Service Excellence

By The Drum, Administrator

November 8, 2002 | 12 min read

If you look after your people, they will look after your customers, who in turn will look after your profits. Or so the theory goes. Maybe you put your customers first, or perhaps people are your organisation’s most valuable asset?

Most of us claim to be customer focused and service driven. We can certainly talk a good fight and probably do a great deal in respect of being market facing. After all, doesn’t our company vision and mission statement in the annual report and reception area prove it? The difficult question for most organisations is how do you achieve buy-in from the shop floor to the boardroom? If randomly asked by a visitor, would your employees be able to succinctly communicate the purpose of your organisation or its strategic aims? Could they articulate the values and norms that underpin the culture in your company and most significantly, if they were able to do this, would they really believe it?

Stew Leonard’s (SL) is ranked at No. 22 in Fortune Magazine’s “Top 100 Best Companies to Work For in America” list. This was a debut ranking in January 2002 for this family owned company who claim be the ‘The World’s Largest Dairy Store.’ SL’s commitment to customer service supremacy is cast in stone. Standing at the entrance to each of their stores is a six-ton rock with the following etched message:

‘OUR POLICY’

Rule 1 – The Customer Is Always Right

Rule 2 – If The Customer Is Ever Wrong Re-Read Rule 1.

All well and good, but does it work in practice?

Jill Leonard, daughter of founder Stew and Executive Vice President of People Management was our guide and host. Jill was waiting for our coach outside in the car park and a royal like reception occurred whilst customers made their way into the store. The SL experience takes you one way through the store and not up and down aisles. Jill knew each section manager and their respective teams by name and asked each to present as we arrived, to present their section to the 26 of us. Enthusiastically and confidently we were consistently informed that ownership of the job was the most rewarding aspect of working for SL. The managers were empowered to source suppliers and set prices; the only law was ‘If it’s not good enough to take to your mother don’t put it on display.’

Bakery Manager John provided a great example of the SL philosophy. His 52 strong team turn over $200,000 per week ($10.4m pa) and 10% of total store t/over. He produces 60 freshly baked lines each day and as ‘Fresh Is King’ at SL, nothing is carried over to the next day. All surplus produce is distributed each evening to local needy causes and churches et al. John runs customer focus sessions each month to drive product development. ‘Muffin Tops’ is now a firm favourite as a result of listening to parents whose children only ate the top of the muffins and left the rest.

Regular staff meetings in each section ensure that clear communications and focus are maintained and each employee is empowered to compensate irate customers without prior referral ensuring a seamless and slick service. The overriding goal of SL is to create happy customers that come back again and again. To achieve this they have nurtured a policy of only hiring ‘nice’ people to train. They believe that attitude is the most important quality and a good attitude leads to teamwork resulting in excellence and success.

The tour closed with a fine lunch and outstanding session from Roy Snider, one of SL’s store managers. Roy gave a powerful speech on positive mental attitude and left us with the thought that “If you always do what you’ve always done, you’ll always get what you’ve always got.” We were then each presented (by the SL bovine mascot) with our personalised framed graduation certificates of the Stew Leonard’s University!

On to Memphis and a midnight tour at the World Hub of the FedEx Corporation.

FedEx Corporation is the umbrella brand for six operating divisions. The most famous of which is FedEx Express.

FedEx Express is the world’s largest express transportation company. It’s global transportation network provides worldwide delivery of documents, packages and freight shipments via a service that is reliable, rapid and time-definite, connecting markets that constitute 90% of global economic activity within 1 to 2 business days. Not bad eh?

I confess to having sneered at Castaway, the two-hour commercial presented by Tom Hanks. Granted, employees may well be committed to the cause... come on! At the midnight tour of the FedEx World Hub (shoot location for aforementioned infomercial) I saw many re-incarnations of the Tom Hanks character. In fact, over 8,500 people make up the night shift which commences at 11.00 pm. They sort over 1,000,000 time critical packages and these are unloaded from over 100 inbound FedEx Express aircraft and then information systems guide each package through a mesmerising labyrinth of 200 miles of conveyors and scanners (This enables FedEx Express to tell you exactly where your shipment is at any given time) and re-loaded onto 140 outbound aircraft. By 5.00 am over 140 laden planes have departed for worldwide destinations. The same process begins at 10.00 am. This is truly a logistical wonderland and a highly complex yet paradoxically simple operation requiring exquisite choreography of the workforce. The same process is occurring simultaneously at hubs in Indiana, Alaska, France, California, Texas, New Jersey and the Philippines.

The FedEx operation is impressive and whilst the technological and service execution is clearly evident, it is the enduring management philosophy that facilitates success for this global leader. As with Stew Leonard’s, FedEx was listed this year by Fortune Magazine as one of the top 100 American companies to work for.

Founder, Fred Smith, was a marine in Vietnam who whilst serving, formed the view that taking care of your people will ensure that they deliver the impeccable service demanded by customers who will in turn reward by generating the profitability necessary to secure the company’s future. Again, as with SL the hierarchy of focus is employees – customer service – profit.

People – Service – Profit (PSP) guides the FedEx Corporation. A number of techniques are employed to attract, train and retain committed and motivated people. When you are consistently recognised as one of the best employers in the USA, recruitment becomes less problematic. This doesn’t create complacency at FedEx however and training represents a significant investment. Each employee receives an average of 40 hours per annum. Call centre agents spend six weeks in the classroom before going live and every employee sits an annual exam and must pass to avoid remedial training.

