Creating a Company Culture That Encourages Outstanding Customer Service
I go to In-N-Out Burger a lot. The law of averages suggests I should have had a bad experience at least once by now. Some visits have been better than others, but I’ve never had a bad experience. Not one.
I’m not alone in my admiration of In-N-Out. It’s consistently ranked among the top fast-food chains in customer satisfaction.1 The chain has locations in only a handful of states, but people all over the country and even outside the United States have become fans, with some devoted followers even planning a business trip or vacation itinerary around a visit to an In-N-Out establishment.
What’s the secret to In-N-Out’s success? It may be easier to understand if you compare the chain to a similar restaurant that struggles with customer service: McDonald’s.2
The two have a lot in common. While McDonald’s has a more diverse menu, both chains are fundamentally fast-food burger joints. Both were founded in Southern California in 1948. Many fast-food service concepts in use today originated at either In-N-Out or McDonald’s. The two companies even use the same three words as a foundation of their operating principles: quality, service, and cleanliness.3
So why is the customer service experience at these two restaurants so different? In a word: culture. Culture defines everything these organizations do when it comes to customer service.
In-N-Out founder Harry Snyder made sure the principles of “quality, cleanliness, and service” were more than just platitudes. He instilled them in everything the company did—and these principles are still present in everything In-N-Out does today. The food is fresh, not frozen. The stores are clean, even during busy times. Employees are friendly and well-trained. In-N-Out has maintained remarkable consistency by steadfastly refusing to franchise its stores and resisting the urge to expand too quickly.
Culture also shapes many other business practices, such as hiring. In-N-Out’s management believes a high-caliber employee is necessary to provide the service and quality that customers expect. In-N-Out offers better wages and working conditions than its competitors, which contributes to one of the lowest employee turnover rates in the fast-food industry.4
When Ray Kroc purchased the McDonald’s concept from the McDonald brothers, he focused on rapidly expanding the business. The words quality, service, and cleanliness were clearly less important than a growth strategy based on volume, cost control, and franchising. For example, McDonald’s frozen burger patties are cooked using a special clamshell grill that cooks both sides of the patty at the same time. This is a remarkably fast and inexpensive way to cook burgers, but it may also be why McDonald’s finished last in the 2010 Consumer Reports fast-food burger rankings.5 (Yes, In-N-Out was rated number one.)
While franchising allowed McDonald’s to grow into a global giant, it also made it difficult for the company to control the quality of service delivered at its restaurants. Today, approximately 80 percent of restaurants are run by franchisees and only 20 percent are corporate run by McDonald’s,6 which means the service that customers receive from most of its establishments is determined by the management skills and customer service philosophy of an independent franchise owner rather than by the McDonald’s organization.
Of course, there are exceptions to every rule. Culture isn’t exclusively defined by an entire organization. Even at McDonald’s, restaurants with managers who are good at engaging employees and motivating them to deliver outstanding service typically bring in 10 percent more revenue per year than the average.7
In this chapter, we’ll see how employees are influenced to conform to the organizational culture by their supervisor and their coworkers. We’ll explore how company culture is ultimately a product of our actions rather than a catchy slogan or a set of corporate values. Along the way, we’ll examine how a strong culture can be a major obstacle to outstanding customer service or a powerful force that lifts organizations to the ranks of the customer service elite.
Social Pressure Influences Behavior
Look at the pictures below. Which line (A, B, or C) is the same length as the one on the far left?
Psychologist Solomon Asch used cards with lines like these to conduct an experiment back in 1951. Subjects were told it was a visual acuity test, but it was really an experiment to see if people would conform to social pressure. In the experiment, a subject was placed in a room with several other people and asked to identify the matching line in a series of tests like this one. Unbeknownst to the subject, the other people in the room were actually Asch’s assistants and had been instructed to give wrong answers.8
The subject was seated so that he’d be one of the last to respond. All of the participants gave their answers out loud, so each person could hear what the others had said. When the assistants all answered incorrectly, the subject also gave the wrong answer 36.8 percent of the time. Some subjects were more independent than others, but nearly 75 percent of them answered incorrectly at least once during the series of tests.9
Why did so many people give the wrong answer? Most subjects reported experiencing a conflict between what their eyes told them was the correct response and their desire to avoid contradicting the group. When debriefed after the experiment, the subjects provided a variety of rationales from “I am wrong, they are right” to “I didn’t want to spoil the results of your experiment.”
