But back to company sickness and assumptions about success.  What does a sick company look like?  Sound Like?  Feel like?  Think about your own working environment.  In a sick company you will find:

1. People are afraid to speak up to leadership.
2. Leadership has made it clear that your differing opinion is insubordinate.  Usually they will deny this but the person with the differing opinion knows better.
3. Leaders sometimes yell at direct reports.
4. There is little or no laughter among colleagues.
5. Changes are always filtered through PR and need to be strategized before anything is done.
6. No one trusts anyone.
7. Time and energy are spent making sure the right people are copied or blind-copied on email in order to cover one’s ass.
8. What is said in public is almost never the same as it is behind closed doors.
9. No one is excited to bring ideas into the company.
10. Most energy is spent trying to figure out how to get people at all levels to be “compliant.”  (My god wouldn’t that suck?  Can you imagine a company full of “compliant” people? What a terrible way to try and build a company!)
11. People really want to go home and are happy to be away from the office on assignments.
12. People do NOT look forward to coming into the office.
13. You make sure your resume is kept up to date.
14. Leaders are leaders in title only.  They are not leaders because others choose to follow them.
15. People do not take responsibility for results.  They spend time generating a lot of activity but no one wants to own the result.  Oh, and you will see a lot of finger-pointing when targets aren’t hit.
16. A lot of employees leave.

I could keep going but you get the picture.  Now let’s assume that a company has just such an environment but is also profitable!  Here is the real issue – Leadership will use profit as the proxy for running a business “right.”  What can’t be seen is whether they are costing the company a lot more profit by running the business in a way that breeds the kind of sickness I describe here.  In other words, just because you are profitable, don’t assume you have the perfect formula.  Perhaps you could be far more profitable if you addressed the pathology that exists within your company.  Responsible leadership doesn’t stop asking questions and self-reflecting on how to get better.  It is never arrogant about success and never stifles voices of opposition.  Responsible leadership is there to serve its constituents and only does so by listening to them and responding to their needs. 

What is it like to work in a company that has the opposite environment?

1. People step-up and want to be accountable.
2. Ideas move fast and are implemented with precision.
3. Actions directly impact results – no excuses.
4. People can’t wait to get to work and sometimes find it hard to leave.
5. There is laughter.
6. There is a constant sense of urgency about the company’s mission.
7. People tell their friends that they should try and get a job there.
8. Leaders listen and are happy to have differing opinions.
9. There is open debate no matter one’s station in the company.
10. The entire organization is involved in a dialogue about how to succeed (in the sick company this is a monologue from the top down)
11. Employees don’t go to other companies very often. 

What would happen if we took the sick but profitable company and could create the environment described in the second scenario?  Does anyone doubt whether it would move them even further ahead?  Does anyone doubt whether this company could innovate and improve continuously? 

The real pathology in the sick but profitable company is the belief that – “it has worked so far.”  I would say; “No it hasn’t.  You are leaving an awful lot of money and growth on the table.” 

Keep you company and your self, well.  Go exercise.

Here is the basic difference; the fixed mindset believes - “I am born with a certain amount of talent.  It is inherent in who I am.  No matter what I do, my success or failure will be determined by that pre-programmed talent.”  This mindset can lead to taking fewer chances, not trying 100% (failure might expose the true talent level), and less overall happiness.  The growth mindset believes – “There is reward in effort.  I can process information, apply it, learn from it and grow. My talent is limited only by my willingness to apply effort in the right fashion.”   This mindset sees set-backs as valuable information for getting better.  This person doesn’t see failure but rather “time spent learning.”  The growth mindset has fewer fears, more willingness to try new things, and greater overall happiness. 

As Dweck writes – “The fixed mindset is like going through life and everyone thinks you are holding a Royal Flush but you only have two pair and you really don’t want anyone to discover it.” 

Here’s a cool kicker – you can change to a growth mindset simply be recognizing the fixed mindset in yourself and deciding to see things differently. 

