Book Review: Scaling Up Excellence

The authors call it "The Problem of More."

Organizations face a challenge when they identify a best practice and try to do more. Maybe one location in a retail chain is doing something terrific and executives want every location to do the same thing.

Replicating a best practice or an innovative solution throughout a company seems like it should be so easy, but it isn't.

That's the issue tackled in Scaling Up Excellence: Getting to More Without Settling for Less by Robert Sutton and Huggy Rao.

 

Overview

The lessons in this book can be applied to a wide range of challenges.

They describe how a failing hospital re-energized it's staff and turned it's fortunes around. Or, how companies like JetBlue or Disney create and sustain their famous customer-focused cultures.

The book immediately resonated with me in two ways. 

First, it's written as a how-to guide, but there are plenty of interesting real-life stories to spice it up. Second, much of what the book discusses is fundamentally organizational culture.

I read it as research for a book that I'm writing, The Service Culture Handbook, but I found it to be very enjoyable on its own.

The book starts by outlining a general philosophy for scaling excellence. It then describes five core principles and provides some general advice for implementing the ideas in your own organization.

 

Take-Aways

There were quite a few take-aways in this book. Here are my top three:

Think Big + Small. Yes, you need to have a smart program to scale a best practice across an organization, but you also need subtle nudges to get things moving. For example, leaders need to consistently insist on modeling best practices.

Bad Apples Ruin It. Sutton and Rao suggest that people who actively work against an initiative have a far more damaging effect than people who actively support it. You see this time and time again in organizations where individual leaders undermine a program by insisting on doing their own thing. 

You Must Have Excellence. The book contains a quote that's both a blinding flash of the obvious, and an explanation for why so many corporate initiatives fail:

To spread excellence, you need to have some excellence to spread.

 

Buy This Book

The book is available in a variety of formats on Amazon. You can also check out more of my recommended reading list.

 

Why Culture Initiatives Fail

“We’re working on culture this year.”

I wish I had a dime for every time I heard an executive make that announcement. I’d have a lot of dimes.

It seems like everyone wants a great culture. One that’s customer-focused. And why not? A strong culture promises many benefits:

  • Employees will happily do the right thing
  • You’ll attract top talent
  • Customers will sing your praises

CEOs like to boldly announce that culture is a priority. Even Comcast is getting in on the culture game by announcing a major new initiative.

Most of these initiatives will fail. Here are three reasons why.

Undefined

It’s hard to be good at something if you can’t define it.

The vast majority of organizations I talk to do not have a clearly defined culture. I’m not referring to the standard set of cultural artifacts like mission, vision, values. Let’s face it - most of those are hollow and empty.

I'm talking about something real. A clear compass that points people in the right direction.

The litmus test is to ask any random employee to describe the culture. Chances are, you’ll get a puzzled look or an answer that’s inconsistent from one person to the next.

The few companies who succeed with culture ensure every employee can answer three questions:

  1. What is our culture?
  2. How are we doing?
  3. How do I contribute?

 

Mimicry

Culture initiatives fail when companies try to copy someone else’s culture. 

That doesn’t stop companies from trying. A CIO once told me he wanted his team to be like the Apple Store. When I pressed him for details, the best he could do was say, “I want them to be good at service. You know, like the Apple Store.”

There’s a long list of books extolling the greatness of other company’s cultures. The Nordstrom Way, The Disney Way, The Virgin Way, The Cleveland Clinic Way, and the Southwest Airlines Way are on all sale right now. 

The absolute peak is when you can turn your culture into its own brand. The Ritz-Carlton and Disney offer classes on how to be more like them. Zappos now charges 10 bucks a head to tour their Las Vegas headquarters. 

Trying to copy another company’s culture fails because it’s their culture, not yours. Each company is unique. And, copying another culture ignores all the hard work the other company needed to get where they are today.

Great cultures can provide ideas and inspiration. But, they’re not paint-by-numbers guides.

 

Delay

Culture initiatives don’t work when they’re a side project.

Here are a few excuses I’ve heard for delaying a culture initiative:

  • “We’re knee-deep in system stuff right now.”
  • “We’d like to do it, but we don’t have the funding.”
  • “We’re focused on employee engagement right now.”

These excuses are convenient, but they really reflect a deeper misunderstanding about culture. Developing a strong culture is core. It’s fundamental and strategic.

A great culture would help make all of those decisions easier!

You have to live your culture if you want it to succeed. In-N-Out and McDonald’s started with the same three words to define their culture, but only In-N-Out actually lived them.

Treat it as a side project at your own peril.

 

Building a Strong Culture

You might want to start by reading about a successful cultural initiative.

Here are two resources to help you build your own customer-focused culture:

These resources can help, but there are no short-cuts. Culture initiatives can only succeed through a deep commitment.

