THE BIG IDEA: Here are seven benefits for making your best customers the central focus of your organization’s primary directive.
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No matter how big your marketing budget, you can’t market to everyone. The more restricted your budget, the more intelligent your approach needs to be.
Your best customers are your Brand Lovers. Understanding the needs of your Brand Lovers and serving them better than anyone else is critical if you want to outmaneuver the competition and grow your market share.
Here are seven reasons why your Brand Lovers are so important:
Your Brand Lovers choose you more often than your competitors. To most Mac users, there’s no alternative competitor to choose from.
Your Brand Lovers spread the word about your brand and create new customers for you. Basically, your best customers are the source of your word-of-mouth stream.
Your Brand Lovers are by nature loyal customers. Customer loyalty is a better determinant of profitability than mass appeal.
Focusing on your Brand Lovers gives your organization a singular vision of whom you’re trying to serve. Too many companies chase too many different kinds of customers and dilute their efforts in the process.
Similarly, serving your best customers can lead to explosive return on investment (ROI). Example: When Apple opened their retail stores they expected to generate $1,000/square foot. They actually generated $4,000/square foot. Ultimately, your Brand Lovers drive the profitability of your business.
Think about what would happen if you turned just 10% of your occasional customers into Brand Lovers. For large enterprises, this shift can represent a sizeable revenue increase.
By focusing on your Brand Lovers, you can build a powerful brand that stands for something meaningful to them. This gives you clear differentiation in the marketplace and helps you organically attract more of your most profitable customers.
The bottom line is that serving your best customers is the surest way to grow a strong, profitable business—in any economic climate.
THE BIG IDEA: The old paradigm of employee motivation can actually be hurting your business’s performance. Social psychology offers fresh insights on what drives modern humans to perform at their best.
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If there was a strategy that would simultaneously improve your personal effectiveness and organization growth, would you adopt it today?
How about if we told you it could make your life and the work of your employees a whole lot more enjoyable too?
Rethinking Employee Motivation
The primary form of motivation in the workplace has been the old carrot-and-stick approach: you work for us and we’ll pay you for your time.
Over the past century, money was the primary motivator in corporate America. In the past, money as a primary motivation worked because employee tasks were routine, unchallenging, and controlled.
Our current work environment is very different, characterized by complexity and rapid change.
In Drive: The Surprising Truth About What Motivates Us, author Dan Pink provides substantial evidence that the carrot-and-stick approach is actually destructive to organizations in today’s dynamic workplace.
Focusing mainly on financial compensation as the primary employee motivator has been found to reduce lower performance, inhibit creativity, foster addiction, and promote unethical behavior in organizations.
Three Psychological Needs for Intrinsic Motivation
Money is an external factor. Study after study show that people improve their performance when they are motivated by something within themselves. Psychology calls this intrinsic motivation.
Self-determination theory suggests that there are three psychological needs that form of the basis for intrinsic motivation. Applied to your organization, they can improve employee health, wellbeing, and performance:
Competence: allow employees to become better at something that matters to them.
Autonomy: allow employees to be self-directed with control over key aspects of their work (which can include when they work, how they work, with whom they work, and exactly what they are working on).
Relatedness: provide means for employees to contribute to a cause greater than themselves, to experience caring for others.
As a chief executive, you understand the importance of autonomy and the sense of freedom that comes from being the captain of one’s own ship.
Last week’s quote from PepsiCo CEO Indra Nooyi stuck with us: “If you want to improve the organization, you have to improve yourself and the organization gets pulled up with you … I cannot just expect the organization to improve if I don’t improve myself and lift the organization.”
Nooyi’s statement speaks to the motivation of competence and the drive to achieve greater mastery of one’s self. According to a survey of 267 C-level executives of Fortune 500 companies, chief executives invest an average of 30 minutes in personal development each day.
The Power of Purpose
Nooyi’s stated end goal is to “lift the organization.” This is the drive of relatedness, or what authors like Dan Pink and Tony Hsieh have called purpose. This universal need to connect and care for others doesn’t just motivate individuals—it translates to bottom-line profits too.
Wharton organizational psychologist Adam Grant ran an experiment with call center employees who were tasked with calling people to ask for donations.
He randomly separated them into three groups. Each group had the same conditions except for a five-minute story each group read before their shift.
The first group read stories from other call center agents about how their job helped teach them transferable sales skills (a personal benefit).