What about an organization?  How do we see ourselves?  Do we think we are talented and because of that we have such great customer scores?  Do we think that we are just the best at what we do and our way of doing business will maintain us at these high levels?  That sort of feels smug doesn’t it?  These would be examples of a collective fixed mindset.  These statements lack a sense of curiosity and self-reflection.  These statements feel arrogant and closed-minded to me.  These statements have no sense of curiosity.   

What does an organization that has a collective growth mindset do? 

• ·         They focus on ways to get better every day.
• ·         They love the opportunity to turn a negative customer experience into a positive     experience.
• ·         They take what they learn and elevate the thinking of the entire organization. 
• ·         They are excited to discover what they don’t know and apply it to the mission.

They know that there is never time to “rest” and it is urgent that we get better at what we do every single day.  And what is it that we do?  We turn every single member into a loyal lifelong fan and exerciser.  How?  We connect.  We participate in their experience.  We customize every interaction because great hospitality can’t be scripted.  We know that if we have a positive impact on someone’s day that they may in turn have a positive impact on someone else. 

The growth mindset breeds excellence.  It is a hungry, curious, passionate approach to life.  No matter where you are in your life, never think that you can’t get better.  Never stop growing. Always stay passionate. Be excellent.

Don’t forget to train,

Blair

In an economic ecosystem, think of customers as the natural resource and your ability to renew this resource as critical to the long term health of your business.  Are you just consuming the customer base and reducing the resource pool by pissing-off too many people?  Or are you renewing the resource pool by delighting your customers AND former customers?  For the Gold’s Gym brand overall, what a customer thinks about their Gold’s Gym makes a difference in how they will view my Gold’s Gyms, and vice-versa.  Unhappy customers are the pollution that poisons the ecosystem for everyone. 

A common practice for some gyms is to “use up” the natural resource supply to a point where the only thing you can do to grow is find somewhere that yields new resources.  But the pollution just accelerates if we are not good stewards of our natural resource (customers.)  One day you may wake up in a completely polluted environment and realize you have been running an unsustainable business model.   

The customer is the fuel for your business and our brand. Negative attitudes are the pollution that eventually chokes the life-giving resources out of our ecosystem.  Positive, delighted customers are the oxygen of that same ecosystem.  And just as a hyper-supply of negative attitudes pollutes and eventually destroys all of the resources, a hyper-supply of positive customers and former customers cleanses the same ecosystem over time.   We may never have every customer and former customer become a lifelong fan, but it is certainly a worthy goal for every single gym owner in our system.   

What if every individual Gold’s Gym had to pay a “pollution tax” based on the number of bad attitudes produced and received a “tax rebate” based on the number of good attitudes produced?  How would you fare?  The fact is all of us do pay a “pollution tax.”  If your operation is spitting out nothing but exhaust, you are hurting all of us.  If your operation is generating more “oxygen” than exhaust, you are helping all of us. 

The short-sightedness that breeds bad attitudes for immediate profits will eventually be the death of any brand.  Fred Reichheld, author of The Ultimate Question, refers to this as “bad profits.”  If you read that and thought to your self – “all profits are good profits” – you might be just the kind of operator that takes us all down.   

Then he asked - “But what is culture?”  I said – “It is the stories people tell about you and the legends you create.” 

And that really is it.  If you want to know what kind of culture you have, understand what people say when you aren’t in the room.  Understand the stories that circle back to you about how your organization “acts.”  And I don’t mean that you cherry pick the stories to make yourself feel good.  You have to have an open mind and be willing to hear it all.   Think about other businesses that you like to deal with and the stories you tell about them.  That defines their culture.

Most of all it is the stories that employees tell about what happens behind closed doors and under stress.  These are the legends that get passed from person to person.  These are the “campfire stories” that define you and your organization.  These are the outputs of culture.  The stories that are told about Apple or Four Seasons are outputs of their culture.  The stories that are told about Enron or Phillip Morris are the outputs of their culture. 