(The correct answer—as you probably identified—is C.)
Asch’s experiment revealed that people tend to change their beliefs and actions out of a desire to conform to the norms of a larger group. In a customer service setting, these group norms are an important part of the company culture. Therefore, if the negative influence of the company culture is strong enough, an employee might knowingly provide poor customer service.
Here’s a real-life example. Camille was a guest service associate in a hotel that struggled to serve its customers. She had the natural instincts to be good at customer service but found herself increasingly frustrated by her coworkers’ apathetic attitudes toward guests. She soon found herself falling in line and delivering poor service herself. Giving less than her all in customer service situations bothered Camille, but her desire to avoid the discomfort of standing out from her coworkers was a stronger influence.
Camille eventually left this position to work as a guest-service associate in another hotel. Unlike at her last job, this hotel had a culture that valued customer service. Camille found encouragement through her coworkers, who all seemed to care deeply about doing their best to make guests happy. She felt relieved that she could use her customer service skills without feeling like an outcast among her peers.
Organizational or group culture can even influence our behavior when we’re not aware of it. In a 1935 experiment, psychologist Muzafer Sherif placed subjects in a darkened room and then turned on a tiny light at the far end of the room. In this situation, a phenomenon called the autokinetic effect causes us to perceive that the light is moving even though it’s not. Subjects in the experiment, all unaware of the autokinetic effect, were asked to estimate how far the light moved.
Some subjects were placed in the room by themselves, and their estimates ranged from one-quarter to fifteen inches. Other subjects were seated in the room with two additional participants and asked to give their estimates aloud. This time, the group’s estimates quickly converged to a group norm.
Sherif made two interesting discoveries about the groups in this experiment. First, most of the participants were unaware that the other members of the group had any influence on their perception of how far the light moved. They simply believed they were all giving reasonably accurate readings. Second, while there was consensus within the groups, the estimates varied widely between different groups.
These findings show that group norms readily influence our perceptions, yet how we’re influenced depends on the dynamics of the particular group.10 In a customer service setting, employees may not realize they are delivering mediocre or even poor service if they work in an environment where that is the norm. It may require moving to a new organization to realize there are other ways to serve.
Leslie manages an apartment community for a company that actively promotes a customer-focused culture. She often struggles to help new maintenance workers master the high level of customer service expected of all employees. Many of them come from other apartment communities where customer service was not a priority for this position.
Eventually, new employees begin to embrace customer service as a part of their job. They learn to prioritize repairs so that residents experience the least amount of inconvenience. The employees realize they are expected to engage residents in the community and provide them with assistance rather than simply pass them off to someone who works in the leasing office. Over time, they discover that they are expected to contribute ideas that will improve service.
Invariably, these employees give Leslie the same explanation for why customer service was so hard for them to master: “Every apartment community says service is important, but now I know that here you really mean it!”
Camille’s and Leslie’s experiences suggest that most employees aren’t inherently good or bad at customer service. Their performance in any particular job can be hugely influenced by the culture that surrounds them. Lousy service might simply be a product of social pressure that encourages employees to treat customers poorly.
Negative social pressure often comes directly from supervisors. Not long ago, I noticed a declining service level at one of my favorite bakeries. The reason became clear when I heard the supervisor loudly chastising her employees for a missed order. As a customer, I was uncomfortable witnessing this tirade; I can only imagine how the employees felt as they were dressed down in front of several customers. There wasn’t a smile to be seen on their faces as they went back to work.
This supervisor’s rude approach created a great deal of negative pressure that caused her employees to perform poorly. They were clearly tentative in an effort to avoid her continued wrath, which made them less proactive and actually caused them to work slower. Her embarrassing public admonishment sent the message that it was okay to behave rudely in front of customers, and her employees quickly adopted a sullen attitude that was devoid of any enthusiasm.