The second group read stories from university alumni who benefitted from the donations raised by the call center and how the scholarships helped them (a purpose that connected the agents with something greater than themselves).
The third group read stories that had nothing to do with personal gain or purpose (the control group).
Grant couldn’t believe the results of his study. He replicated it five more times to be sure: while the personal benefit group showed no change in their performance, the purpose group more than doubled their dollars raised.
The call center employees in the purpose group couldn’t identify what exactly was driving their behavior. They simply doubled their productivity!
Could helping others and making a difference in people’s lives be a secret factor in motivating people to higher performance? It certainly appears so.
How to Improve Employee Motivation
Here are three steps to improve employee motivation through purpose:
#1: Clearly define your business in the context of your customers: who are they as human beings? How are you committed to serving them and adding value to their lives?
#2: Communicate this customer-driven message throughout your organization. Everyone in your organization should know the purpose of the business so they may find their own ways (autonomy) of contributing to that purpose.
#3: Be consistent. Never stop “selling in” to your organization. Inspiring leaders always find fresh ways to reinforce their organization’s purpose through words, personal behavior, and corporate decisions.
THE BIG IDEA: Executive leaders are faced with a big question: Who should they put first: customers, employees, shareholders, or management? The best answer lies in understanding how each area relates to the other.
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Who comes first in your business?
Customers
Employees
Shareholders
Management
This is one of those frustrating questions. You can make an argument for each answer:
A. Put Customers First
Customers are the lifeblood of your business. As management thinker Peter Drucker always said, “the purpose of business is to create a customer.”
Many businesses give lip services to the “customers first” idea, but only a few actualize it—L.L. Bean, Costco, Amazon.com, MINI USA, Trader Joe’s, to name a few.
Amazon.com CEO Jeff Bezos says one of their three big ideas that made Amazon successful was: “Put the customer first.” McDonald’s founder Ray Kroc said, “Always put the customer first and success will be yours.”
B. Put Employees First
If you create customers by providing value to them, how do you deliver this value? Through your employees.
Companies like The Container Store, Southwest Airlines, Google, Patagonia, and Zappos are high fliers, in part, because of their “employees first” mantra.
Virgin CEO Richard Branson has a simple formula: happy employees equal happy customers. The converse is also true: unhappy employees create terrible customer experiences and destroy brand equity.
Branson says, “Put your staff first, customers second, and shareholders third.”
Branson’s priorities echo Southwest Airlines’ founder and former CEO Herbert Kelleher: “Take care of your employees and they will take care of the customers.”
C. Put Shareholders First
This has been a popular answer for many publicly-traded companies in the era of shareholder capitalism. Investors often look for businesses that put shareholders first.
Customers, however, don’t care about shareholder value. And this directive doesn’t resonate within organizations either. The goal of “maximizing shareholder value” doesn’t motivate employees or drive high performance.
This priority can help improve cost management and operational accountability. But, too often, over-emphasizing shareholder value leads executives to focus on the short term (quarter to quarter metrics) at the cost of long-term profitability and sustainability.
D. Put Management First
There’s two ways to look at this answer. First, it can be used by selfish, self-interested executives driven by greed and personal gain.
Or, second, it can be based on a profound, but often neglected truth: you can’t effectively serve others if you don’t first invest in yourself.
As PepsiCo CEO Indra Nooyi explains, “If you want to improve the organization, you have to improve yourself and the organization gets pulled up with you … I cannot just expect the organization to improve if I don’t improve myself and lift the organization.”
Where’s Option E—All of the Above?
The reality of modern business is that you can’t afford to focus on one of these area at the expense of the others.
These four areas form a symbiotic relationship: the role of management is to take care of its employees. Employees serve customers. Customers increase shareholder value, which in turn, elevates management. And the upward spiral continues.
Based on the internal strengths of your enterprise, you may have an emphasis on one of these four categories, but leaders looking to compete in a fast-changing marketplace will consciously drive growth in all of them. Doing so will strengthen your business and increase your chances of long-term market success.
THE BIG IDEA: Courage and boldness are defining characteristics of visionary CEOs committed to customer-centric innovation and redefining their markets.
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Your starship is staffed with competent officers who possess specialized training and knowledge.
Your warp drive is ready. That is, you possess the creative capital, ingenuity, and resolve necessary to enter new, uncharted territory.
You need only give the officer manning the Flight Control the proper coordinates and say, “Make it so.”
