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

Learn more about strategy and leadership and how as a leader to create your strategy, with all the steps to build your own strategy, click here to buy the book now:-

Strategy The Leader's Role By Richard Gourlay
Strategy: The Leader’s Role by Richard Gourlay, a book fo how you can create your business strategy, with all the tools a business leader needs to build their business strategy.
Strategy the leader's role book by Richard Gourlay

Do you have a vision or are you just a dreamer?

No matter how big or small your business is without a clear vision of where you are going owners and directors often fall into the classic trap of just managing from day-to-day. A business needs great leadership, and for that they need to create a clear business vision, which will make and deliver longterm leadership success.

Envisioning the Future

Leadership is about investing time, envisioning the future and effort to see into the future and imagine how things could be, is as important for success as having real passion for the business and the determination to create something new. These three personal qualities of leaders are vital for successful companies and a vision statement, sometimes called “a picture of your company in the future”, but it’s so much more than that.

Vision Statement

Your vision statement is your inspiration, the framework for all your strategic planning. A vision statement may apply to an entire company or to a single division within that company.

The vision statement answers the question, “Where do we want to go?” What you are doing when creating a vision statement is articulating your dreams and hopes for your business. It reminds you of what you are trying to build. A vision statement is for you and the other members of your company, not just for your customers or clients.

Visionary goals should be longer term and more challenging than strategic goals. Collins and Porras describe these lofty objectives as “Big, Hairy, Audacious Goals.” These goals should be challenging enough so that people nearly gasp when they learn of them and realize the effort that will be required to reach them.

Most visionary goals fall into one of the following five categories:

  1. Targeted – quantitative or qualitative goals such as Nike: “To bring inspiration and innovation to every athlete in the world” “If you have a body, you are an athlete.”
  2. Common enemy – focused on overtaking a specific firm, becoming the number one in that sector, such as Amazon: “Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.”
  3. Role model – to become like another in a different industry or market, the mirror role, Victoria Beckham (Posh Spice) “Right from the beginning, I said I wanted to be more famous than Persil Automatic”.
  4. Internal transformation – creating internal vision, GE set the goal of “Becoming number one or number two in every market it serves”

While visionary goals may require significant stretching to achieve, many visionary companies have succeeded in reaching them. Once such a goal is achieved, it needs to be replaced; otherwise, it is unlikely that the organization will continue to be successful. The second most dangerous place for a company is to have achieved its only goal, the most dangerous place is never to have had one.

Creating Your Business Vision

Simple steps to creating your vision, ask some simple questions:

  • What will our business look like in 3 to 5 years from now?
  • What new things do we intend to pursue and how?
  • What future customer needs do we want to satisfy?

Write the answers down and focus on developing them into a coherent, motivational and purposeful message which can connect with everyone.

Then Question:

  • Does our vision statement provide a powerful picture of what our business will look like in 3 to 5 years from now?
  • Is your vision statement a picture of your company’s future, which everyone can interpret into their role?
  • Does it clarify the business activities to pursue, the desired market position and capabilities you will need

If your statement answers these questions then you have a vision worth owning and sharing. A vision must be motivational to everyone inside an organisation.

The classic apocryphal story to demonstrate the effectiveness of great visions is about the time President Kennedy visited NASA. During one trip he came across a cleaner sweeping the warehouse floor, and asked him what his job at NASA was. The cleaner replied “My Job is to put a man on the moon, Sir.”

Now I don’t know if the story is true, but it’s inspiring. In a facility full of high-powered individuals and great minds, even the cleaner was completely on board with the strategy. While you may not be planning to put a person on the moon, we can learn a lot from the story. It may sound ridiculous, but every business needs to be a little like NASA.

Great visions can create an unstoppable company

Every organisation needs to have a clear vision, owned by everyone inside and outside it. An owned and shared vision creates and sustains great morale and internal strength for companies, which can become a powerful and unstoppable force in any market no matter how competitive.

At Cowden Consulting we focus on ensuring companies can successfully compete in their chosen or desired market.

Like to learn more then get in touch with at Cowden Consulting.

 

Strategy the leader's role book by Richard Gourlay

Richard Gourlay picture, of management consultant, strategist and author,

Success in Business: Starts with the END in mind

Here’s a simple question to ask any business owner, why are you in business? The answer to such a simple question can be very enlightening. The flippant answer is to make money: an honest, if not inspiring answer; but there is a fundamental flaw in that statement which many business owners fails to comprehend. They start a business, typically through experience in, or a passion in the field or because they have seen an opportunity to make money, but fail to achieve that ultimate goal because they fail to plan their exit strategy.  Planning your exit strategy is the hidden key to business success.

Start with the END in Mind Strategy

Most business owners focus solely on profitability as their key measure of success. Yet making a profit from a business is more than just yearly profitability. It is also about building a business which is an asset that your target buyer is looking to buy. If you can’t get out making the money you intended to when you sell up, then why did you set up the business in the first place?

You have a great idea, you work on it, and spend your energy (and life) building it until it becomes you.  It succeeds, and you enjoy the lifestyle it brings then the challenge of maximising that income to free yourself up and retire or do something else with your success.  That final stage often becomes impossible because you are the business and it is you, its lifeblood, main cheerleader and driving engine.

This typical scenario of being a business owner, is driven by the passion to run the business day-to-day overshadowing the failure to plan your exit strategy from the start. That is building a business with a clear objective to enable the owner to get out and maximising their income from what they have achieved. Nearly all business owners focus on building a successful business, but not on making sure they maximise their returns from the successful ownership of the business.

#business #planning #errors and how to #plan your #busienss #successfully by Richard Gourlay
Business planning is vital for successful exit from a business.

Exit Strategy

The real payback from all that hard work in creating and setting up a business for an entrepreneur is the final payback, the exit payoff.   It is the value creation in within the business, the shareholder value being realised by a sale of that business, which makes al the hard work worth it.  Few owners think about realising their shareholder value. Most being more interested in the Profit and Loss than the Balance Sheet when making key decisions about the business. That approach is effectively summarised in the phrase;

the turnover is vanity,

profit is sanity and

cash is king,

A great motto in the running of any business, but it does not hold true in achieving a successful exit strategy success, as a business owner. I would add to that classic phrase;

success is true shareholder value

Achieving shareholder success is the key motto to follow if you want to have a saleable asset, that reflects the true value of your business when you decide to sell u and move on. Owners need to focus of developing an exit strategy which achieve their personal goals.  While profit and cash rule the day, building a valuable asset requires building shareholder value, through building sustainable long-term profitability. Building the business assets, the real shareholder value, needs to include strategies around Intellectual Property (IP), long term profitable contracts, strategic relationships and operational excellence that maximise the company’s value to targeted purchasers.

Successful Business Planning

Success in business requires owners to build a business which you own, but one you are not concreted into the foundations of its success. Building a forward strategy for your business is a vital first step in building your exit strategy, it is the old adage that you need to work on it not in it which underpins all successful entrepreneurs.  Building the forward strategy to exit, is therefore different that just building a successful business. Planning from start to exit, means focusing on the exit strategy requirement of increasing shareholder value which is recognised as valuable assets by target buyer audiences.

Short-term profitability is always an important goal, but long-term share value is a strategic consideration which owners need to consider in building the value of their business. If you would like to discuss this article further or further information about our services in working with business owners in achieving  successful exit strategies then contact us at enquiries@cowdenconsulting.com or see our contact page for further options.