Of course, negative social pressure can also come from coworkers. I once facilitated a workshop where the two most experienced employees were also the loudest detractors. Nothing I suggested met with their approval, and their negative outlook suppressed the other participants’ willingness to participate in the training. Their supervisor was also attending the training, but he was too meek to stand up to these two curmudgeonly gentlemen.
We finally took a break to clear the air. When it was time to return, everyone made it back on time except for the two negative employees. The supervisor hesitantly asked the group members if they thought we should wait until they returned before restarting the class and was answered with a loud chorus of “No!” The rest of the class featured lively discussions and enthusiastic participation, and I breathed a sigh of relief when my two detractors never materialized.
Companies must simultaneously create positive social pressure while removing negative influences if they want their employees to provide outstanding service. Some of these solutions were covered in previous chapters, but here is a brief summary:
• Make time to catch employees providing good service and recognize their performance so that those employees will be likely to repeat it (see Chapter 3).
• Avoid policies that may anger customers and cause them to pressure your employees to perform poorly (see Chapter 4).
• Fix operational issues that contribute to customer service failures and frustrate employees (Chapter 5).
Another important way to create positive social pressure is for supervisors to act as role models for their employees. My first boss, Christie, was a master at reinforcing a positive customer service culture at the retail clothing store where I worked in high school. She spent a lot of time on the sales floor demonstrating the right way to treat customers through her own terrific example. She’d frequently spot associates doing something great and praise them for their efforts. Christie was also quick to get someone back on track if he didn’t provide great service, though this didn’t happen very often. She would even thank her employees for a great job at the end of each shift.
Christie’s strong and consistent presence made it difficult for anyone to provide anything less than outstanding customer service. I always felt that I’d be letting her and my coworkers down if I didn’t provide the best customer service I possibly could. The pressure to conform—in a good way—was always there.
One of the most difficult challenges for any supervisor is working with persistently negative employees. Left unchecked, they will attempt to spread their negative outlook to other people on the team. A supervisor must act decisively with these employees to help them adopt a more positive approach to customer service or remove them from the team.
A typical approach to managing employee performance is to pinpoint undesirable behaviors or results and get the employee to make a change. Consistently negative employees can be a real challenge to manage because gaining their agreement on what constitutes a bad attitude is usually difficult. Progressive discipline is also difficult to use in these situations because supervisors are often required to provide specific facts and examples when disciplining an employee.
When I was a young and inexperienced supervisor, I once sat down to counsel a veteran employee about her poor attitude. She responded by simply saying, “I don’t have a bad attitude.” I tried to back up my assertion with examples, but she countered each one by pointing out that she didn’t believe she was being negative in those situations. I quickly realized I was over my head in this encounter.
Fortunately, I had access to a good mentor who was able to help me regroup and think about why I thought this employee had a bad attitude. My mentor encouraged me to look for objective data that was hard to refute. One of the key facts that emerged was that I had received five separate complaints from other department leaders who described my employee as difficult to work with.
I approached my employee once again and this time focused on the complaints. She didn’t have to agree with her colleagues’ impressions of her, I said, but it was important that she take steps to ensure the complaints didn’t continue. Taking a more positive tone this time, I said I wanted to see her succeed and offered to brainstorm ways she might convince people in other departments that she was easy to work with.
The second conversation went very well. The feedback was a little difficult to take, but it was factual and, more important, actionable. My negative employee agreed to make changes, and over the course of the next few weeks, she succeeded in changing quite a few people’s minds about her. Over time, she became a reliable employee who could work well with other departments.
Unfortunately, some employees simply refuse to change. In that case, customer service leaders need to act decisively to remove those individuals from the team. Losing a disgruntled employee can be like a breath of fresh air and reinvigorate the rest of the team. On the other hand, letting a negative employee stay too long can cause others to yield to that person’s influence, with the team in general losing respect for the supervisor’s authority.