In sports there are two cultures that I most admire; Vince Lombardi’s Green Bay packers and John Wooden’s UCLA Bruins. The stories told about both of these men and the cultures they created are all about team, respect, and accountability.  Are there any other coaches in history that have as many respectful and awe-inspiring stories told about them?  I doubt it.  Are the stories told about you and/or your company respectful and awe-inspiring?  Both of these coaches’ winning records were a result of the cultures they enabled.  

Listen to the men who played for them.  Listen to the stories their opponents tell about them.  Think of what you (and I) need to do in order to create culture where those stories are the norm and not the exception.  Start doing that stuff today and then never stop. 

What we do not write in specific detail, are the things that can't be "known."  What we can know, we make it a point to codify.  For example, there is no need to reinvent how to answer and transfer phone calls. The mechanics of doing so are easy to write in detail and therefore teach.  But what can't be known is how each and every member "feels" when coming into our gyms (or calling) and what each interaction should be like.  How to handle each situation can't be codified since it can't be "known."  BUT.... We do know our intention in dealing with every member and that CAN be codified and taught!  

This is where most people fail in directing, managing, and leading an organization that can be flexible and not be taken down a path to destruction based on the "opinions" of the owners or leaders.  I see way too many people that believe they can codify and teach to the unknown.  They attempt to script their staff for all possible scenarios as though they have some crystal ball which allows them to "see" into everything that a front line worker will come across.  It is so much more effective to keep your directives crystal clear, but keep them directional! It is also important to keep your directives simple and based on your most important intent.

I recently read "The Art of Action: How Leaders Close the Gaps Between Plans, Actions, and Results."  A well-written book by Stephen Bungay which finally helped me reconcile my own propensity to alternate between broad but exploit directives and detailed and meticulous processes.  It was simple and wonderfully confirming.  We have always tended to give direction to what we know, not what we don't know and that means that some things can't be detailed. 

We CAN be explicitly detailed when teaching our vision, mission, values and strategy to our employees.  We CAN be explicitly detailed in our "Standard Operating Procedures" manual.  After all, if I have to clean up blood with bleach, I should be able to write down exactly how to do that. 

It is in the vast expanse of "daily operations" that we cannot be explicitly detailed.  We don't know what will come at us and we need to have great people making great decisions based on their intelligence, experience, and our intentions to make our customers happy and get them to love us.

Our employees have the brains, heart, and autonomy to make that happen.  Their brains are filled with our vision, mission, values and core purpose.  Moreover, they are clear about their responsibility for fulfilling that purpose based on their role with us. Their hearts are caring and compassionate.  Combine those with the freedom to choose and the knowledge that we will stand behind them and you create an engaged and powerful workforce.   

First of all, this was a fun conversation with a customer that wants us to succeed and has our best interests at heart.  But even if he didn’t I would have listened and we would have done our best to accommodate any request for change.  That’s when it hit me….this is open-source management.  Like open source software that allows users and programmers to make improvements that make the software better, we simply follow and open-source management model.  Just like the software, there are limits to what changes are allowed, you don’t get to turn financial software into a video game for example, but you do get to make improvements to the software based on the core purpose for which it was launched in the first place.

That is ultimately what one does when your business model is based on employee engagement and customer happiness.  You stay squarely aligned with your core purpose but you tweak everything in an effort to create constant improvements and you base those changes on what your customers want.  The nuance here is that you must remain focused on the core purpose and vision for your business.  As the “open source manager” you get to decide whether a customer request for a roller coaster in the parking lot makes sense based on your purpose and vision.  On the other hand, most customer requests and complaints do have relevance when you do root cause analysis. 

Your physical plant and equipment is the hardware.  Your management systems are the software.  The information about how well your software is running and whether your hardware needs updating comes from the stream of consciousness of your customers and staff.   

Open source managers DO NOT:

1. Isolate decision making
2. Argue away customer complaints
3. Ignore trends with competitors and the market
4. Separate themselves from the voice of the customer 

Open source managers DO:

1. See the real person behind every comment and complaint
2. Know that the complaint is a result and that there will always be an underlying symptom and beneath that a root cause
3. Listen to, talk to, and respond to as many customers as they can (even if your company is huge)
4. Know that every complaint is a gift and an opportunity to shape your own future

By the way, the more trivial the complaint the better.  If all you get are trivial complaints, then chances are you are meeting all of the customers’ greater needs.  At some point I hope all my customers can complain about is the color of the walls….and then I will paint. 

