Asperger’s syndrome and was recently removed from a grocery store job as a bagger, since he would frequently speak inappropriately to other workers or customers.   At Walgreen’s, his average picking rate of 93 orders per hour puts him in the category of top performers.

Sure. Good for Walgreen’s – some of the cynical out there might see this as more about publicity and good public relations.   Well Walgreen’s is a business with demanding shareholders (like any other business) and Mr. Lewis can attest to the fact that these distribution centers are the lowest cost, most productive operations the company has ever before experienced.  In fact, in January of 2013, the company plans to launch similar diversity employment initiatives in 8,000 stores across the country.

See for yourself in this clip below.

Perhaps this would never have happened if Randy Lewis did not have a son with autism, where he had to learn to look past his “disability” to see a person.   Once Lewis did that, it seems that many other things became possible

I suppose in some ways we so-called “able-bodied” people are the largest impediment to this kind of innovation.  We are the ones who sometimes stare, or possibly avert our eyes, never make eye contact and certainly not strike up a conversation with someone who was obviously disabled.  We don’t feel comfortable hiring them, and aren’t so comfortable working side by side with them.

I read one article by a psychologist suggesting that we are uncomfortable with the prospect of considering our own vulnerabilities.  Another article I read by a disabled person who wrote about what it was like to talk about his disability with coworkers.   It seemed pretty disconcerting to him just how much his coworkers didn’t want to deal with the conversation.

You have to acknowledge that disability makes their abilities different, and many people have to struggle over the idea of whether that changes their value as people.”  (See Disability Makes People Uncomfortable”).

Whatever the cause of our discomfort – familiarity seems important.   One study had a room with several disabled people in it, and the researchers wanted to see if they could influence how close to them able-bodied people would sit.  One group came in and sat down directly.  A second group was permitted some time to “stare” (sounds a little creepy) at the disabled subjects through one-way glass for a time.   This second group sat substantially closer and was much more likely to strike up a conversation.

We know from best practice research that having eclectic and diverse teams has a lot to do with increasing the level of innovation within organizations.  It seems logical that we should strive to make our work forces more diverse.   While many companies have made progress in diversifying their ranks based on gender, promoting diversity along other dimensions is not yet a challenge we can say America has solved.

Fighting prejudices and stereotypes is needed.  And how wonderful it is that people like Randy Lewis felt a compelling need to try and make a difference.   It is equally noteworthy that Walgreen’s executives sanctioned it.   Now that this effort seems to have transcended from a bold experiment to simply a powerful idea, it will make it that much easier for other organizations to take their next steps.

Gratefully, Walgreen’s is not alone enabling the disabled.   Companies like Boeing, Verizon, IBM, Hewlett-Packard, and Glaxo-Smith Kline are also doing innovative things in this area.   Let us know what your company is doing.

Other Resources

Ready & Able: Initiatives for Hiring People With Disabilities, by Sharon Kahn

Workforce Diversity — Walgreens and the Obvious Solution, by Kasia Moreno

Fostering Innovation Through a Diverse Workforce, Forbes Insights


Filed under Innovation, Leading

Putting On the Ritz: Building a Service Culture

Have you ever gone away from home on a business trip and left something important behind?  Imagine leaving your smart phone, or wallet, or last pair of eyeglasses.   To me, these would be more than a minor inconvenience – they would be a BIG deal.   Losing these would turn my world upside down (at least for a time).

To a five-year old leaving behind their ELMO doll while on vacation, this can be just as traumatic an experience.  In this case the girl, Ainsley Giorgio was on vacation with her family at the Amelia Island Ritz-Carlton hotel.

As reported in the Huffington Post, Ritz employee Nelson Quesada, found the doll after Ainsley and her family departed, and decided not just to return it, but to do so in the fabled Ritz Style.   Nelson decided to create a scrapbook showing various pictures documenting all the fun Elmo was having on his adventure since Ainsley left him behind.  In it, Elmo was pictured lounging by the pool, working out in the fitness center, waving to Ainsley (see photo), playing video games, and kicking back with a group of his other stuffed animal friends.

What an impact that must have had on this five-year old, as well as her parents!  When you get a WOW customer service experience right, you create an impression that could literally last a lifetime!    In addition to making a little girl feel elated, this makes good business sense, especially given the power of word-of-mouth sharing.  It also creates in the good deed doer a rush of biochemical reactions that scientists believe can reduce stress, improve one’s sense of well-being, and even improve your health and longevity!   (See the WebMD article below.)  Talk about the ultimate win-win.