Jim Collins investigated the traits of enduring companies in his book Built to Last. Companies that succeeded over a long period of time, he discovered, built “cult-like” cultures. Their culture was deliberately ingrained in everything they did and continually reinforced at all levels of the organization.11
When you look at the companies most admired for their customer service, you’ll discover that every one of them has a clearly defined culture that focuses everyone in the organization on serving customers. Many of these companies are profiled in books and magazine articles. Some, like Disney, share their culture-building secrets through corporate training programs.
If a customer-focused culture is so important, and information on how to create one is so widely available, why don’t more companies have one? The short answer is that creating a customer-focused culture takes real dedication. Companies that just go through the motions tend to fall short.
Some companies hire ad agencies to develop clever marketing messages that highlight outstanding customer experiences. Defunct electronics retailer Circuit City was once famous for its slogan, “Welcome to Circuit City, where service is state of the art.” But service was definitely not state of the art when Circuit City filed for bankruptcy in 2008. That year, its customer service was ranked second to last for specialty retail stores by the American Customer Satisfaction Index.12 Ironically, Circuit City’s undoing was related to strategic decisions made over many years that resulted in poor customer service. For example, the company implemented a 15 percent restocking fee on returned products. The decision to impose this fee stemmed from a belief that many customers wanted to buy items, use them, and then return them for a refund. But the fee was widely criticized and even underwent legal scrutiny.13 In another highly publicized example, Circuit City fired thousands of its most experienced and knowledgeable retail associates and replaced them with less-expensive (and less-experienced) employees. This decision saved the company some money in the short term, but it also sent the message that the company regarded employees as commodities rather than a source of competitive advantage. Clearly, the customer didn’t come first when making this move.14
Some companies think it’s enough to create lofty customer service platitudes at executive retreats. One company spent a great deal of time and money creating a set of five customer service values that it rolled out to all employees. The company hired me to determine how well the employees understood the new values.
I started by surveying employees throughout the company to test their recollection of the customer service values. A huge majority (95 percent) of the employees could recite all five values from memory. The remaining 5 percent got four out of five correct. So far, so good.
Next, I asked employees to tell me what the values meant. Here, there was near-universal disagreement. Even the CEO, the CFO, and the vice president of operations had different definitions! They’d spent so much time coming up with the perfect words that they hadn’t stopped to ensure they all understood the same meaning.
Finally, I asked employees how the five customer service values influenced their daily activities. Quite a few believed the service values were a slogan that didn’t reflect their true culture. Even more disturbing was a widespread belief that the company’s executives failed to consistently align their own decisions and actions with the values. The feeling among many employees was, “Our CEO doesn’t really believe in these customer service values, so why should I?”
Some companies have tried to institutionalize a customer-focused culture by including it in formal training programs or an orientation video. This is an admirable step, but two factors can quickly cancel it out if there’s no real commitment.
First, the institutional culture message is often delivered by someone other than an employee’s direct supervisor. New hires learn about company culture in new employee orientation, during a special training class delivered by a corporate trainer, or perhaps they are shown a slick video created by the marketing department. However, the employee’s supervisor needs to understand and believe in the company culture, too. If the supervisor doesn’t model the same message, the employee will almost always follow the supervisor’s lead, since the boss has direct control over the employee’s performance.
Second, most of what employees learn does not come from formal training. The American Society for Training and Development (ASTD) estimates that 70 percent or more of workplace learning is informal.15 This informal learning includes on-the-job training, sharing with coworkers, taking direction from supervisors, reading policies and procedures, and learning from experience. If there’s a conflict between the cultural message delivered in formal training and the cultural message learned informally, the latter will almost always win.
Developing a strong customer-focused culture requires an ongoing commitment and dedication, but organizations repeatedly try to find shortcuts that ultimately result in failure. They hold team-building events or hire someone like me to deliver a motivational speech to get everyone fired up about service. Unfortunately, these high-energy events often represent the extent of the initiative.