Blair

1. The result

2. The underlying symptom

3. The root cause

In a discussion about "continuous improvement" and addressing customer concerns by constantly changing to meet new needs, I was asked - "Don't you create a very negative environment when you are constantly telling your people that they need to do better?"  The answer is "yes" if that is what you're doing.  But if you really do root cause analysis, that isn't what you do and it isn't seen as negative.

For example, let's say that a resulting member experience is that members think your personal training staff is aloof and even arrogant.  That is a result.  The underlying symptom is that personal trainers are probably not engaging people outside their immediate client.  To non-paying members they seem aloof.  Some might see the behavior as the root cause.  But it isn't.  It is a symptom of how you hire, set expectations, manage the department, set examples, and create a culture of caring. 

If you only address the result (tell the member you're sorry for the PT departments lack of engagement with non-clients) then you haven't addressed the real issue.

If you go to your trainers and tell tell them (or show them) the complaints about and tell them you need them to be more friendly, you will get push-back.  You may appear to be badgering (if you keep managing this way) and it will be a never-ending battle.  This is because you are addressing the symptom. 

But if you address the root cause by asking yourself the questions -

• Have I set the right expectations?
• Are we hiring the right people?
• Are we training them well enough on customer service and hospitality? 
• Have we trained and developed the leader of this department to match our strategy?

If you set detailed expectations, adopt a more stringent hiring process, systemitize customer-service training, and coach the leader of the department to look for, and expect hospitality from the trainers, you will have addressed the root cause, you will have supported (rather than badgered) your staff, and you have just taken steps to change the entire culture to be more customer-centric.  

One last thing, your customers experience will never be greater than your employees experience.  Always remember that!  The customer experience is equal to or less than the employee experience! 

Blair

Businesses that are heavy on policy and procedure give front line staff the “script” and the very narrow   designed to take away their options in dealing with customers.  This is done because management is afraid of what decisions would be made if they didn't provide all of the answers to the market-facing staff in advance.  The more policies and procedures you implement the fewer the front line choices for addressing customer issues which have a direct effect on the customer experience.   The fewer "executive decisions" made by your front line, the less responsibility they have for the customer experience.  THEY CAN'T BE RESPONSIBLE FOR THE OUTCOME IF THEY DON'T HAVE THE FREEDOM (authority) TO ACT. Sooner or later ownership has to come to terms with the fact that the mediocre or poor customer experience is being driven by their own love for policies and procedures.   Or in the reverse, their own fears that they can't hire, train, and retain people that can make more creative and customer-centric decisions on their own

There is a big differnece between the responsibilities of a free society and a dictatorship. 

We are in the business of helping people find the strength to begin, or to keep, exercising and become more fit in order to enjoy their life to the fullest and to influence others to do the same. 

But how do you make that actionable for each person in your company?  Once you define the core purpose of your company, start defining the core purpose of each functional department in alignment with the company core purpose.  Given our stated purpose, our front desk has its own "core purpose statement" - To be hosts, hostesses, and providers of information.  To welcome all to our gyms and to make them feel like they must return."  You will notice that this does not say "guard" or "policemen" or "gatekeeper." 

Once you have a purpose statement for each functional department, you can break it down into training modules.  For instance, think of what a host or hostess does.  How would you train someone to be a host?  You would work on how they greet people and how they engage them.  Good hosts and hostesses make it a point to introduce people to one another.  Especially people with mutual interests.  Imagine your front desk running where it seems like your people are hosting the members, not checking people in and being gate keepers.  Of course the basics of checking members in still exists but it is in a different context once they learn to be hosts and hostesses.  Our statement also says that they are "providers of information."  It is easy to make a list of the information that we want them to provide and then give them creative ways to learn about the items on the list. 

