Most CEOs agree, the three legs of a great company with great product are passionate employees, loyal customers and superior financial performance. But these often-elusive goals pose important questions. How can executives build strong cultures? What is the dynamic between passionate employees and loyal customers? Is there in fact a connection to financial performance? In search of these answers I put together a panel on March 18, 2015 of thought leaders from companies possessing the three legs of greatness.
- NetApp Vice Chairman, Tom Mendoza. NetApp was "was voted #1 in America in 2009 and for the past 3 years has been top 3 best companies to work for globally. Notre Dame’s Mendoza School of business was named after Tom.
- Amica Insurance Chairman, President and CEO Bob DiMuccio. Since 2005, when Bob became CEO of the 108-year-old mutual company, Amica has won a remarkable 29 J.D. Power awards.
- Build-A-Bear Workshop CEO Sharon Price John. During Sharon’s first 18 months as CEO, the beloved company’s stock grew from 6 to over 20.
- Aflac President U.S., Teresa White. Aflac, over the past 9 years, has been named a world’s most ethical company while its revenues have increased from $14 billion to $22 billion.
1. Many leaders struggle with how to get executives and employees to embody corporate values. In one sentence, what advice do you have?
Teresa White, Aflac: “At the end of the day, it’s not about what you say; it’s about what you do.”
Sharon Price John, Build-A-Bear: “Make sure you’re creating a mission that feels greater than the individual and even greater than the company.”
Tom Mendoza, NetApp: “Be clear about what your values are and live up to them.”
Bob DiMuccio, Amica: “It’s all about respect - respect for your customers, respect for your employees and respect for your constituencies.”
2. What values are most important to your company?
Tom Mendoza, NetApp: “Trust and integrity. Since we help clients build out data infrastructure everything has to be built on trust. I’ve always said you find out if you’ve got a friend when you’ve got a problem. We want to make sure that we’re the company that is there when someone has a problem.”
Sharon John, Build-A-Bear: “Reaching, being intellectually curious and collaboration are all a part of our culture and help elevate who we are as an organization. In today’s dynamic retail environment, if you don’t have an embedded need to keep moving and growing while working together, you won’t be successful. Retail does not stop changing, so neither can we.”
Bob DiMuccio, Amica: “Our mission is to create peace of mind and build enduring relationships. So trust and reliability are the core values for our two main constituencies - policyholders and employees.”
Teresa White, Aflac: “Transparency is most important. The Aflac Way is our set of values with seven commitments, including: communicating regularly; responding immediately; knowing your stuff; treating everyone with respect.”
Tom Mendoza, NetApp: “And if I can add, I’ve been asked to speak to a lot of companies about what builds culture, and candor is a big deal. People always say, ‘I wish my bosses could hear this’ and many times you talk to bosses and they say, ‘We have candor. I say anything I want to say.’ Employees and customers must feel like you’re telling them truth, and good or bad they’re getting the straight scoop. And at meetings, everybody feels better if their issues are on the table whether or not the decision goes that way. If you feel like you’ve been listened to, if someone makes a decision even if you don’t agree, you’re usually okay.”
Teresa White, Aflac: “Well actually Tom, you just basically talked about commitment number six that is named “Shoot Straight,” and it basically says, honesty really is the best policy and there’s a lot more that it entails. Our CEO Dan Amos always says, ‘Bad news doesn’t get better with age.’ ”
3. What’s the secret to incredible customer service?
Bob DiMuccio, Amica: “On any given day, we have about 2,000 customer-facing folks who service our policyholders. So what does our rep do to resolve a customer’s issue at that moment? Well, when there’s not a perfect rule for the situation, they call on our values and our culture. And if the rep has been with Amica long enough, they understand what management or the company would want them to do in these situations. When they make a decision with our core values in mind, then you’ll have a satisfied customer.”
Sharon Price John, Build-A-Bear: “Like Bob said, when you have thousands of employees who are on the front line with face-to-face, one-on-one interfaces with consumers, there isn’t a service model that covers everything. You can’t open a rulebook. So, it has to be so engrained in the culture on what’s the right thing to do, which is hard to teach. So hiring the right person becomes that much more impactful. We use a term called 'Bearlieve,' that helps them to think through, you know, bearlieve in the right thing, making it right for the consumer.”