A client of mine once hired me to deliver a keynote address on creating a customer service culture. My presentation was part of a four-day leadership conference where the focus was using customer service to set the company apart from the competition and drive sales. By the time I took the stage the energy from the group of leaders was unbelievable. They cheered and applauded each other. Whenever someone gave the signal, everyone would stand and loudly chant the new customer service principles. It was as if they were at a giant pep rally before a big game. They even had noisemakers and confetti to throw around the room that contributed to the festive atmosphere.
Inevitably, these leaders had to come back down to earth after their conference. When reality set in and they went back to their locations, they were confronted with a mountain of new tasks, initiatives, and directives. All of this new work and the steady pull of ingrained habits did more to shape their performance than any good intentions they took away from the leadership conference. Sadly, the company announced massive layoffs a few months later when it was unable to meet its service or profit goals.
Culture is what we actually do. It can’t be created by a marketing campaign, a vision statement, a training program, or a motivational conference. Creating a customer-focused culture takes time, commitment, and perseverance. Most important, it’s a never-ending process.
The first step in creating a customer-focused culture is to clearly define it. You must give employees clear direction so that they know how they can contribute. Here are the three hallmarks of a clear definition of customer-focused culture:
1. The definition is simple and easily understood.
2. It describes the type of service we want to achieve for our customers.
3. It reflects both who we are now and who we aspire to be in the future.
In-N-Out Burger is a great example of a company with a clearly defined customer service philosophy written in plain English:
Give customers the freshest, highest quality foods you can buy and provide them with friendly service in a sparkling clean environment.16
This philosophy is immediately apparent when you walk into any In-N-Out restaurant. Look into the open kitchen, and you’ll see fresh produce or an employee using a slicer to cut whole potatoes into fries. You’ll be greeted by a cheerful employee who makes eye contact, smiles, and thanks you sincerely. You’ll notice how clean the restaurant is, even if you happen to stop in during a busy time when the dining area is full of customers. Finally, your experience all comes together when you sit down and take a bite of one of their delicious cheeseburgers.
The second step in creating a customer-focused culture is setting goals that represent forward progress toward the company’s definition of outstanding service. A good customer service goal isn’t something you write and then tuck away in a drawer somewhere. It must be continually reviewed and discussed so that employees know how they’re doing and can take action to keep making progress.
Customer service goals must have three qualities to effectively encourage positive performance:
1. The goal should focus employees on the desired performance, rather than divert their attention away from the big picture.
2. The goal should encourage cooperation by emphasizing team achievement rather than individual outcomes.
3. The goal should tap into employees’ intrinsic motivation, rather than rely on external rewards to drive performance.
Starwood Hotels is an organization that effectively uses goals to drive outstanding service. Like most hotels, Starwood regularly captures guest feedback through surveys. The survey scores are combined into a Guest Service Index, or GSI score, that’s an important indicator of hotel performance.
The Westin Portland, one of Starwood’s locations, provides a glimpse into how goals can drive behavior. Every associate at the Westin Portland understands that guest satisfaction is a top priority. Associates review their GSI scores on a daily basis and obsess about the results. They talk about their results in team meetings, share stories, and ask each other for feedback.
Teamwork is essential to the Westin Portland’s never-ending quest for guest satisfaction. Associates coach and encourage each other to deliver high levels of service that will help them achieve their GSI goals. Departments hold friendly contests to see who can get the best GSI results. The hotel’s leadership team regularly discusses guest feedback with the associates and encourages people to share ideas that will improve service even further.
What they don’t do is offer incentives to achieve their GSI goals. The hotel’s former general manager, Chris Lorino, instilled a philosophy that achieving the highest possible GSI score should be viewed as a primary responsibility for every associate. He felt that implementing an incentive program would divert the associates’ focus to earning the incentive rather than pleasing guests. Chris has since been promoted, in part because of the outstanding service his team achieved, but the Westin Portland continues to rely on its associates’ innate desire to deliver the best possible service.
The third step toward creating a customer-focused culture is for leaders and managers to recognize and act upon the “moments of truth” that truly define a culture. A moment of truth refers to the myriad of daily decisions a customer service leader must make. These decisions include hiring, training, policy making, budgeting, and supervising. A company can claim to have a truly customer-focused culture only when the vast majority of its leaders’ decisions align with the company’s definition of outstanding service.