Cult Brands are successful because they are willing to be unlike every other competitor in their market. They cut through a sea of doubt, criticism, and opposing market forces, daring to stand strong for what they believe while blazing ahead.
The Courage to Invent, Fail, and Be Patient
Amazon.com’s CEO, Jeff Bezos, has been willing to operate his mega-retail business at a loss for nearly 20 years, staying true to his vision of Amazon being “the earth’s most customer centric company” and “to build a place where people can come to find and discover anything they might want to buy online.”
Bezos doesn’t only demonstrate the courage to innovate. He shows the courage to experiment continuously and to fail often. And most of all, he demonstrates the courage to be patient.
“I don’t think that you can invent on behalf of customers unless you’re willing to think long-term, because a lot of invention doesn’t work,” Bezos explains. “If you’re going to invent, it means you’re going to experiment, and if you’re going to experiment, you’re going to fail, and if you’re going to fail, you have to think long term.”
One such invention is their Amazon Prime program. An estimated 40 million customers now pay $99 annually to receive free two-day shipping and other perks like free streaming video and music. Prime customers spend more than twice non-Prime members.
A recent study of online shoppers found that less than 1% of Prime shoppers (versus non-Prime) are likely to consider other mass-market retail sites like Target.com and Walmart.com in the same shopping session. Amazon Prime is essentially eliminating the competition from the mind of Amazon Prime customers. A bold innovation.
The Courage to Reinvent Your Organization
For your enterprise to go boldly into the future, you need a high degree of collaboration among your people. The culture and environment of your workplace is a deciding factor in your ability to navigate into uncharted, often precarious market conditions.
Few CEOs appreciate the power of culture as much as Zappos’ Tony Hsieh who built his online retail business around the concept of core values.
Hsieh is once again pushing into uncharted space, eliminating all management positions in his company. Called a holacracy, this management structure moves beyond the traditional top-down hierarchy by providing an open system that supports self-management and self-organization.
Hsieh notes that studies show that when cities double in size, innovation or productivity per resident increase by 15 percent. In businesses, however, innovation or productivity per employee tends to decrease as companies grow.
“In a city, people and businesses are self-organizing,” Hsieh explains. “We’re trying to do the same thing by switching from a normal hierarchical structure to a system called Holacracy, which enables employees to act more like entrepreneurs and self-direct their work instead of reporting to a manager who tells them what to do.”
Can you imagine what would happen if your employees become fully self-directed and self-managed? What kind of innovation, productivity and growth can develop in an organization that forms a fluid, dynamic, and integrated whole, operating at a level far greater than the sum of its parts?
The Courage to Operate with Integrity
As Chipotle Mexican Grill started to grow, founder and co-CEO Steve Ells became aware of how food was produced and processed in the United States.
He discovered a sad state of affairs: animals like pigs and dairy cows were confined in stark pens. Cattle, pigs, dairy cows, and chickens were injected with hormones and antibiotics that injured both the animals and the humans that consumed them.
Chipotle launched the “Food with Integrity” initiative to highlight their commitment to sustainable farming and sourcing livestock and produce from ranchers and farmers who employ humane, chemical-free raising methods.
With over 1,800 locations and a market capitalization of $20 billion, Chipotle has almost single-handedly proven that sustainable food sourcing is profitable, not just an ideal.
And the company continues to find creative ways to educate and inform its customers about their mission.
Where Will You Take Your Enterprise?
Visionary CEOs hold a clear vision in mind. This alone takes courage. Then they inspire their organization to actualize that vision. This takes boldness.
Remembering that the purpose of your business is to create customers and serve them better than anyone else, where are you leading your organization?
What big problems are you going to solve for your customers? Where is no other businesses in your category willing to go? How can you redefine your industry?
THE BIG IDEA: Archetypes are a powerful and underused tool business leaders can leverage to gain market dominance, improve customer loyalty, and build stronger organizations.
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Archetypes are the secret weapon of an elite group of businesses.
Archetypes operate silently, below the surface, completely out of view of our awareness—until we shine a light on them and begin working with them in conscious and productive ways.
Here are three powerful ways business leaders can use archetypes to grow their business:
#1: Deploy Effective Advertising
Archetypes can be used by savvy business leaders, marketers, brand builders, and advertisers to associate their brands to specific archetypal images that reside in their customer’s mind.
This is unquestionably a powerful use of archetypes that every business looking for a competitive edge should employ.
The use of archetypes generally stops here, but the value of archetypes goes much deeper.
