Blog » 2010 » November
November 24th, 2010 | no comments | Posted in Uncategorized
An article by Chris Blackhurst in Monday’s Evening Standard caught my attention because the headline really annoyed me. I saw it first online via a tweet from @populuspolls (it refers to research they carried out) and it said: “Customers must love you – it’s key to company success”.
It’s such a lazy and meaningless thing to say – and it doesn’t do justice to what Chris Blackhurst actually wrote (I read the article properly when I picked up the paper later), the original Populus research, or the pamphlet published by TLG Ltd (the agency who commissioned the work).
The pamphlet is worth a proper read (only four pithy pages). It’s a bit ‘jargonistic’ in parts, but the basic message is that, organisations which show leadership by changing how they operate to deliver something important for customers (often at the expense of some profit) will generate public trust which in turn leads to more business, greater market share and a stronger reputation amongst stakeholders and customers. Or as my Mum might say (and often does): ‘make yourself useful’.
I really buy into this (check out my own theory on my website) because it is simple and so obviously true. However, let’s be absolutely clear, delivery requires discipline, commitment and a genuine belief in what a company says it is trying to achieve. In other words, it’s hard work. Which is why the Evening Standard headline irritated me: that suggests the benefits of applying this discipline (ie, love and money) is what should motivate companies. This is completely wrong and misses the point entirely. The point of this kind of approach is that it is not motivated by self-interest. It has to be authentic and that means it must be driven by an organisation’s genuine commitment to achieving ‘the something important’. Indeed, so much so, it is willing to do so at some cost to itself.
I noticed in yesterday’s FT that Michael Skapinker had written sceptically about Unilever’s recent decision to launch a ‘sustainable living plan’. I don’t blame him (we’ve heard it all before). But because we have heard it all before and not been convinced by what we’ve heard, I was a little surprised that Paul Polman of Unilever was criticised for not talking like other CEOs. It was noted he didn’t point to bottom line benefits of sustainability like everyone usually does, and indeed, when asked what investors would make of his plan he said: “Unilever has been around for 100-plus years. We want to be around for several hundred more years. So if you buy into this long-term value-creation model, which is equitable, which is shared, which is sustainable, then come and invest with us. If you don’t buy into this, I respect you as a human being, but don’t put your money in our company.”
I’ve not studied Unilever’s plan in detail and have no idea if they followed the TLG model, but Skapinker’s article alone includes lots of evidence which suggests to me Mr Polman really means what he says and – because of that – his strategy could be a real winner.
Now, some might argue that Michael Skapinker’s article is proof that it’s impossible for this kind of strategy to be a winner amongst opinion-formers. I disagree. Don’t forget this kind of approach is hard work because it is based on what an organsation does and not what it says. No-one will be won over immediately; everyone needs on-going evidence which is why success relies on consistency and commitment. Even though Michael Skapinker is sceptical, his article has highlighted that Unilever is different and willing to show leadership. For me at least, the CEO’s confidence in playing a longer game is very refreshing. If he and his team stick at their strategy, keep finding ways to show everyone they are doing just that and provide on-going evidence of the benefits it is realising for customers and the public at large, I am as certain as I can be that their trust rating will increase and their reputation with it. Who knows, in a few years’ time Unilever might enter the UK league of top 10 trusted companies.
November 10th, 2010 | no comments | Posted in Uncategorized
Calling all chief executives: Alan Joyce, the chief executive of Qantas, is a canny communicator. Watch him and weep. Not only has he seized control of his own company’s narrative since an engine in one of his aeroplanes broke apart on Thursday, he’s been controlling the Rolls Royce narrative too.
For example, on Monday he said: “there was oil where oil shouldn’t be on the engines”. Now, this is killer evidence of nothing, but his plain-speaking is helping Qantas achieve two important things: make us believe the man in charge has got the situation gripped; and gently nod us in the direction of Rolls Royce. (I’ll come back to Rolls Royce in a minute).
