Being Best in Class, not just OK in Class
“If OK is the outcome of what you’re doing, scrap what you’re doing.” Voxpop, Rackspace.
Imagine that 24 senior leaders, your peers, were coming to where you work to understand what you do and how you do it. What would you tell them? How would you bring the essence of your organisation to life? What would you share (and not share!) to ensure they left feeling inspired to improve?
This is the daunting challenge we give a dozen organisations each year, so that Connect members can peek behind the curtains of places we believe are something special. Not perfect but special in how they behave with each other or with their customers or in the world and in some cases across all three. Not perfect but perhaps striving to be and certainly never content with OK.
Each year we hear new stories and take away new learning. We are also reminded of important things we’ve heard before. Below is what we found interesting this year, structured around the framework of insights and observations we call the Wavelength 10.
1: Clear and compelling purpose
If a Connect member got this far into the program without clocking that we think organisational purpose matters, we’d be amazed.
Not just any old purpose though.
Tesla wants to ‘seriously accelerate the advent of sustainable transport’. The John Lewis Partnership strives for ‘the happiness of all its members, through their worthwhile and satisfying employment in a successful business’; LEGOwants to help children release their potential by developing their creative thinking and reasoning, and sees its role as ‘reinventing the future of play’. What these have in common is that they help liberate organisations from thinking like others in their sector, they change the game giving them permission to do different.
While a purpose helps propel an organisation forward, it is typically rooted in how or why that organisation started, or in some cases even further back.
A decade ago when Jude Kelly became Artistic Director at the Southbank Centre the organisation was directionless, the building considered a carbuncle and it was not clear where to look for inspiration for change. In creating the Southbank scrolls – where Jude wrote and drew a vision for the organisation that is still referred to today – she looked forward but she also looked back. Back to the summer of 1951 to the purpose of the Festival of Britain, which took place on the Southbank. She took its aims of being ‘egalitarian, excellent and the people’s place’ and wove them into a vision that means that today the Southbank Centre is the largest single-run arts centre in the world.
Organisations can, and in our opinion should, aspire to improve the world we live in and many of the organisations we visited saw no tension between doing business and doing something more for society or the planet. As we’ll see…
2: Authentic personal action
Of course there are successful leaders in highly profitable organisations that don’t walk the talk when it comes to what’s written in their mission, vision, values. For us they are not best in class as there is more to business success than the money (although the money is of course important).
A visit to Timpson is a revelation for most Connect leaders. The unassuming high street retailer best known for shoe repairs, dry cleaning and key cutting has an ‘upside-down management system’ which places senior management firmly at the bottom making the job of the leaders to serve its employees. When John Timpson spoke to members this year he had visited 100 stores in the last month. We have met John and his son James, Timpson’s MD, many times and their focus on supporting the frontline is unequivocal. This extends beyond the store into homes as experience has taught the Timpson family that problems at work seldom start at work. Area managers have to know the names of their staff, their families and what’s going on for them in order to ensure ‘great service by great people’.
Embedded in the Four Seasons’ culture is a belief in treating others, as you would wish to be treated yourself. This is evident in how the staff respond to the daily pressure points running a high end hotel entail, pressure points like dealing with short turn around times between events, large numbers of guests arriving simultaneously, an emergency. Everyone mucks in, in irrespective of position or pay, to ensure the customer experience remains five star and to support their colleagues.
So what of Pannos Mytaros, Executive Vice President of the ECCO Production Group?! While his references to having balls and showing them (and we don’t mean of the sporting variety) may not be to everyone’s taste, it’s clear that his insistence on rebellion (to encourage innovation), being the 2% (not the 98%) and not getting too hung up on normality and what’s possible today are not just words, these are things he lives by. They also help explain why ECCO Leather is now a stellar example of bold business model innovation, as we’ll see later.
Our Best in Class organisations typically have a strong point of view on, and processes for, recruiting and ‘on-boarding’ new recruits, keeping the right people and letting go of those that don’t fit.