Annual reviews of performance are linked to pay awards. Management and staff agree goals in advance. Managers are judged each year by the ‘Survey – Feedback – Action’ programme. (SFA) This rates managers’ leadership skills and effectiveness. FedEx survey all employees and teams are canvassed on their opinions of their respective bosses. Managers are indexed and must improve on areas of poor performance or risk being replaced. Myron Lowery, Corporate Communications Manager, shared his previous review with our group and gladly explained where he was focused on improving his leadership style.

Reward and recognition is vital at FedEx and a number of schemes are in operation. Each is underpinned by the FedEx philosophy of People - Service - Profit. For example, service quality indicators (SQI’s) measure the level of customer dissatisfaction or discomfort. An integral part of this process is the barcode scanning of every single shipment, which facilitates tracking and provides accurate information for customers seeking information on their shipment’s status. Information on slippage or deviation from the norm is captured and used to improve service levels. All FedEx employees believe that regardless of whether they come into contact with customers or not, the part they play is vital to the overall goal of customer service excellence.

Communication at FedEx is truly universal. An $8 million investment in FXTV has linked the many divisions across the globe. Employees are able to listen to Fed Smith announce results live to Wall Street analysts and many other messages and programmes are broadcast via this channel. The main benefit to FedEx however, is the ability to continue to institutionalise its strategy and philosophy in a growing worldwide organisation.

On to Dallas and a rare insight into one of Fortune Magazine’s top four American companies to work for. This was an almost religious experience, providing the highlight of the week for both myself and other members of our group.

Ever heard of Herb Kelleher?

He is the chairman of Southwest Airlines. (SWA) Herb, as he is affectionately known, was the young attorney who thirty years ago backed a plan of one of his clients to launch a ‘no frills’ airline serving three Texan cities, Dallas, Houston and San Antonio. The original notion was simply “If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares and make damn sure they have a good time doing it, people will fly your airline.”

In three decades Southwest Airlines has grown to be the fourth largest major American airline.

The stunning statistics (see Fact File) are the results of a unique leader and his ability to infect the entire workforce with his enthusiasm for great customer service, love and respect of colleagues and creation of a family mentality that is almost tangible upon meeting Southwest Airline employees. Southwest Airlines under Herb Kelleher has consistently shown a total disregard for conventional business practice and remains true to a culture that encourages all employees to be themselves and have fun. At the SWA head office at Love Field Drive, Dallas, every corridor’s walls, on every floor are covered with framed pictures of employees, their family events, their successes, their pets, holiday snaps and fancy dress events. Literally everything you could imagine.

On entering the Head office in Dallas you are faced with the following message.

“The people of Southwest Airlines are the creators of what we have become and what we will be.

Our people transformed an idea into a legend. That legend will continue to grow only so long as it is nourished – by our people’s indomitable spirit, boundless energy, immense goodwill, and burning desire to excel.

Our thanks – and our love – to the people of Southwest Airlines for creating a marvellous family and a wondrous airline!”

The most poignant moment during the day was had outside the boardroom and for me encapsulated the entire SWA philosophy. A photograph of an eight year old girl called Shea Runnels hangs next to the entrance. Shea died of cancer in 1988 and was a friend of Herb Kelleher and many others in SWA. Accompanying the picture is a farewell poem to Shea written by a SWA manager. Shea had participated in fundraising with Herb Kelleher for the ‘Ronald McDonald House’ children’s charity in Dallas.

After a day at both SWA head office and the unique ‘University For People’ where we met and talked with many family members one can only conclude that there is a great deal to learn about the value of fun, love and family values in the workplace. At SWA they genuinely walk the talk and 640,000 job applicants last year would goes a long way to bearing that out.

Summary

The three organisations I have described here are undoubtedly world-class providers of outstanding customer service. All nine companies visited on this study tour exhibit a number of common characteristics irrespective of their particular business purpose. Each is Consistent in their approach. Each believe Profits follow Employees and Customers. Each practice daily re-enforcement of the fundamental values of their organisation. Each hire people for their attitude not their CV. Each share a passion for delighting customers and recognise the importance of communication with their people. Critically, each has an explicit vision, mission and core values that key stakeholders understand, embrace and live by.

Finally, how’s this for customer service excellence?

The Ritz-Carlton Hotel, South Central Park, Manhattan, was one of our subject companies and place of refuge whilst in New York. Upon our arrival we were greeted outside the hotel by the door staff and our bags taken from us. By the time we had reached reception, staff had come from around the desk to welcome us and addressed us personally. Under interrogation, Jeff Haggert, Group Training Director of Ritz-Carlton Hotels revealed that staff are trained to spot luggage labels quickly for names and via discrete radio links they inform the reception staff and concierge as soon as new guests arrive. Even though our rooms weren’t ready, it wasn’t a bad start to the week!

Mark Rix is Deputy Managing Director of the Manchester Evening News Limited. If you would like more details on the Service Excellence Study Tour Contact: mark.rix@men-news.co.uk Or Tonymosely@aol.com (Chief Executive – Service Excellence Study Tours)

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