So where does Mr Joyce get the confidence to be so sure of himself – and of us in believing him? Well, he’s certainly got clear evidence the problem is engine-related so he’s on firm ground in making sure Rolls Royce doesn’t escape attention. (NB: deflection doesn’t work without relevant evidence and if you want to know what I mean, just check out the FIFA chap who’s trying to blame the media’s inquiries rather than the corruption they uncovered for the chaos affecting the 2018 hosting competition.)
But Mr Joyce has done something far more important than just provide us evidence that someone else might have messed up. He’s provided evidence that he and Qantas are on their game. In other words, Qantas has shown us it really is all about what it says is its first priority: passenger safety. And they have shown us how they use the clarity of passenger safety to drive all decisions, including the way the airline reacts when something goes wrong. And furthermore, that clarity of purpose has given Alan Joyce confidence to speak with authority about his airline’s performance over the past few days.
Of course, our belief in Qantas’ commitment to passenger safety is helped because Dustin Hoffman told us in Rain Man that the airline has never had a fatal crash. But that statement would hold little currency if Qantas didn’t keep showing us that it does everything possible to avoid a crash. Because one day (God forbid), Dustin’s one-liner may become redundant. And, reassuringly, Qantas goes out of its way to show us it understands that. Indeed, Qantas understands that its reputation is not built on Rain Man, it’s built and will be maintained on showing us real evidence of the lengths it goes to keeping its passengers safe.
And over the past week, that is what Alan Joyce has done. And that is why all the media talk about corporate reputation is not about Qantas, it’s about Rolls Royce.
So what about Rolls Royce? And isn’t Alan Joyce playing with fire by nodding in their direction as the people mainly responsible (their engines are in his aircraft after all)? Well the answer to the second question is probably no, because I’m guessing someone like Mr Joyce would expect a company as brilliant as Rolls Royce to be as confident in showing how it operates as he is in showing us Qantas. And that’s where Rolls Royce has shown itself to be weak.
Rolls Royce is all about quality and excellence. Top of the range. Nothing better. It is a remarkable British brand. And it doesn’t even need Dustin Hoffman to tell us it’s great. We use the brand to define ‘the best’. When people say “I want Rolls Royce service”, no explanation is needed.
Of course there are a number of reasons why serious people might advise Rolls Royce to keep its head down (the real threat of legal action from a competitor being the biggest I’m sure). Personally, I wouldn’t accept any of them. (And that its customers are airlines and not people is irrelevant in my book. It employs people and it is an important British engineering company.)
For me, there is absolutely no excuse for Rolls Royce not to show us – just like Qantas has – how committed to excellence it is by the way it is responding to this current crisis. Now, I accept it’s harder for Rolls Royce because their actions are not as obvious as landing a plane with a missing engine or grounding a fleet for a few days. But it’s got to find a way of showing us that it cares about getting it right.
Being in danger of taking the rap for what happened to QF32 is certainly not an excuse not to try. Indeed, not only is that a reason to get out there (the share price was nose-diving for goodness sake), handling this crisis is an opportunity to show everyone what kind of company it is and to strengthen its reputation. The world is looking at Rolls Royce right now and it doesn’t do that very often. Just like Dustin Hoffman’s one-liner about Qantas’ crash record, “I want Rolls Royce service” is meaningless unless Rolls Royce itself keeps showing us why we say that.
On Monday Rolls Royce made a statement that it is ‘making progress’ in establishing the cause of the problem. Hallelujah. And the share price rose as a result. But that statement didn’t go far enough for Rolls Royce to wrestle back control of its own narrative. It has promised a further statement on Friday. When that is issued (if not before), it would be great if – alongside some facts and figures – the CEO could find his own way of reminding us what Rolls Royce is all about, and showing us how it has used that clarity to correct this operating failure. This extract from the Rolls Royce website might be useful inspiration.