Recruiting & on-boarding new recruits:
“A culture is nothing else than the behaviours you accept and reject”. IKEA.
We were reminded of the value of behaviour-based interviewing, where what people say they did or would do is used to unearth motives, beliefs and personality. At IKEA this is in the obsessive pursuit of people who are other-oriented not driven by a need for status within a classic company hierarchy. At the Four Seasons they look for people who can make decisions that are right for hotel guests and the business without endlessly deferring to management. At ECCO Leather the focus is on an ability to handle ambiguity.
At the Southbank Centre what’s expected of employees could not be made more explicit. In a fittingly creative yet highly practical origami-style pamphlet, the Southbank Way sets out seven core ideas and for each what ‘The Great Way’, ‘The Good Way’, and ‘Not the Way’ behaviours look like, making explicit what’s expected of employees.
The Southbank Centre and Timpson both have systems in place to recruit from marginalised groups, as both believe putting extra effort to bring these people into the workplace is good for them and for society. Over 10% of Timpson employees are ex-offenders and through the Timpson Family Foundation it trains and recruits for its stores inside prisons (not key cutting in case you’re wondering!). It now helps others business who recognise the latent talent sitting in Britain’s prisons to do the same, including Greggs and Halfords.
For Timpson ‘On-boarding’ new recruits coming out of prison can involve meeting them at the prison gates when there is no one else who will and helping them sort out the basic infrastructure that keeps us all afloat. For the Four Seasons on-boarding new recruits means they get to stay in a hotel with their family and understand what the customer experience needs to feel like, from the other side.
Keeping the right people:
Most of the organisations we visited are good at fostering a sense of belonging for employees, and helping them feel valued. Few of them offer industry-busting incentives as a means of keeping people.
We were told at cloud storage company Rackspace that people are recruited because they are already ‘Rackers’. This perhaps explains why one employee told us how joining Rackspace “felt like coming home” and why 33% of new hires are referrals (referrals are rewarded). Creating this strong almost familial bond has to go beyond finding the right people to keeping them happy and sane once they’re there. At one end of the spectrum Rackspace has a fun budget and a physical environment deliberately designed to give customer support staff ways to let off steam and unwind (e.g. quiet zones, table football and air hockey, etc.). At the other end, a recent wellness month included Tea & Talk meetings focused on mental health.
Learning and development is another strong theme.
The Apple University was founded by Steve Jobs to inculcate employees into Apple’s business culture and educate them about its history, particularly as the company grew and the tech business changed. At Apple we heard how the University puts emphasis on recruits understanding how decisions have been made in the past, the ethos underpinning them, so they are able to make good judgements in the future.
At LEGO the focus on development never stops. If you one of LEGO’s top 20 leaders globally and you’re due to present in front of your peers at the monthly 2-3 day meeting, you must pre-nominate two people to listen to you critically. Then immediately after you’ve presented you’ll get two minutes feedback from them, in front of the other 19 including the Board and CEO, before actions are discussed. This group also recently received training on how to put forward an opposing view, even if this means making one up you don’t believe in, to ensure no stone is left unturned in ensuring the business remains successful into the future.
Letting people go:
The Timpson approach to people is direct and leaves no room for doubt. During recruitment they look for Miss Friendly, Mr Happy and Mr Up For It not not Mr Dull, Miss Fib, Mr Lazy or Mr Scruffy, and their learning centre is called ‘9s & 10s’, in recognition of the scores recruits must get to land a job at Timpson in the first place! This stance extends to getting rid of people. If you break their explicit contract – look the part, make customers happy, put the money in the till – they will do whatever it takes (that’s legal) to ensure you to leave, including moving troublesome employees to jobs at the other end of the country.
The John Lewis Partnership is owned in trust for its members, who ‘share the responsibilities of ownership as well as its rewards profit, knowledge and power’.