What’s even more noteworthy to me is how little that action by Mr. Quesada cost his company (Perhaps 45 minutes of time, a few pages off the printer, and some postage).  In total less than $50.  If the telling of this story gets even one additional person to stay at the Ritz for just one night, they would have generated an additional $600-800 in revenue (after room, dinner breakfast and other likely charges).  Seems like a no-brainer doesn’t it?  Makes you wonder why more organizations don’t act in a Ritz-like way – especially the ones where a great customer experience is a strategic imperative.

Not Left to Chance.

At Ritz-Carlton, this service culture is not something left to chance. It is the by-product of their hiring, on boarding, culture-training, employee empowerment, and management behaviors.

Here are some of the ways the Ritz increases the likelihood that WOW service experiences are more common than in most other companies.

1)      You need to define what you stand for.   Delivering great customer service only can happen if people UNDERSTAND what it looks like.  You need to define it.   R-C has done this in a variety of ways in the Mission, their Credo, their Motto, a set of Service Values, and something called the Employee Promise.  These collectively explain what they are about, and what principles should dictate employee behaviors from the CEO down to the bellman.   (Some companies try instead to document desired actions in voluminous sets of policies and procedures.  That never works.  There are just too many unpredictable circumstances that present themselves.  What we want is employees who can instinctively act based on their understanding of core values.)

2)     Hire based on core talent, not job skills.   Many companies write job descriptions that detail the work skills needed for each position (e.g. knowledge of a particular software system).   What really matters is core behaviors or inclinations. These are not trainable, but job skills are.  At R-C, they have a list of 11 basic talents (like exactness, or relationship/engagement).  Each position in the company requires differing levels of each.  Someone in the accounting department may need lots of exactness (attention to detail) while a concierge needs more relationship/engagement skill.   Remember this maxim – Hire for talents, and then train for skills.

3)     Teach deliberately.   If certain behaviors matter to you, don’t leave them to chance.  Train your team around them.   R-C puts every new employee through a 21-day intense training program where they are taught the values and beliefs, their customer service model, how to manage a difficult guest and other items they have learned from experience will likely be encountered by employees in their jobs.

4)  Trust in your people.  Every R-C employee knows they have at their discretion $2,000 they can spend every day not just to satisfy but to WOW their guests.   If your first reaction to this is “how could they? Won’t people spend the money foolishly?” you don’t really get this.  Employees who are hired carefully, and trained well recognize it is THEIR company too, and they will spend money wisely and only when necessary (as physicians learned long ago about self-dosing of morphine by patients who typically use less when they are in control of the button).

5)    Measure it.  If you don’t measure where you stand, you can’t possibly know if you are getting better or worse.   (Did you ever play golf with someone who didn’t keep score?  If they didn’t it is because they either were ashamed of their game or didn’t care – and neither one of those is a good thing.)    R-C does random guest satisfaction surveys every month to track progress and stimulate discussions on what they could do better.

6)    Recognize it.   If you get the same rewards and recognition for delivering mediocre service as you do for providing WOW service, guess what’s likely to happen? The service quality will diminish.   We as bosses must be paying attention – trying to catch them in the act of doing it right.    When we see it, it is our golden opportunity to act.  Rewards need not be about cash.  Often a thank you or a “thumbs up” can accomplish the important goal of letting your people know their good work is noticed, and that they are appreciated.  Make it personal.

7)    Live it.  If it all stops at the end of employee orientation, then energy around what you claimed you believed in will wane.   Here is a video clip talking about something that R-C calls their line-up.  A daily meeting in every hotel across the planet where one of their 16 key culture elements is discussed for 15 minutes.  The meeting is mandatory.   At it, people share a WOW story of their own, or maybe brings up a situation they faced where they weren’t sure how to best handle it.  Everyone attends.    It is a chance to reinforce what matters.  Remember that WE (as bosses) are the CAP on service quality.   Our staff’s will not typically deliver better than they see from us.  When WE think it is important, they too will follow suit.

