values in business matter to customers and employees

Values matter in BUSINESS more than ever as Ikea have found out

In today’s information driven world, how you do business matters as much as the business you do as Ikea the iconic Swedish furniture retailer has just found out. Its green credentials have been dealt a massive blow, as it failure to support sustainability in its products leaves customers questioning its real values as a business.

Ikea only 16% sustainable wood 

Ikea’s failure to achieve its own most modest target of 30% of its wood products to be from certified sustainable wood, will damage it its credibility heavily with its key audiences. The fact that it only hit 16%, has a massive blow on the values it professes as promoting sustainably sourced materials and to its environmental positioning, compared with Homebase (78%) and B&Q (77%), which won the best green award 2010.

The excuse given in its defensive press statement is that it has sacrificed the values of sustainability for rapid growth and protecting its profitability (£2.3billion), but short term greed like this can cost dearly on both growth and profitability over the long term.

Ikea’s staff not telling the truth 

This corporate failure was made worse by staff telling customers in store that its products are from sustainable sources, when they are from illegal logging in places such as Russia. This insatiable drive for growth, which so often undermines trusted names, may damage the Swedish brand’s position as the leader in the flat pack market significantly, as it will now undergo microscopic environmental and customer scrutiny.

Ikea’s soft “long term” aspirational statements on their website with links to the Rainforest Alliance are unlikely to be seen as enough in the modern world where green wash marketing such as this are quickly exposed and penalised. When the spotlight of the green world is turned on, it is difficult to hide in the shade.

The World Bank suddenly in the late 1980’s promoted its ‘green credentials’ by promoting itself as having employed ‘an environmentalist’, to offset its image of chopping down forests for cash crops. This green wash story was quickly exposed when it was pointed out the World Bank employed some 5,000 economists, what difference would/could one environmentalist make?

Values matter in business for leadership

Values must be transparent

The way you provide your product or service and to whom, says more about you than how much business you do. Being big in a highly segmented world is no longer the determination of success. How you do your business now determines your current credibility and future success. Credibility is as much about your values in becoming successful as about the success you have. Mohamed Al-Fayed for example, despite buying Harrods, never shook off questions about his background.

Your values as an organisation as demonstrated by everyone inside your organisation matter to both existing and potential customers in choosing to do business with you. People have choices and they can now exercise them more freely than ever before, and that means customers can access information instantly to make choices that are more informed. Ikea’s staff misinforming undercover Times reporters about their sustainable and certified sourced products at a number of shops are one symptom of Ikea’s rapid growth boardroom culture.

Values Must Live the Moment 

Almost everything in life is in real time and instantly communicated to circles of influence and beyond. A restaurant having  bad night can have a poor reputation before the starter has even been cleared away as customers post live feed back to sites such as Qype or Trip Advisor . Therefore, before the waiter, maitre d’ or chef knows what’s happening the world outside already does by Twitter and Facebook and are cancelling their reservations in their droves.

Why clean lavatories matter?

The old adage that if you want to know how clean the restaurant kitchen is, inspect the lavatories, because they tell you how the restaurant values cleanliness, is a great example of modern customer awareness. Do you live your values or just post them on your website? Is the question customers want to know in establishing and experiencing trust with you and your brand.

Rail companies learning fast

The recent story of the man on the train talking too loudly causing enraged customers to Tweet  complaints about his behaviour which was picked up by a duty manager hundreds of miles away who then contacted staff on the train to track down the loud caller and asked him to quieten down.

This story is very much testimony to the growing demands of customer expectations, immediate online response, not waiting for passing train staff to react. This story is part of the reputation shift that train companies are actively pursuing.

Values are in the detail

Values matter, they define the real differences between companies. How British Airways treats its customers through the values it embeds in its entire organisation is what makes it different to other premium airlines and distinguishes it from them, and from the bucket providers such as Ryanair.

However, as everyone de-layers in response to changing business models, cost and modernisation requirements, values can be lost in the rush to modernise and compete in new ways. BA’s changes to its premium dinner menu, introducing exotic main courses such as crocodile and ostrich sounded good but simultaneously cutting the After Eights, so there was not to go around 1st class passengers was a classic example of getting its values wrong in its customer’s eyes.

Values Must Involve Everyone

If you value your customers then remember everyone needs to smile in their role, if you believe in providing excellent customer service then don’t cut your front of house staff numbers.