They look for people who are curious, collaborative and who will act as a partner in a business should – like it’s theirs. This is not for everyone and means that hard choices must be made too, as Lynne Brutman, the GM at Four Seasons put it, “I will not sacrifice a team for one person”.
4: Align relentlessly, using structures not wish-lists
The organisations we visit seldom leave important things to chance preferring to structure-in what they want to get out. While this may sound totalitarian and stifling, done with vision, precision and imagination the results can be liberating. We’ve mentioned quite a few already but here are three more that impress us.
Scaling-up culture and keeping culture at scale are challenges many of the organisations we work with face. At the Four Seasons, General Managers are the culture carriers. So, when a new hotel opens, an experienced GM is sent to work alongside the new team to ensure that systems and processes are infused with the spirit of the organisation not merely an exercise in efficiency.
In Apple stores there is a daily download before customers arrive. This is an opportunity to discuss the day ahead, share wow stories and talk about ‘detractors’ – in-store encounters rated below eight on Apple’s customer Net Promoter Score survey. If a customer rates an encounter below eight the store manager calls them and learning is shared at the daily download. This is not, however, about naming and shaming store staff given Apple’s strong focus on team, rather it is a powerful structure for continual improvement.
Apple has a habit of saying ‘no’ more than ‘yes’ to possible business opportunities. The structure behind this is simple and links to Apple’s goal, ‘to create the best products in the world that deeply enrich people’s lives’. They only want to create products that are ‘irresistible’ and that their customers have a deep emotional connection with. So when approached with a business opportunity these are some of the questions they ask:
1. Will it make a profound difference to a market? 2. Does it have potential to be a $1billion market?
If the answer to either of these is no it’s not for Apple.
5: Brilliant basics & magic touches
While it makes you feel great when every member of staff at a Four Seasons Hotel seems to know your name, this feeling won’t last long if the shower in your room doesn’t work properly, the food you want most from the menu isn’t available or you have to queue for ages to check out. The Four Seasons is a great example of how the ruthless pursuit of operational excellence combines with magic touches to consistently surprise and delight customers.
The examples below are mostly about the magic not because we think it’s more important or harder to do but because most of us know much of what is required to achieve operational excellence in our organisations, even if it doesn’t always happen right now.
Tesla wants raving fans not customers. They also know that the handover of a new car is often a stress point customers, particularly when switching to an electric vehicle. The answer? Delivery Experience Specialists dedicated to making the process brilliantly simple and enjoyable. Tesla also offers a factory tour to all new owners and provides a Ranger Service for repairs if you don’t live near a service centre.
Sticking with cars, Jaguar Land Rover owners receive an App on their smartphones just before their new car, which allows them, among other things, to start the car and warm it up from the comfort of home on a cold day. They have also designed sensors for their cars that transmit real time data on potholes to the road authorities proving that magic can have a social purpose too!
Taking magic to the nth degree, Apple designed the box of the iPhone 5 with a magnetic fastener that prolongs opening to heighten anticipation.
Finally a simple bit of magic we’ve heard many times and still love, Timpson customers are not charged for small repairs but asked instead to pop a donation in the charity box.
6: On first name terms with customers and their people
We’ve spoken quite a lot about employees but what of the customer? The following struck us as interesting examples of customer-centricity during Best In Class.
LEGO is a B2B organisation yet the number one KPI its senior leaders’ performance is measured on each month is consumer satisfaction; so whether a seven-year old girl playing with LEGO Friends in China is happy, or not. Next after this is the customer scorecard measuring how Lego is performing for retailers and distributors then LEGO’s reputation. Financials and sales come fourth and fifth.
As we learned from Georg Ell at On Your Marks, Tesla does not have showrooms rather it uses public spaces with high footfall, like malls, to showcase its cars. These are interactive affairs with everyone irrespective of age or means is encouraged to get a feel for the cars that are there and learn about them via the touchscreen displays. This egalitarian approach fits the scale of Tesla’s vision and a belief that everyone is a potential Tesla customer. While these events may look like pure selling opportunities they are also a chance to gather consumer intelligence and insight.
