Values matter in BUSINESS more than ever before as Ikea have just 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. Ikea’s green credentials have been dealt a massive blow in consumer’s minds. Ikea’s failure to support sustainability in its products leaves customers questioning its real values as a business. Heres, why values matter in BUSINESS more than ever before as Ikea have just found out to their cost! Here’s why you cannot just talk about values, you must live them!
Ikea only uses 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. Compare that 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 in fact 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. This expose means that Ikea will now undergo microscopic environmental and customer scrutiny.
Greenwash Marketing is NOT acceptable
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?
Business 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 a big turnover company in a highly segmented world is no longer the determinator 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. The question of size as measured by turnover raises questions about how you do business.
Real Business Values Recognise Real Carbon Footprints
Too often businesses have slick marketing messages, from slogans and statements, rather than understanding what impact they are making on the world in everything they do, their carbon footprint. As Carbon footprint becomes clearer so businesses must adapt to reducing it throughout their entire impact upon the planet and reflecting that in the values they actually demonstrate.
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 In 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. This is 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.
You can spend as much as you like on your website, Google reviews and trip Advisor comments, but simple first impressions such as the state of lavatories matter more to customers.
Rail companies are 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 in the organisation
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?
Business Values as seen by Employees and Customers
Customers, potential and existing, are drowning in choice. What makes you stand out to them is the values you own and can demonstrate as a business. 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 and live their 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. Here is a simple checklist for business leaders to use to answer honestly and thoroughly about where you are with your business values.
Values Check List
- Are your values visual to your team and customers?
- Does everyone know your core values, have you checked?
- Can all your people translate them into their daily role?
- Do people see the company values in other people’s roles within the organisation?
- 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 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 it’s 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:-
Are you on a MISSION or just a dreamer as a Business Leader?
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 organisation is, means that many company’s 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. Marketing does not define the purpose of any business or organization, they may influence it, but it takes leadership from the top for a mission statement to be successful.
Missions fail if they are not believed in by the employees and customers, or experienced in how an organisation looks to deliver its products and services. They are not just slogan on a wall or a website.
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.
- 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?
- 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.
- Thirdly combine your strategic advantage and success measures (KPI’s) into tangible and measurable goal.
- 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.
- Now communicate the mission statement 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 Focus and 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:-
WHY really matters in influencing consumers buying habits
WHY Customers’ BUY
WHY really matters in influencing consumers buying habits in today markets. Back in the early 1980’s customers used to buy what companies made, went where they sold it ,and bought what they promoted. That was the age of big marketing and sales budgets, when big adverts worked. Driving demand through pushing products down channels, offering promotion and celebrity endorsement to generate business.
By the late 1980’s the age of the Unique Selling Proposition (USP) dominated: we are special because….. so you will buy’! 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 complete control to the brand and the consumer relied on marketing messages coming out.
People buy if they trust the brand they are buying from. In the 1980’s people trusted brands because no-one questioned them. A lack of information coupled with a belief in household names meant that people’s buying decisions were based upon a limited width of information upon which all buying decisions were made.
Today the world has changed. The sources of information have increased dramatically. The transparency required by companies is now at a level of how the organisation operates. Every aspect of what and how a company operates is under total scrutiny from a whole range of pressure and interest groups. Every aspect of ever action is recorded, analysed and evaluated. Business leaders today live in a totally transparent world, and the measures of trust are now very different.
Trust, the intangible combination of character and competence which all successful brands must develop and sustain is mad cup of a whole series of complex elements. The importance of ethics in today’s business is an essential characteristic which purchasers expect their brand to portray in envy aspect of its behaviour. That makes it a key priority for leaders’ to focus on within their role.
Honest is Essential in WHY Consumers Buy.
Ethics came play such an important element of purchase decisions at the same time as the age of information changed what people could find out about a brand. As the internet began its infancy, the power of globalisation was laid bare by the internet. People asked as much about how companies did things as well as what those products did for the buyer?
Where products were sourced, made, shipped and by whom now 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? Honest is now essential not just in how a brand portrays itself but in its complete supply chain, marketing activity and in its contribution to the world it operates within.
A Business Cannot Hide its Activities
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; 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. 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’s not 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 Life-Long Customers Requires Integrity
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 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.
So does WHY still matter. YES more than every before in a global world honesty, transparency and integrity matter in building and retaining trust with consumers more than every before.
Like to learn more, then contact us at Cowden or see our website or social media channels for more about Cowden Consulting:-
Website – Linked in – Twitter – Facebook – Blog
Cowden services: business planning, strategic planning, business development, strategic marketing, Return on Investment, director development, director mentoring.
Cowden works with business leaders throughout the UK to improve their business.