Archetypes have two additional fundamental uses that are more relevant to chief executives than any other leadership role.
#2: Uncover Penetrating Consumer Insights
Archetypes can be used to better understand your customers at a significantly deeper level.
When you know the archetypes that your customers associate to your brand, you can explore the nature of these archetypes through a process psychologists call amplification.
An archetype is amplified through mythological stories, fairy tales, and other associations to bring to life the emotions, drives, aspirations, and tensions your customers are experiencing (on a largely unconscious level).
Let’s say you figure out that one of your business’s archetypes is the Caregiver. When you think of a caregiver, what qualities come to mind? Perhaps altruism, patience, empathy, and compassion.
Which characters personify the caregiver in films? Mary Poppins. Mrs. Doubtfire. What additional qualities or attributes do these characters exhibit?
This process of amplification can provide a depth of customer insights that transcends any form of big data.
These insights can highlight specific actions you can take to move your business closer to the hearts and minds of your customers.
#3: Build a Thriving Corporate Culture
Finally, when you discover your business’s archetypes, you can use them as a homing beacon to attract a certain type of talented employee that resonates with your ethos (the characteristic spirit of your culture).
Archetypes within an organization are most often expressed in a set of core values. These core values establish set patterns of behavior by triggering archetypal images in the employee’s psyche.
Companies with thriving corporate culture like Southwest Airlines, Zappos, Amazon.com, Google, The Container Store, and Netflix have all aligned themselves with specific groups of archetypes that bring core values to life.
When this strategy is used consciously, the effects are usually extraordinary. Arguably, this is the most profound and underutilized application of archetypes in modern management.
THE BIG IDEA: When executed well, core values provide an unparalleled competitive advantage for leaders because they define a specific set of idealized behaviors they want their people to uphold.
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If you could wave a wand and magically have all of your employees behaving in certain ways, how would you want them to behave?
It’s easy to get frustrated when an employee is behaving in a manner that doesn’t support the organization—arriving late to meetings, speaking over others, or making rash decisions.
When you observe a negative behavior, you can try to correct it by calling the recalcitrant into your office and giving him or her feedback.
For this approach to be effective, the feedback needs to be well-timed (right when the undesirable behavior occurs) and consistent (more than once).
Humans don’t change their behaviors too readily or quickly. Conditioning new behaviors takes time, consistency, and patience.
How to Improve Employee Behavior
While its beneficial to train your leaders to become effective in-house coaches, when you’re heading an organization with thousands of people, the feedback approach alone cannot foster the behavioral changes you seek on a company-wide scale.
The alternative approach, used by a minute number of extraordinary business leaders, is to determine, in advance, the idealized behaviors they want their employees to embody. Then, to encapsulate these behaviors into a set of core values that permeates throughout their organization.
Now, any company can put together a list of values.
Enron, for example, listed core values in their 2000 annual report including “Respect: We treat others as we would like to be treated” and “Integrity: We work with customers and prospects openly, honestly, and sincerely.”
Obviously, listing a set of values isn’t enough.
The Behaviors and Skills Your Organization Values
Core values answers the question, “What does our business stand for?”
More than anything else, what your business stands for is defined by the actions and behaviors of your people.
The actual values of an organization are determined mainly by where it invests its resources and how its employees behave, not what the leader says or what’s posted on a company website.
Businesses that use core values to build extraordinary organizations—like Zappos, Southwest Airlines, and Netflix—take their values very seriously.
Netflix CEO Reed Hastings explains, “Actual company values are the behaviors and skills that are valued in fellow employees.”
Businesses that consciously cultivate their culture hire and promote employees who demonstrate their established set of core values. They train and enforce these idealized behaviors at every turn.
Core Values Require Specificity
To be able to hire, train, and promote employees based on a set of values, your core values need to be specific so they can be measurable.
Enron’s lofty value of integrity and its brief description sounds nice, but could a manager easily evaluate if an employee was working with customers “openly, honestly, and sincerely”? (And what about open, honest, and sincere communication within the organization? Clearly, that wasn’t valued at Enron either.)
In contrast, look at Netflix’s core value of honesty, a value similar to integrity. For Hasting’s organization, honesty means:
“You are known for candor and directness.”
“You are non-political when you disagree with others.”
“You only say things about fellow employees you will say to their face.”
“You are quick to admit mistakes.”
Can you see how these definitions make it easy for leaders to evaluate their employees and potential hires?