In its bigger stores Apple has community floors where it hosts events for local educational and community organisations, providing it with an opportunity to get up close and personal with consumers.
This year’s Best in Class ‘warts and all’ award for honesty goes to IKEA where we sat through five minutes of vox pops of customers moaning about IKEA. While for those in the room with recent IKEA experience it was not a surprise to hear consumers complain about out-of-town stores and no next-day delivery, such candour was startling. What we’ll be interested to see is how this fast growing globally successful business that’s always been different will respond to pressures to conform to retail norms.
7: Take a bold stance on innovation
Adrian, Chief Connector and Wavelength co-founder, came back from ECCO Leather telling us it was ‘gold standard’ in bold innovation. When Ade says this we tend to listen as he has been snooping about in Best in Class organisations around the world for most of his working life.
When Pannos was put in charge of ECCO Leather, it was tiny cost neutral tannery in Portugal set up to supply ECCO with the leather it needed for its shoes. Today it is not only a stand-alone P&L contributor but also the global leading light for leather innovation, supplying leather to high-end designers like Alexander Wang and for high-spec high-tech consumer goods like the Apple watch. Following this success, Pannos has been given the remit for innovation for the whole of ECCO.
The question is what did he do?
The answer is lots of things. But at the core was the decision to host annual collaborative multi-disciplinary creative Hot-Shops. The ninth one ever held is in June and like those before it will bring together designers, buyers, production managers, marketers and leather technicians to co-create, produce and present, to inspire each other and ECCO. Behind this was an ambitious reimagining of what is possible for leather if you stop seeing it as a bland commodity. Other approaches they use include:
Identifying has-been products then hacking them back to success.
Asking questions that are not normally asked – like what happens if you put data analytics in a shoe?
Challenging and improving ideas while they were still just that, ideas.
They also created a top-secret innovation lab which only the Board have keys to, push the boundaries of what leather is and can do beyond the limits of what ECCO, the mother-ship, might typically allow.
Two smaller different examples highlighted the importance of continually harvesting employee ideas. If an Apple store employee has an idea they simply shake their iPad and a screen for capturing and communicating it appears. At Tesla the founder Elon Musk emailed employees and told them that if they have an idea and their boss doesn’t like it they have full permission to go over his or her head!
But innovation is not everything. Timpson continues to thrive despite: sticking to a tried and tested business model – buying up failing high-street businesses others can’t make money out of; wilfully ignoring the digital revolution; and keeping everything, and we mean everything, breathtakingly simple.
8: Use environment consciously and productively
It was clear that many of the organisations visited are tuned in to the importance of the physical environment, even if it was not discussed.
One Best in Class group had dinner at The Clink restaurant situated in a converted church at Styal. The Clink Charity was created with the sole aim of reducing reoffending rates of ex-offenders, faced with the reality that half of all prisoners are back inside UK prisons within a year of release. It works with Her Majesty’s Prison Service to run projects that train and up-skill prisoners. As part of this it has three restaurants, each of which looks, feels and in fact is high-end. Working in such settings gives them a chance to experience real work and real customer interactions all in setting that helps raise their aspirations for their lives beyond prison.
The reception at Timpson’s HQ is a Timpson store. This reminds all those that work there that their job is to support the people who serve customers not the other way around.
In the offices of Peter Jones, the John Lewis Store we visited, there are continually updated customer thermometers which feedback to Partners how different departments are performing, based on daily customer NPS scores. IKEA’s new HQ in Malmo is not only furnished entirely by IKEA but oozes the company’s values including ‘thrift’ – the stairs are made with waste materials from the furniture production process, and ‘openness’ – the central atrium is designed so everyone can see everything (OK not quite everything!) that’s going on. The building is also energy neutral, reflecting IKEA’s commitment to sustainability and announcement to the world in 2012 that it will be energy independent by 2020.
