6.

An Action Plan for Change

Human redemption is one of the great things in life. We can go wildly off the rails and work to redeem ourselves. The same is true for every business in the world. The question is, if your company sucks, when will you act to redeem it, to turn it around? How about now?

Timing isn’t the issue. Methodology is. What can you do when you see that your company has reached that dangerous plateau? What do you do when you look in the mirror and see that sign of fear in your eyes?

If you are in Phase 4 or 5, you need to move expeditiously to adopt an action plan. One that will be effective enough to turn your company around must not only sniff out and correct any of the four reasons that your business has suffered—rudderless leadership, the lust-to-lax syndrome, incompetence, and conventional thinking—but must also focus on how to get (and keep) customers hooked on your business. You don’t want your customers happy, you want them thrilled. The following is my four-step Action Plan.

Step 1: View Your Business with Fresh Eyes

Where do you fail to exceed the norm for quality and service in your industry? In which facets of your business do you accept conventional levels of customer satisfaction as good enough? (Hint: You shouldn’t, because it never is!)

Make a list of each and every aspect of your mediocrity. Granted, this may be difficult because a) we get married to the ways we do business, good, bad, or indifferent, and instinctively we want to defend and protect the status quo; b) we can become blind to or short-sighted about our own failures; and c) we may not be aware of superior options.

To see through your business with a powerful new prism, conduct a Discovery, a process designed to identify every way your business falls short of excellence—of the ability to thrill customers, earning their loyalty and their viral advocacy. The Discovery process serves as a compass for turning around a business on the skids and/or identifying incipient problems before they can wreak havoc on the business.

The process can be accomplished, in part, by:

• Asking trusted peers to shop your company, looking for gaps, failures, and any signs of mediocrity you may be inured to.
• Calling 20 or more customers or clients for candid discussions of your business, digging deep to discover what, if anything, they love and what they would want to change.
• Taking a turn as a customer yourself. Call incognito. Visit your website. Place an order. Ask yourself, “Is this truly a thrilling experience?”

The Discovery process peels back the layers of your business to reveal legacy processes and procedures, camouflage, and even subterfuge. You can learn not only what your business does well and where it performs poorly but also why and how certain aspects of your operations evade detection and thus corrective action.

The Discovery is best conducted as a series of interviews with a wide range of people whose opinion about your business should carry substantial weight:

• Former employees
• Customers
• Former customers
• Prospects you have failed to win over
• Trade associations
• Editors of industry publications
• Securities analysts (if yours is a public company)

As you notice, we do not suggest interviewing existing employees, as their opinions are often skewed in ways that distort the findings.

The results of the interviews add up to a view of the business that is of greater value than the sum of its parts. You are presented with a comprehensive look at your company from the outside in, and the results are often unflattering but highly valuable in providing you with a road map for moving forward.

In one of the Discovery sessions MSCO conducted for a group of retirement communities under common ownership, we found that:

• On-site staff failed to project courtesy and a sense of hospitality;
• Prospective buyer tours were conducted with a casual nonchalance that left the prospects with the distinct impression that no one had pride in the communities;
• The residences were considered highly attractive but substantially overpriced; and
• The communities had a reputation for shoddy workmanship, which though untrue, was never corrected in the marketplace.

Throughout the Discovery, identify every single aspect of your operations that simply goes through the motions. Where is there no joy in customer interface? Where do you follow the conventional rules as opposed to reinventing the rules? Do you scale the heights to the level of rewarding your customers with an unforgettable experience, or do you settle for “good enough”?

Step 2: Envision Delighting Your Customers

You could call this the “dream big” step, but it’s more than that. This action entails engaging in the process of Envisioning, in which you are imagining your business as extraordinary through the eyes of your customers. You’re thinking of ways to thrill your customers as opposed to simply serving them.

Einstein liked to say that more important than his scientific prowess was his ability to fantasize about making the “impossible, possible.” In the course of his momentous work, he would develop a fantasy (a scientific concept that he knew defied reality) and would then work backwards to reality. You need to “see” where you’re going and then figure out how to get there. I call this Cartoon Imagination.

Businesspeople love to say that they want to develop “out-of-the-box” thinking, but with Cartoon Imagination, you start from outside the box to begin with, not inside. If we take a cue from Einstein, we don’t have to liberate our in-the-box thinking when we are never imprisoned by it in the first place. Begin with the dream, the fantasy, the seemingly impossible.