What about your marketing?  "To engage the public's interest in our company and to begin the conversation that will create new prospects while building our brand."   What about for advertising specifically?  "To convert citizens into leads without deteriorating our brand."   My point is that you can create core purpose statements for every function in your company and begin training against that statement. 

I would challenge you to do this with every role in your company.  Then take the next step after the functional purpose statement and define the job descriptions in a way that is crystal clear in it's responsibilities for fulfilling the core purpose statement.    

Our front desk staffs' job description has a primary responsibility which ties closely to their purpose statement about hosting.  Their secondary responsibilities have to do with product knowledge.

Be sure that you focus on the RESPONSIBILITIES rather than the duties.   The difference?  Responsibilities focus on a result and the duties focus on the actions.  Start defining the actions that you want and you will end up with job descriptions that look like the Dead Sea Scrolls.  For example, if my front desk staff job description says they are responsible for "making every member feel comfortable and welcome and for the accuracy of all transactions at point of sale" then I can teach the duties but measure performance against the responsibilities.  Besides, I want them to come up with new ways of achieving the responsibility without being bound by a codified list of intricate duties.

I am focusing on the fitness business here but the exercise applies to any business.  These are the details that create employee engagement!  It is only through employee engagement that you will be able to create great customer experiences! 

Brands are kind of funny.  In my world of Gold’s Gym, the brand evokes a lot of emotion for those of us that have been around it a long time and love the heritage.  In our home here in Central Washington, Gold’s Gym has become a very strong brand with high awareness and a good deal of relationship capital with our community.   Not because we set out to create relationship capital but because we focus on just being who we are….and we have a very clear idea of who we are.  All the work that goes into building our brand in the Wenatchee Valley rolls up to build greater brand equity overall for Gold’s Gym; that is, as long as we do right by people and continue to do a good job.  If we decide to operate differently, in a more mercenary fashion, it would begin to burn-up relationship capital with customers and community and we would erode and devalue our brand locally and the brand overall. 

My point is this; the brand is the balance of every interaction on the most micro-level.  It is what happens at Gold’s Gym Wenatchee, Gold’s Gym LA, and Gold’s Gym Paramus that will dictate whether the Gold’s Gym brand is well known for good things on a global level.   Deeper still, is what happens between each of our individual employees and each member that will dictate whether each of our gyms is well-known for good things on a local level.

Deeper?   As each of your employees becomes more and more well-known (they ARE a brand themselves), it is how they are seen by others in your community that will improve or tarnish your brand. 

But employees that are not engaged may not see themselves as a brand.  Yet all one has to do is wear a name tag and be in front of people and you are a brand; good or bad. Are you Enron or Apple?  And if have no control over the behavior defining your brand, what do you do? If the franchisor has no control over franchisee behavior defining the brand globally, what do they do?  How does one best ensure that the right things are done to build the brand in a good light?

You start by recognizing that you can’t control all the behaviors.  Control is not possible because people are free to act how they wish.  It is your responsibility to create an environment that leverages that freedom.   To create the right conditions to attract and retain the kind of people who relish the freedom to do the right thing.  Great people, no matter the age, will not be attracted to work in an authoritarian, over-controlling environment.   You will think you are controlling their behavior by some administrative measure like filling out paperwork or doing their walk-through of the locker rooms in a timely fashion.   But by the greater measure (the customer opinion) you will never reach high levels of satisfaction. 

Think of each individual employee as sub-brand of your business. Are the Enron, Apple, or somewhere in between?  If you have 10 Apples, 10 Enrons, and 10 GMs working your front lines, what kind of a brand are you building?

If the front line individual can provide no solutions to problems then YOU can provide no solutions.  If that person is not enthusiastic then YOU are not enthusiastic.  If they are not friendly then YOU are not friendly.  The details of helping each individual in your business become a brand unto themselves is exactly what takes mediocre service and turns it into excellent service layered with hospitality. 

Engaging your employees around crystal clear purpose, values, and outcome expectations will allow them to use their own intellect to deliver on your brand promise.  The role of leaderships it help every individual become a trusted brand themselves.