Too many companies’ ideas of communicating values are to place a statement on a website, brochure, at reception and on the induction training programme. How many companies look at the strategic advantage of values and embed it into people’s roles, asking staff to define their role by those values by redefining their role to live those values?  How many companies review those values as outcomes in winning and retaining customers?

 

Values as seen by Customers and Employees

Customers, potential and existing, are drowning in choice what makes you stand out to them is the values you own and can demonstrate. Statements on walls and websites always sound good, (possibly, because they are written by marketing people who do not work there) but unless the company lives them then they do more damage than good. Over promising and under delivering is a growing experience for everyone today.

Whether it is a London hotel, stating it’s exclusiveness, as evidenced by its 5 star, pretty pictures on the website of its presidential suite and over the top statements such as “sumptuous 5 star accommodation” the jaw dropping price tag. When you turn up and find a broom cupboard with not enough space to turn around in let alone swing a cat, and you are one of 500+ rooms filled with bus loads of tourist on a package holiday then company values are under pressure.

The same is equally true for staff, why should people stay loyal to you if you don’t live those values and enshrine them in every one of your people. Do they live it or lip service it?

New company’s leadership must create true values 

New companies have the unbridled opportunity to define their values from the start. By building them into their business model throughout the entire process from the beginning, providing value and clarity with every new role and new person, they can use their values to maximum leverage for attracting their chosen customers and staff.

So Googles’ “DO NO HARM” value won many plaudits, breaking down the concern about the is was then rightly questioned by their policy in China of being seen to be supporting censorship (try typing Tienanmen Square Massacre into Google in China it never happened!). Now there is a good argument that rightly says any Google is better than no Google, but the contradiction against their stated values upset many Google Supporters elsewhere in the world.

Your values should come from within. What do you stand for? What does your company do? How should everyone do it? What does excellence look like? Some classic questions to understand the values you offer. I often ask people to think of an animal or car which best describes there organisation

Keeping Values Alive       

Established companies inherit values, often without realising they have them in place, “its how we do it around here” type phrases are often values hidden inside everyday activity. Keeping values alive is often hard in rapidly changing under-pressure environments. Changes in leadership, particularly when cross industry leadership is introduced or when new pressures are introduced from changing ownership for example often end up throwing out the hidden value of a brand in the race to achieve short-term results.

Everyone entering a company, particularly top executives, must understand the core heritage values any organisation has, how they are owned and expressed. The best way to achieve that is for new people to present those values back under peer group review and add to them with the changes they intend to introduce. New products/services need to incorporate core values and learn to demonstrate them in new ways as new channels of communication are opened up.

Values check list 

  1. Are your values visual to your team and customers? 
  2. Does everyone know your core values, have you checked?
  3. Can all your people translate them into their daily role?
  4. Do people see the company values in other people’s roles within the organisation?
  5. Do customers comment on those values in their dealings with your company in formal and informal feedback channels? 

If you can only answer confidently to only points one and two then you are not living your values as a business. If you cannot hand on heart even answer those two them its probably time to look at your values in a lot more detail. Spend time to think through what you and your business stands for and get in touch if you need any assistance in creating values which matter to you.

Leadership Strategy

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Are you on a MISSION or just a dreamer?

One of the most important pieces of any good business plan is to define what you do and where you are going as a business. If you do not define what you do and where you are going then why should people work with you or for you? Defining your purpose as a business is the clearest statement of intent any director or owner of a business can make, and yet one of the most misunderstood and avoided pieces of any business plan. This is the mission statement which everyone in a company should be able to relate to and believe in.

Why is it avoided? In my experience directors are most often frightened of making a commitment of what they stand for so as not to alienate any existing or potential customers who may not fit the proposed mission statement. This contradiction, not wanting to say what the primary goal of a business or organization is, means that many companies try to be everything to everyone, ending up being meaningless to everyone.

Mission Failure

This failure to define a mission is also one of the biggest limitations companies and organizations have in creating clear blue water between them and other players in their market. It is why so many companies struggle to stand out and then expect someone in marketing to try to answer that question sometime later. It is not up to marketing to define the purpose of any business or organization, they must influence it but it takes leadership from the top for a mission statement to be successful.  It may also be why so many companies have to spend so much on marketing to define them.

Mission Statement

A good mission statement is clear, unambiguous, engaging and relevant to all its key audiences: namely its leadership, senior management, employees, shareholders and customers. A mission and a vision (but more of that later) provides a central definition of what a business or organization delivers.

Creating a Successful Mission Statement

Here’s a quick-step guide to creating a mission statement.