Core Values are the CEO’s Responsibility (Not HR’s)
Ultimately, businesses that use core values to create a unique corporate culture have leaders who embody the very same values they want their people to emulate.
Humans learn best through observing behavior, not words.
If a leader isn’t conducting herself with integrity, for example, you can be certain that the employees aren’t going to go out of their way to do so either. Research shows that employees are seven times more likely to demonstrate loyalty to leaders they believe have high integrity than to those they do not.
This suggests that chief executives must be clear on two things.
First, they must know what behaviors are necessary to move their organization towards their inspiring vision. Second, they must resolve to live these behaviors, to the best of their ability, each and every day.
This is not a small commitment. Could this explain why so few organizations succeed in creating thriving cultures with engaged employees?
SIDEBAR: Will Your Core Values Hold?
Here’s a quick checklist to test the integrity of your core values:
Does each value speak to at least one desired behavior?
Will each value help you make decisions (especially the difficult ones)?
Are your core values memorable? Will every team member be able to encode them in their minds?
Does each value represent distinct elements of your overall culture?
Will you be willing to uphold these values 50 years from now?
Are your values congruent with the behavior of your leadership team? Are these values BS-tested? Will an employee be able to observe hypocrisy?
Can your organization hold up these values in stressful and difficult situations (like increased competition, product recall, stock devaluation, or downsizing)?
Are you willing to defend these values unequivocally? That is, does each value permeate through the entire organization?
For concise instructions on how to discover your core values, click here.
We have tracked businesses with unprecedented brand loyalty since 2001. A Certified Cult Brand is a designation we hold for brands that fulfill specific market criteria, including upholding the Seven Rules of Cult Brands.
VW Beetle Quick Stats
Dr. Ferdinand Porsche (1875-1951) was the creator of the bettle
With over 21 million manufactured, the Beetle is the longest-running and most-manufactured automobile of a single design platform anywhere in the world.
Henry Ford considers buying VW, but then declined; 24 years later, Beetle would out-sell Ford Model T.
With its sealed floor pans and body, the Beetle could indeed stay afloat for several minutes, as was advertised in the Sixties.
The VW Beetle Herbie has starred in six movies.
VW Beetle Cult Brand Summary
Today the Beetle is regarded as arguably the best-selling car of all time, but back in 1948 it was unknown in the U.S., and many sales types believed no one would ever buy, partly because of its association with Nazi Germany–being dubbed “the people’s car” by Adolph Hitler–still fresh in the public’s mind.
Despite initial failures at introducing the Beetle into America, Volkswagen remained undeterred. They brought twenty Beetles to the U.S. to a private showing in New York City and then to the First U.S. International Trade Fair in Chicago. It wasn’t an overnight success, but it started to get attention from the press and generated word-of-mouth buzz.
Given the opportunity to actually see and drive a Beetle, a significant chunk of the American public soon found themselves in love with the reliable and affordable little, German car. Virtually everything about the Beetle’s design screamed it was a car like no other: its air-cooled engine was mounted in the back, not the front, like every other domestic gas guzzler of the period, a configuration that made it more adept than any U.S.-made car of the time for safe driving in rain, sleet, and snow; it’s exterior design was unique, with its egg-shaped body standing in sharp contrast to the large and sleek, chrome-covered domestic behemoths of the period. The Beetle’s appearance oozed a curious combination of personality and practicality, which quickly helped build strong affection for it among its owners.
In addition to developing a unique design (the look), Volkswagen focused on developing a unique marketing message (the say and the feel) for the Beetle. In contrast to the advertising of the Detroit automakers of the 1950s and 1960s, which was full of slick copy and boastful claims, Volkswagen’s ads for the Beetle were frank, direct, and honest. Some of the more memorable early print ads included “Think small,” “Some shapes are hard to improve on,” and the cult-branding clincher, “Do you earn too much to afford one?”
The combination of unique design elements and honest advertising became a killer combination. By the early 1960s, the Beetle became a magnet for legions of Americans who saw themselves as being different. As Bug Talesauthor Paul Klebahn summed up: “The Beetle tended to appeal to freethinkers. This was the thinking person’s car. Instead of saying, look how much I paid for my car, it was look how much I didn’t pay!”
When Volkswagen launched the New Beetle in 1998, they made a conscious decision not to show any drivers in its ads. They wanted their funky-shaped and lovable car to be the center of attention, not an actor or actress. “In the New Beetle’s initial advertising, we never included people in the ads because we didn’t want a person to say, ‘Oh, that’s who drives a Beetle,'” explained Steve Keys, Director of Corporate Communications. “We wanted you to be able to say, ‘I can see myself in that car.'”
