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 found out in 2012. Its green credentials were dealt a massive blow.
Ikea only 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, compared 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 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, as it will now undergo microscopic
environmental and customer scrutiny.
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?
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 big in a
highly segmented world is no longer the determination 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. Mohamed Al-Fayed for example, despite
buying Harrods, never shook off questions about his background.
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 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, 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.
Rail companies 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
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?
Values as seen by Customers
Customers, potential and existing, are drowning in
choice what makes you stand out to them is the values you own and can
demonstrate. 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 companies creating 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.
Values checklist
- 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 only points one and two then
you are not living your values. If you cannot hand on heart even answer
those two them its probably time to look at your values in a lot more
detail.
Values, the official ethos of a how a company operates not only drives the behaviour but also defines the entire organisation's existence, it answers the question why it exists.
The values people live become and codify the culture within the business of how people do things inside any organisation. The culture is what people inside and customers from outside any organisation experience, it is how people behave within the workplace. It is the reason why in a command market your customers buy from you not from the competition.
Posted by Richard Gourlay
Labels: brand strength, customer confidence, Google, Homebase, honesty, Ikea, Ryanair, transparent business, trust, trusted brands, values, values business, values matter
