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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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”.  This relied upon trust in a brand by the public, which in a pre-internet world gave the control of information to the brands.

Trust, the intangible combination of character and competence which all successful brands must develop and sustain is mad cup of a whole series of elements itemised below.  The importance of ethics in today’s business are essential characteristics which purchasers expect their brand to portray in all their activities. That makes it a key priority for leaders’ to focus on within their role.

 

Honest is essential

Then ethics came into play, as the age of information came into play in the early years of the new millennium. 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 (and their internal policies) by educating and fighting back against the likes of Naomi Wolfs’ No Logo expose for example.  The brands who recognised that they could no longer hide their activities became more open and honest and developed trust, while those which did not, suffered public shaming and demise.

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.

Ethically; 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. In today’s world the importance of ethics in today’s business cannot be understated for leaders to focus upon in their role.

Ethical Values Being Lived

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 it’s not just politicians who have seen their reputation tarnished but any business in any sector who does not explain it why factor.

It snot just whistle blowers who expose mal-practice in today’s world, everyone is communicating through so many channels, from traditional word of mouth, through social media and beyond into a connected world, where reputations must be transparent. As everyone’s voice matters, being ethically transparent, open and honest is now essential if a brand is to be trusted.

Winning customers is no longer all leaders have to focus on. Finding talented staff, channels partners and customers is now a multifaceted challenge for leaders to deal with. Ethical short-cuts damage brands reputation and those damaging allegations now stick, and become magnified to stakeholders as statements are now online, like a bad trip advisor review, it never goes. A tarnished reputation is exactly that.

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. The importance of ethics in today’s business has never been so important to establish and maintain.

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strategy, leadership and vision in business by Steve Jobs

Values matter in BUSINESS more than ever

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 quieted 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.
The values that a business lives really matter to customers and to the brand reputation. Learn more about strategy and how to build yours in your business, click here or on the book below.
Strategy The Leader's Role By Richard Gourlay
Strategy: The Leader’s Role by Richard Gourlay
Dyson strategy to outcompete the competition

What Makes a Great Brand (Part 2)

Clear Brand Strategy

Being clear and precise is also important in the company’s messages for a brand to succeed, a strong undiluted brand message must enthuse internally but must also consistently connect with customers through touch points, look at Innocent, Dorset Cereals or Apple as classic examples of touch point. They also demonstrate a clear story delivered with passion about who they are what they do and why they matter. This focused and consistent message is not just a marketing message but an ingrained set of values which consumers buy into with passion. These brands not only position themselves as premium players in their fields and earn more but they also continuously find new ways to spread their key messages to customers, they have a clear brand strategy to achieve it.

Everyone Lives the Brand

Another vital aspect of any brand success is that the people within that brand demonstrate what they preach, they live that lifestyle, support that brand and contribute to its success. It is their lifestyle, it is a part of the way they and their brand do business.
 Great brands go beyond the brand to understand its real value to existing customers but also to tomorrow’s customers.  Whether it is a family run local shop or a global supermarket chain great brands position themselves so they develop and hold a market position to develop long-term success.

Great Brands

Great brands also develop their own uniqueness, not just the product or service but the whole package is how we do it around here. There needs to be not only consistency but the brand hand writing and value on how they do it. The best brands always develop singular simple signals for customers, cutting through jargon to create clarity without patronisation.
For brands to succeed in today’s global markets these golden rules have never been more important as consumers have never had so much information, but if you follow these simple rules of brand success you can develop and maintain a great brand.

Looking for Advice 

If you want to develop your company’s brand and are looking for some advice on developing your company, its marketing, its sustainable competitive advantage then contact us at Cowden Consulting to see how we can assist you, or read more about us in this blog or at Cowden Consulting.