The following is a guest piece by Bill Capodagli.
What is corporate culture? One of my clients once defined it as what employees do when everything else is stripped away or what they do when no one is looking. Twenty years ago, corporate or business culture sort of just happened…good, bad or indifferent.
More recently, executives have learned that creating a customer-centric culture can lead to a huge competitive advantage. In 2005, J. Kotter and James L. Heskett published their 10-year research project – “Corporate Culture and Performance” – in which they compared companies that intentionally managed their cultures to similar companies that did not.
Here are some of their findings:
Managed Their Cultures
- Revenue growth of 682 percent.
- Stock price increases of 901 percent.
- Net income growth of 756 percent.
- Job growth of 282 percent.
Did Not Manage Their Cultures
- Revenue growth of 166 percent.
- Stock price increase of 74 percent.
- Net income growth of 1 percent.
- Job growth of 36 percent.
Culture is now a common word in the lexicon of American business. In 2014, after a massive amount of searches on Merriam Webster’s on-line dictionary site, “culture” was proclaimed the “word of the year. “ In 2016, 87 percent of respondents of Deloitte University Press’ Global Human Capital Trends identified “culture” as important to their organizations.
None of these findings surprise me in the least. In “The Disney Way 3rd edition”, we feature highly successful organizations that have realized great success with their customer-centric organizational culture initiatives.
Here are a few examples:
- Joe C. Davis YMCA Outdoor Center/Camp Widjiwagan – engaging their campers by “putting kids and guests first”.
- ACTS Retirement-Life Communities – practicing the core value of “Loving-Kindness” in everything they do.
- Ottawa County, Michigan – living the “Golden Rule” and celebrating their police officers who regularly receive customer service awards after giving motorists $200 tickets! (During one of my recent keynote presentations, one attendee said to me, “If you can make this work in government, you can make this work anywhere!”)
But not everyone is prepared for the hard work required to produce a customer-centric culture. An organization must be ready and capable of accepting a new set of values. If there is upheaval due to major product changes, mergers or acquisitions or other serious issues, the time may not be right to begin a journey that will require the organization to define their “dream” or mission, values and codes of conduct.
Leaders who determine that the organization is ready for change will need to make a long-term commitment. That means being “bound intellectually and emotionally to a course of action.” The intellectual commitment is easy.
Who wouldn’t want to achieve results similar to those reported by Kotter and Heskett? The emotional commitment is far more difficult; living the values, listening to the true needs of both employees and customers, and practicing the codes of conduct require daily focus.
One of the most important elements that helps solidify a customer-centric culture is a “story.” As we write in “The Disney Way 3rd edition”, “a story is for Main Street; a mission is for Wall Street”. Many organizations write polished mission statements, but they often have little substance and fail to produce passion.
On the other hand, stories that are powerfully created can rally and motivate team members to perform their roles in their own unique “show”. At Disney, in order to produce the best show, all departments and attractions rally around a story that engages guests.
Studies have shown that people are more than 20 times more likely to remember a story than a series of facts or a bland and meaningless mission statement. A great story engages our hearts as well as our minds and creates a mental image of the type of organization we are trying to create.
Two other important elements that drive a customer-centric culture are values and codes of conduct. Values represent the core of the organization or its “soul.” Values must become the “constitution”, part of an organization’s DNA, and the way difficult decisions are made.
Codes of conduct are the 10-15 positive behaviors that employees should be demonstrating to support the organization’s values. They are far more useful and meaningful than a policy manual that lists rules and regulations.
Codes of conduct give a general direction regarding how to behave, but enable employees to use their common sense to perform in their roles. When people know they are being trusted, they will rise to levels that will even surprise themselves.
To embark upon “The Disney Way” customer-centric journey, a group of leaders who will be entrusted to steer the process participate in “leadership week” – an experience in which they are totally immersed in “The Disney Way” principles. They prepare the vision, values and codes of conduct that will ultimately be adopted by the entire organization.
Many leaders take the time and effort to define their customer-centric culture, but then try to “roll out” the culture to all employees in brief company-wide meetings or departmental presentations. This approach is doomed for failure.
Just as the leaders spend a week defining the organization’s cultural elements, so should the employees be afforded several days to come together in a retreat setting to challenge their old values and begin to adopt the new ones. If it were as easy as announcing that a customer-centric culture is in place, every organization in the world would have exceptional customer service!
Many leaders have a “hot button” that sparks them to begin transforming their organizational cultures. As was presented in the study by Kotter and Heskett, financial rewards are often how such change is initiated. And yet, even without the hope of increased revenue or profits, creating a customer-centric culture is important. Consider employee morale and “engagement.”
The Gallup organization recently reported that only 30% of employees are “engaged” in their work; Spherion Staffing Services reported that only 25% describe their workplace as “happy”. The benefits derived from having “highly engaged” employees who are having fun and enjoy their work are staggering.
Creating The Disney Way customer-centric culture takes commitment at all levels, but consider that you will have the opportunity to soar above the competition!
Bill Capodagli co-founded Capodagli Jackson Consulting in 1993, and has since become one of the most requested keynote speakers on the corporate cultures of both Disney and Pixar. He is also a well-known expert on customer-centric culture transformations in which he guides leaders to adopt Walt’s timeless success credo. To learn more about Bill’s work, visit his website www.capojac.com.