My local plumbing company is an example of an organization that has developed a reputation for outstanding service by mastering the moments of truth. Plumbers generally have a reputation of showing up late, creating a big mess, and charging enormous fees. Ideal Plumbing, Heating, Air, and Electrical does the opposite by making customer service a priority in everything its employees do.
For Don Teemsma, Ideal’s president, the hiring process represents the first moment of truth. According to Don, every technician the company hires must have both outstanding technical and customer service skills. Each candidate is carefully screened and interviewed by at least one manager and one coworker, and any interviewer has the authority to reject a candidate if the interviewer believes the person wouldn’t live up to Ideal’s high standards.
Hiring great people is just the beginning for Ideal. Don and his management team consistently reinforce their customer service philosophy through training, regular team meetings, and daily one-on-one interaction with employees. Don spends a good part of each day checking in on customers at the job site or over the phone, to make sure things are going smoothly. From a customer’s perspective, Ideal’s consistent focus on these “moments of truth” results in an extraordinarily high level of service.
Solution Summary: Creating a Customer-Focused Culture
Employees are powerfully influenced by their workplace culture. Delivering outstanding service requires organizations to develop a positive, customer-focused culture—but it also takes more hard work, discipline, and dedication than many organizations realize. Here is a summary of the solutions discussed in this chapter:
• Ensure that your customer service leaders act as role models who actively demonstrate a positive customer-focused attitude and encourage their employees to do the same.
• Work closely with persistently negative employees to help them change their behavior, or else remove them from the team if they are unwilling or unable to do so. These employees can be detrimental to both customer service and team morale if their behavior is left unchecked.
• Create a clear definition of your customer service philosophy so that employees receive clear direction and can easily understand how they can contribute.
• Develop customer service goals that help motivate employees and keep them focused on providing the highest level of service possible.
• Win the moments of truth that define an organization’s true culture.
Notes
1. Raymund Flandez, “In-N-Out Burger vs. McDonald’s: Guess Who Won?” Independent Street (blog), Wall Street Journal, January 28, 2009.
2. McDonald’s was ranked last in the 2010 American Customer Satisfaction Index (www.theacsi.org) for limited service restaurants. In-N-Out is a regional restaurant chain and was not included in this study.
3. You can read more about each company’s history on their respective websites: www.in-n-out.com and www.aboutmcdonalds.com.
4. Stacy Perman, In-N-Out Burger: A Behind-the-Counter Look at the Fast-Food Chain That Breaks All the Rules (New York, Collins Business, 2009).
5. “Our readers reveal: Best Burgers,” Consumer Reports, October 2010.
6. McDonald’s Corporation 2010 Annual Report.
7. Lauren Young, “McDonald’s Supersized Retirement Plan,” Businessweek, January 12, 2009.
8. S. E. Asch, “Opinions and social pressure,” Scientific American 193, no. 5 (1955), pp. 31–35.
9. Kendra Cherry, “The Asch Conformity Experiments,” About Psychology, http://psychology.about.com/od/classicpsychologystudies/p/conformity.htm.
10. Muzafer Sherif, “A Study of Some Social Factors in Perception,” Archives of Psychology 27, no. 187 (1935).
11. Jim Collins and Jerry I. Porras, Built to Last: Successful Habits of Visionary Companies (New York: HarperCollins, 1994).
12. The American Customer Satisfaction Index, 2008 Specialty Retail Stores Results www.theacsi.org
13. Thomas J. Lueck, “Consumer Chief Lambastes Circuit City Return Policy,” New York Times, December 27, 1997.
14. Anita Hamilton, “Why Circuit City Busted, While Best Buy Boomed,” Time, November 11, 2008; www.time.com/time/business/article/0,8599,1858079,00.html.
15. “Tapping the Potential of Informal Learning: An ASTD Research Study.” American Society for Training & Development whitepaper, 2008. Available at www.astd.org
16. From In-N-Out Burger’s corporate employment website, www.in-n-out.com/employment/corporate.aspx.