Teresa White, Aflac: “I think the key thing that you said, Sharon, is that you will be supported with that choice, because I think people will only do the things that they are supported and rewarded to do. If you consistently reward behaviors that are good behaviors, then people will tend to do more of those behaviors. If you consistently reward bad behaviors, or if you’re inconsistent in how you reward as a leader, then people will do whatever they feel comfortable doing. And when you talk about building a culture, you have to build your reward systems around what behaviors you want to see. I’m a firm believer in looking at what we are actually rewarding people to do.”
Tom Mendoza, NetApp: “I agree 100% with that. I think people emulate the behavior you recognize. I started something in our company at the beginning. The saying is, ‘Catch someone doing something right.’ So to this day, if anybody in the world sees somebody do something extraordinary to help a customer, to help NetApp, to help society, they send me an e-mail and I make calls. I average 10 to 15 calls a day, and I’m far from the only person in NetApp doing this, but here I am 21 years later still making the calls. It really has an amazing effect when you call because the stories of good behavior and what you recognize, I think that’s how it becomes tribal.”
4. What is the relationship between culture, customer and financial performance?
Sharon Price John, Build-A-Bear: “Our mission is to 'add a little more heart to life.' It is our goal to make each visit to Build-A-Bear Workshop special by creating a personalized interaction with one child at a time--whether it’s during the heart ceremony or through one of our cause partnerships, we want the experience to be meaningful and our Bear Builders are instrumental in that exchange. The creation of shared meaning between our employees and consumers brings 'a little more heart to life' for our Bear Builders, and it shows in their positive attitude and dedication to the company, which ultimately lead to increased sales and higher retention rates.”
Bob DiMuccio, Amica: “Your most valuable customers are the ones that are with you for a very long period of time. So retention of a customer is incredibly important. The acquisition of an additional customer is very expensive in the insurance business, as I’m sure Teresa knows very, very well. So the key to the retention of customers is building genuine relationships, and the core values that our folks impart are essential. We want our customers to say, 'Amica’s a company that appreciates me, that takes care of me,' and those values translate to top retention rates that drive our financial performance. That’s why, when we hire, we don’t necessarily look for people with insurance experience. We look for people with values that understand and appreciate exceptional customer service and being there for our policyholders.”
Teresa White, Aflac: “I often tell people, business is almost like a marriage and you have to know who you’re marrying before you get into the marriage. And sometimes there are values that a corporation has that really rub against your own personal values, and then I tell people when I’m advising them from a career standpoint that they need to get out of the marriage because it won’t work. From a transparency standpoint, we talk about what success looks like. So, we’re transparent in saying, ‘Here are the expectations. Here are your clear goals and objectives, and here’s what we don’t want to see.’ So, the line between the corporate values and financial performance to me is a line of really understanding what success looks like, having those clear metrics that say when you won because everybody wants to know and wants to be able to see it. You know, nobody goes to a football game and doesn’t pay attention to the score. So, we want people to know if they’ve won or not.”
Tom Mendoza, NetApp: “When NetApp and I started 21 years ago we decided number one we’re only going to hire people who want to be here because nothing great has ever been done by someone who didn’t want to do it. Number two, we’re going to build an organization built on respect. Number three, we’re going to deliver, which is what Teresa just said because all the stuff that we’re talking about doesn’t matter if you don’t deliver and win.
I use the word ‘culture’ more than ‘values’ quite honestly. I have been in companies that are horrific, meaning nobody thinks they’re a good company to work for and I look on the wall and their values are the same as ours. They just don’t live them. So, the culture to me is what behavior do you witness when you walk in the door. All of us four firms today have solid financial performance for a reason that’s pretty clear after today’s conversation.”
In summary, regarding the original question of the connection between culture and customer focus with financial performance, Maria-Paz Barrientos, Vice President, GBS Talent & Change Center of Competency, IBM sums up the findings from a recent IBM study of 4,186 C-suite executives, “The study found that a key similarity between companies who consistently outperformed their peers financially was the growing focus on the importance of culture and a common set of corporate values.”
To listen to more of Robert’s interviews with CEOs go to www.ceoshow.com