  1. First identify your organization’s “strategic advantage” what makes you successful. This is the idea or approach that makes your organization stand out from its competitors; the reason that customers prefer you and not your competitors, what makes you unique, what are your core competencies?
  2. Secondly, identify the key measures of your success. Key success measures by which you can measure, Key Performance Indicators (KPI’s), typically pick 3 to 5 headline measures of performance.
  3. Thirdly combine your strategic advantage and success measures (KPI’s) into tangible and measurable goal.
  4. Define the wording, using clear language, until you have a concise and precise statement of your mission, which expresses your ideas, measures, and desired result.
  5. Now communicate it effectively so everyone owns the mission statement within the company, make it public and ensure it is owned from the top with passion.

Communicating mission statements effectively to everyone is a defining piece of making the mission live. After all the hard work in having one so often they are filed away, or framed and stuck on the wall and forgotten. Instead successful Mission statements are launched to everyone and owned.

I’ve run embedding program within companies to ensure that everyone inside businesses and organizations “own” the Mission and build it into their everyday activity.

If you don’t follow through then all the effort is wasted and the opportunity is lost, so remember to focus on making your mission statement memorable and relevant. The leadership also needs to own the mission statement and make it live throughout the company.

A Mission Creates Loyalty

If you do this businesses and companies can achieve significant improvements which can include: building higher loyalty from staff, higher levels of customer service; improved stakeholder and channel support and lower costs for winning new higher value customers. These are just some examples of the benefits from having and using a mission statement successfully at the front end, one other major advantage is that you have a foundation upon which to build your business plan.

Good Luck: Want to develop your growth plan, use my business planning tool kit, click here to Take the guess work out of your business success   or click this link to learn how to greta your own business strategy:-

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Strategy: The Leader’s Role by Richard Gourlay
Richard Gourlay

 

The power of WHY to consumers

The power of WHY to consumers

Will they BUY?
In the old days people used to buy what companies did, what they made, where they sold it and bought what they promoted. That was the age of big marketing and sales budgets, when big adverts worked, by driving demand through pushing products down channels, offering promotion and celebrity endorsement to generate business.
The age of the Unique Selling Proposition we are special because….. so you will buy! It was the 1980 and 1990’s so the world did as it was told: “we make what you want because we tell you want you want because we know about your needs”.
Honest is essential
Then ethics came into play. As the internet began its infancy, the power of globalisation was laid bare by the internet. people asked more about how companies did things? Where were products sourced and how became important. Why were the premium footballs, such as those which David Beckham kicked, being made by blind children in India for a few rupees. Why were the clothes models wore being made in sweat shops where workers earned less than for a dollar a day?
The internet changed how the media could communicate, explaining how household names operated and could afford those huge marketing budgets. This forced companies to change their practises (not their policies though) by educating and fighting back against the likes of Naomi Wolfs’ No Logo expose for example.
How business operated mattered, and so in response companies upped their awareness of their social impact and visibility through corporate social responsibility. How people did things mattered not just when the likes of Bhopal and Exxon Valdez disasters struck, but in everyday life.
Fair-trade has become a household name in consumer goods, with high street stores vying for credibility of having an ethical policy, supporting local goods and having transparent policies of how they operate. This gives more confidence but leaves companies open to further scrutiny and often to unsatisfactory answers to vital key questions, not at least within developing countries, who are now the fastest growing emerging markets for many brands.
Why! – should I buy from you?
The biggest question which consumers and business now asks people is why businesses are doing these things.  Everyone has become so empowered with information sources that people want to buy the WHY, not the what. Buyers want to understand the ethics of the company and importantly the people behind the decisions it takes. Customers want to know that these decisions accurately reflect the real cultural and values that company has, not just the marketing hype, which the brand portrays. Today this is the real power of the internet.
What’s the real purpose of the company, who and what is driving it and what does it really believe in and stand for. No longer is a small donation to a local charity enough to say it supports the community, customers want to know how much, who gets involved, is it company wide and deep or just a year end tax saving.
What do the decision makers really value, their life story, their values really matter, and how they treat all their people now determines as much if not more in buyers minds than the value the products communicate.
In fact the world has changed completely, confidence comes not from what you say but why you are saying it. The educated and informed world means that its not just politicians who have seen their reputation tarnished but any business in any sector who does not explain it why factor.No matter what sector you are in, understanding the still emerging power of the internet in sustaining your reputation is essential and never more so than in explaining why you are in business and why you matter.