Other Resources:

The Science of Good Deeds: The ‘helper’s high’ could help you live a longer, healthier life, by WebMD

Lost Elmo Doll Goes on ‘Vacation’ at the Ritz Carlton, by the Huffington Post

Service the Ritz-Carlton Way, by Club Resources International

Put More WOW in Your Service, Brandt Silverman, Wiplfi Ltd

How Ritz-Carlton Maintains its Mystique, by Carmine Gallo , Bloomberg Business



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Destroying Paradigms to Unlock Breakthrough Thinking

 “Innovation: A difference that makes a difference:  imagining, realizing and spreading a new way of understanding, seeing or making things.” — Dr. Carol Strohecker

What is the biggest impediment to achieving breakthrough thinking and innovation?   I believe it is our own mental roadblocks erected around the things we already “know.”   Most of us know a lot about our business–the industry, customer behaviors, competitor strengths and weaknesses, stakeholder values and so forth.  Most of us think of ourselves as “experts” in fact.

The problem is that our knowledge (and associated ways of thinking about things) comes from our accumulated life experiences.   By definition, these are backward looking.   And while our biases and beliefs may have been formed thoughtfully, they don’t always hold in highly dynamic world.  (If the future is different enough from the past, then historical ideas and solutions may not be useful.)

  • There was a time when I would have “believed” that $0.75 was a lot to pay for a cup of coffee.  For quite some time, that was a valid conclusion . . . that is until Howard Schultz took a vacation in Italy and saw how a coffeehouse could be a social experience, and took the opportunity to purchase Starbucks in 1987 from its original high-end coffee purveyors.
  • There  was a time when many of us believed that a restaurant was a place where you sat down and people served you.  That is until Ray Kroc walked into the “McDonald’s Famous Barbecue” place in San Bernardino California and saw a fast-food revolution.
  • There was a time when we believed that our world would revolve around laptop computing, before IBM combined telephony and computing in their first PDA device introduced at the 1992 COMDEX show.  (This ultimately became the “Simon Personal Communicator” marketed by Bell South in 1994 – see photo.)

Howard Schultz initially had great difficulty attracting investors to fund his growth plans.  After all, most people KNEW that the business model would not work – based on their beliefs about how people felt about buying coffee.  (Would you have invested your money on such a bold new concept . . . $2 for a cup of coffee, even more if it had foam on it?)

Yes sir. Once we form opinions about things, they are hard to break for most of us. Our tendency to cling to our deeply held views about the world often blocks us from the kind of breakthrough thinking we would like to see more of in our organizations.

Some people do this naturally

For a small fraction of us, this is not so much of an issue.  I’m not sure if Steve Jobs is a case in point, but I believe that some of us are born with a sense of deep restlessness and continual questioning of things.  Have you ever had the experience of getting lost in a continual loop of conversation with a precocious five-year old that couldn’t stop asking WHY? These are the kids who always got in trouble at school, were a teacher’s worst nightmare, who were always balancing between being inquisitive and a “smart aleck.”  (Perhaps many of us were born this way, but had it driven out of us as we progressed through our early school years.)

In any case, most of us as adults do not have this natural tendency to be able to see things as if for the first time – free from our preconceived notions.

Breaking the Paradigms

Most of us need help to break these paradigms.  Here are four ideas to help you break out of established (and limiting) patterns of thought.

1)      Educate your team about the power of paradigms.   Give your team an intellectual understanding of what paradigms are, how our minds form belief systems, how these are both useful to us, and also what the downsides are.   This step on its own will not change anything, but it is one step in modifying behavior – modifying someone’s understanding and knowledge.

2)     Put them in an environment where questioning is the norm.   We all adapt our behaviors into our environment.  We understand the culture around us, and act accordingly.   If in your organizational culture, questioning of assumptions and the status quo is not a normal behavior, then people will not naturally go there.   For this reason bringing people into a new physical space with a skilled facilitator can help.   In an external environment, a temporary set of behavior norms can be established (as in a workshop or seminar).  People are generally willing to adapt to any established rules set by the facilitator (because they are not being asked to make a permanent change).

3)     Use immersion learning to create a new context.  Getting your team members into a new environment can help them to see things through a different lens. Examples of this would be to have them interview customers, stakeholders, do a field trip, or conduct customer observations.  With a little coaching and some help (like providing a structured interview guide along with some coaching on empathetic listening), your people will likely gain new insights about all sorts of things when they can make someone else the focus of attention.