Step 3: Learn from Others

Take the cues you identify at other businesses—the ones that leave you exhilarated or feeling somehow deeply impressed—and apply them to your own. Look at how they fight the four factors that cause failure by having:

• Strong, effective leadership
• A culture that is not complacent but continues to lust after customers rather than getting lax
• Competent employees

Also consider how others forego conventional thinking; that is how you thrill your customers.

One thing I learned from a neighborhood business is that customers love it when you treat them as more than special—as divas and VIPs. That may seem obvious, but what may not be obvious is that you do that by breaking the rules. Here’s how I discovered this. My wife and I shop at a clothing boutique that is perpetually packed, the parking lot overflowing. Managing a flow of vehicles that must be parked and retrieved minute by minute requires a well-oiled methodology. The attendants need to follow the system—designed for maximum efficiency—to a T.

Or do they? The fact is, the general manager has infused the staff with a drive to thrill patrons and to break the rules to do so—because breaking “the rules” is where the thrill often lies.

As a regular customer, I am never given a claim ticket for my car. In fact, the valets park it right outside the front entrance, making a statement that I am a special guest and ensuring that I can leave within seconds of making my purchases.

This simple gesture, built into the culture, says I am not a customer—I am a houseguest. The company does have a system, management has developed logistics, but I am made to be blind to it. They instead choose to thrill me so that I will come back again and again. And I do.

What rules can you break or bend for your customer?

If the doctor went straight to the book and its rules, which likely would have looked to standard medicine as the answer, the boy might not have gotten the help that transformed his situation. But the doctor tossed out the book and instead asked the boy what, if anything, made him smile. Surprisingly, the boy answered in an instant: “Baking.”

The doctor encouraged him to begin baking cookies and to start his own after-school business—and to top it off she took $20 out of her pocket, handed it to him, and announced herself as his first investor.

Today, he is a young entrepreneur with a new passion for life. I believe he will be a stunning success and make us all proud. I believe he has a rule breaker to thank for that. They don’t teach that in school. They shun it.

In addition to breaking the rules, another lesson to learn is that building relationships with customers is the key to retaining them.

Considering all the jokes about a doctor’s bedside manner, you don’t normally think of the doctor’s office as where you would learn about relationship-building. After all, we live in an age of medical productivity and doctors are compensated, for the most part, based on the number of patients they see, meaning there is little time for any one person in the examining room.

But it doesn’t have to be that way. Not uniformly. One of my doctors, cardiologist Ron Wallach, spends our first ten minutes or so talking about politics, art, business, and investing. It would appear, on the surface at least, that this dilly-dallying would make him less highly compensated than if he got right down to business, examined me, and proceeded to the next patient.

But the opposite is true. His willingness and desire to learn about his patients, to put the stopwatch aside and build a true human relationship, leads to the warm and passionate referrals that have built a booming practice.

In what ways can you make your interactions with your customers more personal? Whether you are a merchant, the CEO of a software firm, an accountant, a fashion designer, or any other kind of businessperson, you can apply the break-the-rules approach to your customers/clients/businesses in a way that moves the relationship from a purely transactional one to a relational one. Take a moment and think about how you can do this. Remember, start outside the box.

Step 4: Continually Improve

Seek continuous, iterative improvements in your business. Establish a set of benchmarks to raise your company’s performance to the level that delights your customers—and once you accomplish this, raise the bar again. And again.

Sandy Weill was building Citigroup, and my firm, MSCO, was providing marketing services for Smith Barney. At Sandy’s office, a sign I once saw there declared, for all of Sandy’s team to see:

The Chairman Is Not Happy

This was Weill’s unique and unforgettable way of saying effectively, “Don’t allow complacency to slip into our company’s culture. There are always cracks in our system and ways that we can cut costs, raise the bar on our operations, polish our client services—and I can guarantee you, we’re not doing them as well as we can.”

Just how right Weill was came into sharp focus when he left the company in April 2006. Although critics believed that Sandy’s business model—assembling a sprawling supermarket of financial services—was doomed to collapse, the truth is that under much of the founder’s 20-year reign, the company’s revenues and profitability soared. This happened in great measure because Weill knew intuitively and viscerally that to grow an ever-more successful enterprise, you must keep the pressure on and maintain the growth spirit with a relentless drive that no one can stop.