How In-N-Out Almost Became McDonald's

I go to In-N-Out Burger a lot.

The law of averages suggests I should have had a bad experience at least once by now. Some visits have been better than others, but I’ve never had a bad experience. Not one.

I’m not alone in my admiration of In-N-Out. They’re consistently ranked among the top fast food chains in customer satisfaction. The chain only has locations in a handful of states, but people all over the country and even outside the United States have become fans, with some devoted followers even planning a business trip or vacation itinerary around a visit to an In-N-Out. 

What’s the secret to In-N-Out’s success? It may be easier to understand if you compare them to a similar restaurant that struggles with customer service: McDonald's. 

The two have a lot in common. While McDonald's has a more diverse menu, both are fundamentally fast-food burger joints. Both were founded in Southern California in 1948. Many fast-food service concepts in use today originated at either In-N-Out or McDonald's. The two companies even use the same three words as a foundation of their operating principles: quality, service, and cleanliness.

So why is the customer service experience at these two restaurants so different? In a word, culture. Culture defines everything these organizations do when it comes to customer service. 

In-N-Out founder Harry Snyder made sure the principles of “Quality, Cleanliness, and Service” were more than just platitudes. He instilled them in everything the company did – and these principles are still present in everything In-N-Out does today. Their food is fresh, not frozen. Their stores are clean, even during busy times. Their employees are friendly and well-trained. In-N-Out has maintained their remarkable consistency by steadfastly refusing to franchise their stores and resisting the urge to expand too quickly.

Culture also shapes many of their business practices, such as hiring employees. In-N-Out’s management believes a high-caliber employee is necessary to provide the service and quality they know their customers expect. They offer better wages and working conditions than their competitors which contributes to one of the lowest employee turnover rates in the fast food industry.

When Ray Kroc purchased the McDonald's concept from the McDonald brothers, he focused on rapidly expanding the business. The words quality, service, and cleanliness were clearly less important than a growth strategy based on volume, cost control, and franchising. For example, their frozen burger patties are cooked in approximately 42 seconds using a special clam-shell grill that cooks both sides of the patty at the same time. This is a remarkably fast and inexpensive way to cook burgers, but it may also be why McDonald's finished last in the 2010 Consumer Reports fast food burger rankings. (Yes, In-N-Out was rated #1.) 

While franchising allowed McDonald's to grow into a global giant, it also made it difficult for the company to control the quality of service delivered at its restaurants. Today, approximately 80 percent of their restaurants are run by franchisees and only 20 percent are run are by McDonald's, Which means the service customers receive from most of its establishments is determined by the management skills and customer service philosophy of an independent franchise owner rather than by the McDonald's organization. 

Of course, there are exceptions to every rule. Culture isn’t exclusively defined by an entire organization. Even at McDonald's, stores with managers who are good at engaging employees and motivating them to deliver outstanding service typically bring in 10 percent more revenue per year than the average.

 

Learning Point:

Values alone don’t define your culture. It’s what you do that counts. For another terrific example, read how Phone.com is operationalizing their values to turn them into action.

 

How to Hire for Culture Fit

There are two employees almost every customer service leader has had.

One employee has crazy talent. She has all the skills you could ever want and a resume a mile long. She’s also a pain to work with. Customers sometimes complain about her attitude.

Another employee is a little lighter in the skill department. He needs a lot of training, but he’s a natural problem-solver and a quick learner. Customers love his can-do attitude. Co-workers love his teamwork.

Who would you rather have on your team?

Most of us would prefer the employee who fits our culture over the highly skilled, but highly difficult employee.

Here’s a guide that can help you find more of those people.

Step 1: Define Culture

Imagine what the world would be like if there were no shoe sizes. You would walk into a shoe store and be completely unable to tell the salesperson what size shoe you needed. The only way to find shoes that fit was to try on pair after pair until you found one you liked.

Pretty tedious, right?

Hiring for culture fit without a clearly defined culture is the same thing. It’s pretty difficult to find something if you don’t really know what you’re looking for.

So, what is culture?

Culture is what we do. And, what we do is shaped by all the signals around us. Some signals are good and point us in the right direction. Some signals are bad and distract us. 

You can fix this by creating a customer service vision. This is a shared definition of outstanding customer service that serves as a compass to point everyone in the right direction. You can use my customer service vision worksheet as a guide. 

 

Step 2: Create an Ideal Candidate Profile

An ideal candidate profile describes the attributes of an employee who is most likely to be successful in the job. It combines the skills they need to do the work with the qualities they must possess to fully embrace the customer service vision.

You can use this handy worksheet to help you.

The key to this exercise is narrowing down your list to just a few must-have skills and attributes. The more must-haves you add to the list, the harder it will be to actually find a person who fits.