4)     Challenge them with powerful questions.   One way to stimulate creative ideation is to ask unexpected questions that beg a new pattern of thinking.    Here is an example of what I mean, taken from a health care client learning event recently conducted by Xavier Leadership Center. In this case we were trying to get the audience to consider different strategic ideas related to their industry and health system.   Here are some of these powerful questions:

What are the rules and assumptions my industry operates under? What if the opposite were true?

  • What will my patient pool look like five years from now?  Ten years?  How will they be different from today? What will that mean for care we will need to provide?  How will we need to prepare for these differences?
  • What if our goal was to cut hospital admissions and procedures by 50 percent, what would we do differently?  (This is interesting because today’s hospital reimbursements are based on the NUMBER of procedures performed).
  • What if hospitals didn’t exist, what would we invent from scratch to serve health and wellness needs of our society?
  • If we could allocate 50 percent of what we do on prevention and wellness?  What would we do as a health system?   What would we want the outcome to be?

Such questions can be hugely powerful if they were not ones your team had previously thought about.   Being caught “off guard” can be intellectually stimulating.

What powerful questions can you think of relevant to your business?  Use them during your next strategy planning session.

Other Resources

My Challenging Life: Starbucks CEO Howard Schultz

Center for Design Innovation – Interview with Dr. Carol Strohecker, by Deanna Leonard, Innovation Excellence

The Believing Brain, by Michael Shermer

What is it like to see something “as if” for the first time?, Namukasa, Immaculate Kizito, Phenomenology Online

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Innovating A Mature Product – The Sealy Case

We sleep on one every night.  But unless you suffer from chronic back problems, how many of us give this product (our mattress) a second thought?   Eighty percent are made from some coils, foam topper and some fabric.  Each manufacturer calls their version something different, and we can buy them with more or fewer coils, fluffier foam or softer fabric to suit our preferences.   Does it really matter which brand you buy?  Not to me.  I presume that Sealy, Simmons, Serta (not sure why they all begin with “S”) are all comparable, and I buy what’s on sale that feels comfortable for the 2 minutes I lie on it in the store. What’s the big deal?

Well, when you are in the mattress business, and the sales of your premium brand starts to plummet with new energetic competitors entering the luxury mattress segment around 2002  (made even worse after the economic melt-down of 2008) it is a very big deal.  That is what was happening to the Stearns and Foster brand of the Sealy Corporation.

Can you imagine a meeting at the corporate office where the Brand Manager stands up and says “Sales are in the toilet.  We think it is related to the economy.  Our plan is to RAISE prices by 40%!”   Can you imagine any sales leader in their right mind who would make that case?  Well, that is what they did.

To the credit of Sealy management, they decided to try a new approach, applying a creative problem-solving methodology called Design Thinking.   They partnered with the Boston office of design powerhouse IDEO (the people who became famous for inventing the first computer mouse for Apple).

Like many companies that have been around a while, their R&D/Product development department was a stand-alone group that operated in their own sort of ivory tower, bouncing bowling balls on mattresses, and such.  But the design thinking process approach they used with their Stearns and Foster problem called for a new way of working.

So, with IDEO’s help, their engineers from the Trinity, North Carolina headquarters were sent out with sales and marketing people to visit retailers in New York, Atlanta and Chicago.  They spoke to customers (yup, that’s a novel idea), interviewed retail sales clerks and they studied their competitors’ products not through the eyes of the technicians in the R&D facility, but through the eyes of the sales people who were talking to live buying customers on a daily basis.

When they watched customers on showrooms, they observed some who walked up running their hands along the mattress top, remarking about how smooth it was, or noticing the decorative patterns on the fabric.   (In some ways this seems counter intuitive when you consider that none of those attributes are ever appreciated by consumers when the product is in use.  After all, it is covered with blankets and sheets.) Yet, these things seemed to matter, no matter how irrational they may be.

The redesign team learned that unlike yours truly, many customers take their mattresses quite seriously and see them as reflections of themselves.   Mattresses needed to have a kind of personality, right down to the embossed fleur-de-lis pattern on the mattress cover that hearkened back to the early days when Stearns made seats for high-end carriages in the mid 1800s.

Armed with these new consumer insights, marketing and engineering managers from Sealy sequestered themselves in IDEO’s Boston offices for eight weeks to re-think their product design.

