How to Win by Putting Customers at the Core of Your Business
By Frances Frei and Anne Morriss
Published by Harvard Business School Press
ebook ISBN: 9781422142363
Copyright © 2012 by Frances Frei and Anne Morriss
CAST OF CHARACTERS
We break up these concepts for the sake of pedagogy, but in fact our message is highly integrative. It doesn’t work to just focus on a subset of these concepts; you have to go after them as a whole. And so we revisit many of the same companies throughout the book to illustrate how the parts work together. Of course, we supplement these stories with many others along the way, but here’s an introduction to some of the protagonists that will be making multiple cameos (in order of appearance):
“Commerce Bank”—With an unconventional business model that broke the unspoken rules of customer engagement, Commerce Bank became the fastest growing retail bank in America.
“Southwest Airlines”—A favorite of business school professors, Southwest remains an exception to the rule that airlines must lose money and make their customers miserable. And it has done so by proving that uncommon service isn’t the exclusive domain of high-priced, high-end offerings.
“Ochsner Health System”—Ochsner is delivering world-class patient care in communities still recovering from the aftermath of Hurricane Katrina, while taking a leadership role in transforming the U.S. health-care industry. Despite the cost sensitivity of its patient population and the operational complexity of health care, Ochsner is refusing to produce anything less than excellence.
“Bugs Burger Bug Killers”—In an industry where competitors only promised to do their best, BBBK became a sensation by “guaranteeing” complete customer satisfaction. But it meant that business as usual wasn’t possible. Everyone, particularly clients, had to work a lot harder.
“Magazine Luiza”—This huge Brazilian retailer provides exceptional service to an unconventional market: poor, “unbanked” rural customers who are often not functionally literate. For the model to work, the company had to develop creative, new systems for managing customers and meeting their needs.
“LSQ Funding Group”—LSQ uses an innovative service design not only to revolutionize the value it creates for small businesses, but also to set its employees up to excel as a matter of routine. By embedding much of the job’s operations in an intuitive information technology (IT) system, LSQ enables its employees to deliver uncommon service literally on day one.
“Zappos”—The high-profile Internet retailer has designed a winning service model, which it gladly shares with the growing number of observers who want to study it. That’s because the real driver of its extraordinary success is much harder to copy: an organizational culture that brazenly challenges the most basic assumptions about what work and commerce are supposed to feel like.
We want to stress here that we’re looking at these and other organizations at a moment in time, when the choices they made had something special to teach the world. It doesn’t mean that these companies retained their status as role models. Like many companies, some of them lost their momentum, if not their ways entirely. Sometimes this happens because of integration realities—a company’s service model and culture simply get absorbed or diluted by its buyer. And sometimes a company is bought by new owners who don’t fully understand the origins of their acquisition’s exceptional success. They skillfully run the numbers, but they don’t see the links between finance and operations clearly enough. We hope to expose those links, for both current managers of service companies and those who may replace them in the future.
THE COMMITMENT TO SERVE
In short, we want to be helpful. Our collaboration was born from the shared belief that the commitment to serve is ingrained in the human soul—and the shared observation that this commitment often fails to translate into sustained acts of service, even with the best of intentions. Frances first saw this challenge in her academic research and while in the trenches with executives trying to improve service in their own companies. Anne first saw it on the front lines of mission-driven organizations in the public and nonprofit sectors. Good people with good ideas were not enough.
Our ambition, with this book, is to help you build an organization that truly reflects your humanity, one that can shamelessly deliver uncommon service.
TRUTH NUMBER 1:
YOU CAN’T BE GOOD AT EVERYTHING
Vernon Hill is a banker who started out in real estate, scouting new locations for retailers. One of his first clients was Mc-Donald’s, and some say the Happy Meal inspired him. One thing is clear: as the founder and CEO of Commerce Bank, he built a wildly successful enterprise that rewrote the rules of an industry. And he did it by daring to be bad.
We feature the story of Vernon Hill’s creation—Commerce Bank—because it allows us to show how a company can design a great service offering, largely by making a series of carefully chosen and carefully integrated trade-offs.
When Hill started out in 1973, his vision was to build a bank not in the image of the leading financial institutions but modeled after the most successful retailers. Conventional wisdom at the time was that banks grew by offering the most attractive interest rates on deposits. The industry also assumed that the best way to accelerate growth was to aggressively acquire other banks. Commerce offered the worst rates in the industry, made very few acquisitions, and yet became the fastest growing retail bank in America. Its dynamism drove a 2,000 percent rise in its stock price in the 1990s.
The bank achieved its success by deciding to be great at some dimensions of service and bad at others. Not casually bad, but bad in the service of great.
part four of ‘Uncommon Service’ appears here tomorrow; in the meantime, if you’re enjoying this selection from the Oakville Public Library Business Online Book Club, go to your local library or better still, Buy the Book