‘To be Trusted to Deliver Excellence’ is our central organising thought. It is what we aspire to become. It is the embodiment of the promise we make to our customers. In today’s competitive environment, it is not enough to build great products: our customers are looking to us to deliver the best in service solutions. When we do, we build enduring relationships with our customers, partners and other stakeholders.
P.S. I’ve just heard this morning that Singapore Airlines has announced it too has some problems with Rolls Royce engines in their A380s. So c’mon Rolls Royce – this is absolutely the time to tell us why you care and show us how.
November 4th, 2010 | no comments | Posted in Uncategorized
Yesterday (Tuesday 2nd November) I read an article by Michael Skapinker on FT.com about how companies can learn from this year’s BP disaster. I felt Mr Skapinker had missed some important points, so I posted a reply. I’ve pasted a copy of what I said below. However, it made me realise I really should have a blog of my own – so this is why I’ve set this up.
Comment on Michael Skapinker’s 2 Nov article: ‘Memo to board: we need to talk about BP‘
Interesting article, but in learning lessons from the BP disaster, I think companies need to reflect more deeply than just on their reactive processes.
I have not studied the examples you cite in any detail, but in my view what distinguishes successful crisis management – in this case J&J’s Tylenol from Lehman, BP, Toyota etc – is whether an organisation is clear about the fundamental point of its business and understands how that is essential to its reputation.
J&J clearly understood that any suggestion (indeed, evidence) that Tylenol kills rather than cures would be ruinous and withdrawal of the product was a no-brainer. Toyota, however, which has built its reputation on building safe cars, didn’t understand it was irrelevant whether the faulty brake lay with the manufacturer or the driver – the impact of the failure was to undermine what it exists to do: provide safe cars. Enron, Arthur Andersen and Lehmans seem to have lost the plot entirely in terms of what they were about. As for BP, its website (I’ve just looked at it) is very clear about what it does: extracting oil from hard to reach places and using it to make products to sell to people like me as safely as possible. If it had properly understood that the impact of what went wrong off the Florida coast totally undermined what it tells us it’s here to do, it would – in my view – have not doubted for a moment the scale of the disaster and the need for it to accept full responsibility for gripping the situation.
I agree with Messrs Hayward and Dudley that an organisation should be judged on what it does. But, the reason Mr Hayward’s words were so damaging was not because they were an “attention lapse”, because he was unrehearsed (though evidently he was), or even because they were heartless (as they were). They were damaging because they illustrated what was wrong: BP was out of touch in recognising the impact of the disaster on its own reputation and therefore lacked the will for accepting responsibility and sorting it out.
I agree that company executives need to communicate quickly and clearly in the event of a disaster and getting the content and tone right is essential. But the audience doesn’t want ill-informed guesses just because we live in a world of 24 hours news. They expect – quite rightly – those in charge to be able to tell them: what kind of problem it is; why it’s essential to the organisation and its customers that they fix it; and an outline plan for fixing it.
But delivering those messages needs confidence. And the confidence comes from those in charge knowing exactly what their organisation is there to do and recognising that its reputation is built on providing the evidence of it delivering that purpose.
It is of course right – as you advise – that all organisations carry out risk analysis, have registers and rehearse their processes and procedures for when something bad happens (as it always does). But they also need to know how policy decisions to introduce new products or to embark on new ventures relate to delivery of the organisation’s purpose. This is essential because it’s that which will allow executives to determine whether the fault if it goes wrong lies in the execution or in the policy. The understanding is what gives executives the confidence to explain themselves on the media.
If you’re about safe cars, drugs to relieve pain, auditing to protect against fraud, or an oil company extracting the stuff safely: the next time something happens that jeopardises your ability to deliver that (and therefore people’s belief in you being able to do so) make sure you can do this: acknowledge the problem immediately as something which goes to the heart of why you exist because that will give your stakeholders, shareholders and customers confidence that you are taking it seriously and will take responsibility for fixing it swiftly. Once everything has been properly analysed, then come back and explain the root of the problem and the steps taken to prevent a recurrence.”