It was natural for Sealy – as they saw sales decline dramatically after the stock market crash and following economic downturn–to focus on cost cutting.  However, the process they followed kept the team away from the corporate bureaucracy and allowed team members to influence design not based so much on costs, but on what they were learning from customers and field sales people.   While other mattress manufacturers were cutting costs, Sealy’s creative problem solving team went the other way, adding material and labor cost, resulting in their raising prices a whopping 40 percent (from $1,000 to $1,400 per mattress)!

The results?  Since the newly designed products were launched at the end of last year, they broke all previous sales records for the product line.

Why did it work out so well? Here are some observations:

Immersion research is vital.   The final design version was pretty interesting when you consider how much effort went into improving the physical appearance of the product in the showroom. (These are insights not attainable any other way than by direct observations in the field.  You can buy your competitors products and reverse engineer them all day, and never understand how consumers FEEL when they are buying them.)  One of our biggest enemies is what we all think we already know.   We all believe we are good at our jobs (experts in fact).  We form opinions about lots of things over time, our customers, our own organization, competitor behaviors and so forth. Once we form our opinions though, we tend to hang on to them tenaciously – a dangerous thing in a constantly changing world.   So any creative process is aided by field immersion learning. Get out of your cube, your office, your building and even your industry to look at things through different lenses. I have never seen one such experience yet where observers didn’t learn important new things.

This cross-functional approach was crucial.  Getting sales, marketing, product development and R&D together to solve a problem seems so logical, but is yet too often avoided.  We never have time.  It will cost too much. It will slow us down. (Pick your favorite excuse.) Forming eclectic teams of diverse people is highly productive.  You want to surround yourself with people who don’t normally think like you do.  You then want to teach your teams to build on each other’s ideas rather than criticizing them.

As reported in the Fortune article referenced below, Allen Platek,  Sealy’s VP for new product development, reacted this way to the new way of working together to solve problems:  “[It] was one of the most fun times of my career.  Prior to this, what we did was in silos. Sales did their thing, marketing did their promotions and ads, R&D developed innovation, and then it was all thrown to operations. We had a disjointed effort.”

Get people away from the bureaucracy.   The truth is that when we are in our familiar work surroundings, we adopt many of the paradigms, biases and bureaucratic practices that normally accompany that environment.   This design work at Sealy was not done in North Carolina, but in Boston at IDEO.   There, they weren’t having people second guess them each day, posturing or trying to exert influence on the process for any reason.  They didn’t have to follow normal procedures, get approvals and so forth.  The result was speed and freer thinking. Outside facilitation can help here as well.

Senior leaders were willing to let go.  This whole process can be destroyed if senior leaders are too afraid, and decide to second guess or overrule their creative problem solving team.  Sealy executives were willing to let go and see this experiment all the way through.  They trusted their people to use their best judgment and to trust in the process as well.  An initial success encourages more experimentation and you can really build momentum.

I have been sharing in prior posts examples from public education, federal and municipal government, and now here in the for-profit sector.  We are in the throes of a similar bold experiment like this at Xavier as well, as we are guiding over 100 people in various cross-functional teams through this same creative problem solving process experience used by Sealy.  Xavier has assembled a team of globally experienced “innovation guides” and we are using Innovation as a transformative process for our entire organization.  For us it is too soon to demonstrate the success of our outcomes, but I can see that some exciting new ideas are already starting to emerge, and the we have not before seen such cross campus energy as we are working together across our own internal silos.

At Xavier we teach and guide external client teams through both Creative Problem Solving and Design Thinking projects.    So pick whichever case example I have written about as a starting point: NY Public Schools, the VA in Washington (and with the 100,000 Homes Campaign), St. Vincent’s Medical Center (Birmingham AL), Dartmouth Hitchcock Medical Center (Hanover NH), Google, or IDEO.   They all have some common threads.  Start with them, and see if you can add your own new improvements.

Finally, if you haven’t seen this before and want to see Design Thinking in practice, here is an 8-minute video showing how IDEO designed new shopping cart in five days.

Other Resources

Reinvigorating the Stearns and Foster Brand for Sealy, from IDEO

Next Generation Posturepedic for Sealy, from IDEO

Sealy goes to the Mattresses, by Daniel Roberts, Fortune/CNN

5 Innovation Secrets from Sealy, by John Kotter

IDEO helps Sealy revive its mattress sales via design, by Reena Jana, Smart Planet


Filed under Innovation, Leading