 

Step 3: Develop Tests

The last step is to devise ways to determine if a job applicant possesses the attributes they need to be successful.

Think beyond interview questions here. How can you get concrete evidence that they’re a great fit?

Here are a few examples:

A technical support team asks applicants to respond to a customer email. This allows them to test the applicants’ resourcefulness (the answers are on the company’s website) along with their communication and customer service skills.

The parking department on a college campus deliberately neglects to offer directions to their office when they schedule interviews with job applicants. They rely on applicants to either be assertive enough to ask or creative enough to figure it out on their own. An applicant who arrives late for an interview because they couldn’t find parking is probably ill-suited to helping customers navigate the same obstacles.

 

Additional Resources

Whole Foods, Southwest Airlines, and Zappos are all known for outstanding service and strong cultures. Check out the hiring page for each company. They all focus deeply on culture fit. 

Do your service channels have multiple personalities?

How many personalities do your service channels have?

How many personalities do your service channels have?

The proliferation of multiple service channels is making customer service harder for companies to manage. The task is even more daunting when each channel has its own distinctive personality.

Not all of these personalities are good.

I recently wrote about a service experience at American Airlines where my suitcase was delayed. Every person I encountered was friendly, but they were all very different. It wasn’t just a product of the employees’ individual personalities. Each service channel seemed to have its own vibe:

Baggage Counter. These folks have seen it all. Nice, but curt.

800 Number. The call center agents were friendly but perfunctory.

Twitter. The American Airlines twitter personality is light, engaging, and helpful.

Customers will take your channels’ personalities into account when deciding how to contact your company. For many organizations, this may be one more way you are training your customers to complain via Twitter.

 

What causes these multiple personalities?

One culprit is channel ownership. A 2012 study by Ragan found that only 19 percent of companies had their customer service department manage or co-manage their social media channels.

Who does manage social media? The list of top five departments is very revealing:

  1. Marketing – 70%
  2. PR – 69%
  3. Corporate Communications – 49%
  4. Advertising – 26%
  5. Customer Service – 19%

See a trend? The data suggests that most companies still operate under a philosophy that social media drives sales but customer service is a cost center.

Many companies also look at traditional one-to-one customer service channels as being very different from one-to-many. This isn’t totally unreasonable. That call where your employee was a total jerk to your customer was only recorded for quality and training purposes and not for broadcasting over the internet.

Of course, this short sighted approach misses a very important detail. People still have the ability to share their version of the story via with their own online networks. Want proof? Check out the Twitter hash tag #comcastsucks.

The fix to this problem is changing the corporate philosophy to firmly realize that customer service drives sales. Those one-to-one interactions are all preserving sales and creating future ones.

Another reason service channels can have multiple personalities is nobody has taken the time to define what outstanding customer service looks like for our organization. A recent survey I conducted revealed that only 62 percent of companies had created their own definition of outstanding service.

It's no wonder each channel does it's own thing without a single owner or a unifying definition to guide them.

 

Small business gets this right more often

Unifying service channel personalities is one area where small businesses have a huge leg up over larger organizations. The smaller scale makes it easier for one person, often the owner, to infuse his or her personality into each channel. In many cases, the owner is also primarily responsible for each channel.

Antica Trattoria is my favorite Italian restaurant in San Diego. Their food is outstanding and their service is warm and personal. They also have consistent personalities across all of their channels.

Chef and owner Francesco Basile personally manages their social channels. He runs their Facebook page and responds to reviewers on Yelp. If you dine there, you are likely to meet him while he's mingling with guests. Basile’s hands-on approach translates to a consistent feeling no matter how you interact with the restaurant.

How can larger companies emulate this? By doing the same things they do to scale up other parts of their business from small to large.

  1. Codify it so your organization’s implicit understandings become explicit.
  2. Measure it we can gain a clear picture of how well we’re doing.
  3. Manage it so we can ensure we’re heading in the right direction.

Not coincidentally, these three steps match the first three steps an organization must take to create a customer-focused culture.

The impact of conformity on customer service

Have you ever wondered why a company tends to have consistent service levels amongst all its employees? Sure, there are exceptions here and there, but a company known for poor service tends to be consistent. A company known for great service tends to be consistent too.

Why is that? One explanation could be the pressures of social confirmity. Employees may give in to social pressure to behave the same way other employees do. This means that if the culture supports poor service, otherwise good employees may lower their own performance rather than feel ostricized by their co-workers.

I've discovered some interesting psychological studies on conformity while conducting research for my book, Getting Service Right. Here is a short and entertaining YouTube videos that highlight some of the results:

The video below recreates the famous Asch conformity experiment:

So, what do you think? Can a good customer service employee turn bad in the wrong environment?