9: Relentless communication connected to purpose
In our experience there are three big things companies with strong communication cultures are good at.
1. They are plugged into all channels
Today’s communication environment is multi-directional, something Tesla’s Elon Musk gets. As well as communicating directly to his employees and customers using every channel possible he also listens and has been known to drive through service and product improvements from insights picked up on social media.
2. They use language carefully and deliberately
Lots of the organisations we visited have their own words and phrases. While for an outsider it can sometimes feel like stepping into a cult, we’ve no doubt on the inside this makes everyday concepts easier to communicate, reinforces values and helps foster belonging. Where this practice gets really interesting though is where it forces difference, where it disrupts, where it gets edgy. Apple describes its job as making products ‘irresistible’. ECCO Leather has Provocateurs and works on ‘crazy shit’. Tesla talks about its cars getting better with age, flipping an industry paradigm and opening up opportunities in doing so.
3. They are powerful storytellers
While the work and opportunities at Jaguar Land Rover might be exciting for an ambitious Millennial or post-Millennial, the company competes for design and tech-talent with the likes of Google and Apple not just other high-end car manufacturers, and is not based in Silicon Valley or Silicon Roundabout even. To counter this JLR UK tells and sells a powerful story of modernity and heritage fusing to create a great British success story. This helps it draw in top talent from around the globe.
10: Resilience & wellbeing
Our peek behind the curtains of these organisations gave us clues about what it’s like to work there – the upsides and perhaps some of the downsides. We also heard some examples of the structures in place to look after employees, typically strongly driven by the values of those organisations. Some of those we visited have also sought external validation – Rackspace, for example, was number 44 in the Sunday Times 100 Best Companies to Work For and number nine in the Great Place to Work listing for large companies this year.
But on the topic of resilience and wellbeing for leaders, the final word must go to Jeremy Hicks, Managing Director at Jaguar Land Rover UK who gave this common-sense hard to argue with advice, “Put a team of brilliant people around you so you are happy to go on holiday.”
The Wavelength Ten:
These leaders create and sustain a clear and compelling purpose to inspire and motivate people.
They talk AND walk – bringing purpose to life through authentic personal action.
They are uncompromising on cultural ‘fit’ and the deal with colleagues is explicit.
They align relentlessly, using structures not wish-lists.
They pursue operational excellence ruthlessly. Brilliant basics and magic touches.
They are on first name terms – with customers and their people.
They take a bold stance on innovation.
They use environment consciously and productively to communicate and reinforce behaviour.
They create a system of relentless communication taking every opportunity to remind people of what’s important, connecting them to the purpose:
Plugged into all channels
Deliberate use of language
10. They are mindful of their resilience and well being and they look after the people around them.
Written by Helen Trevaskis from interviews with Wavelength Co-Founders Jessica Stack, Adrian Simpson and Liam Black.
We could not have written this article without the support, generosity and honesty of our host companies, for which we are enormously grateful. Huge thanks go to our hosts: Four Seasons, Hampshire, Rackspace, Peter Jones, John Lewis Partnership, ECCO, Tesla, Apple, Timpson, The Clink, Jaguar Landrover, Southbank Centre, LEGO, and IKEA.
Some of the people mentioned in this article are part of the Wavelength Speakers Bureau. To view full biographies and to book them to speak at your own event please click on the links below:
Jude Kelly, Artistic Director, Southbank Centre
Georg Ell, MD, UK & Ireland, Tesla
John Timpson, Chair, Timpsons
James Timpson, MD, Timpsons
Best in Class is part of Connect – our leadership programme that inspires, develops and connects leaders whose professional paths would not normally cross. With clients from large corporates, social enterprises, charities and the public sector, we bring together a diverse community of 90-100 top leaders to learn alongside and from each other.