It was a good move: everyone from teenagers buying their first car to aging baby boomers hoping to recapture their youth purchased the car. Volkswagen benefited from not shrinking its potential audience of buyers: No one had trouble seeing themselves behind the wheel of a New Beetle.
1933 – Dr. Ferdinand Porsche (1875-1951) draws first sketches of a simple little car that even the most common of citizens could own and enjoy on the autobahns.
1934 – Adolf Hitler commissions Porsche to develop the KdF-Wagen (“Kraft durch Freude” or “Strength through joy”), forerunner of what we know today as the Beetle.
1936 – At Berlin Auto Show, Hitler announces that Porsche will design “the People’s Car;” Porsche promises Hitler he will produce three prototypes by year’s end.
1937 – First road test on prototypes
1938 – Thirty prototypes (called Series 30) completed
1939 – May 28: Ceremony commemorates laying of cornerstone of VW factory at Wolfsburg (would later become largest auto factory under one roof)
1940 – KdF-Wagen appears at Berlin Auto Show. Germany goes to war.
1942 – German army vehicles Kubelwagens built; German amphibious army vehicles Schwimmwagens built
1944 – Allied bombs destroy more than 2/3 of Wolfsburg factory 1945 – May: World War II ends. British forces take control of Wolfsburg area. Porsche interrogated by Allied Forces for his alleged connections to Nazis. Porsche is cleared, but then imprisoned in France with son Ferry for two years.
1946 – 1,785 cars constructed, mostly by hand; used as army light transport
1947 – Wolfsburg produces 19,000 cars; exported to Holland. Two hand-made convertibles constructed.
1948 – 20,000th Beetle produced. Beetle modified into convertible.Henry Ford considers buying VW, but then declines; 24 years later, Beetle would out-sell Ford Model T.
1949 – January 17: First Beetle bought in USA by Ben Pon. Max Hoffman becomes first importer.
1950 – 100,000th Beetle produced. 1,000 convertibles produced. Porsche celebrates 75th birthday; finally visits Wolfsburg plant; cries when he sees Beetles on Autobahn… his dream becomes reality.
1951 – January 10: Ferdinand Porsche dies.
1952 – First official gathering of Beetle owners. Canada imports its first Beetle.
1955 – April: VW of America formed. 1,000,000th Beetle produced.
1953 – 500,000th Beetle produced. VW plant opens in Sao Paulo, Brasil.
1957 – 2,000,000th Beetle produced
1959 – 3,000,000th Beetle produced
1960 – 4,000,000th Beetle produced
1961 – 5,000,000th Beetle produced
1962 – VW of America headquarters at Englewood Cliffs, NJ, dedicated. 6,000,000th Beetle produced.
1963 – 7,000,000th Beetle produced
1964 – 8,000,000th and 9,000,000th Beetles produced
1965 – 10,000,000th Beetles produced
1966 – 11,000,000th and 12,000,000th Beetles produced
1970 – Last year convertible Beetle in standard format is available (only convertible Beetles in Super Beetle format are available). Super Beetle produced.
1972 – February 12: 15,007,034th Beetle rolls off assembly line,breaks Ford Model T record for total production.
1974 – June: 11,916,519th Beetle produced at Wolfsburg rolls off assembly line, signaling the end of Beetle production at Wolfsburg plant.
1975 – Last year for Super Beetle production
1977 – Last year for standard Beetle in USA; only Super Beetle convertibles remain.
1978 – At Emden VW plant in Germany, last official German-built Beetle rolls off assembly line
1981 – 20,000,000th Beetle produced (in Puebla, Mexico)
1998 – Production model of New Beetle unveiled at Detroit International Auto Show
1999 – New Beetle turbo available to US dealerships
2003 – July 30: Last Beetle (21,529,464th!) rolls off assembly line (in Puebla, Mexico)
2012 – New VW Beetle design is unveiled at the New York Auto Show.
THE BIG IDEA: Considering the staggering amount of time CEOs spend in meetings, investing time in improving meeting effectiveness is prudent for any outperforming leader.
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Management guru Henry Mintzberg was one of the first researchers to provide a glimpse into the daily lives of CEOs.
Mintzberg followed a handful of business leaders around the office for his Ph.D. thesis at MIT Sloan. His primary observation appears obvious: CEOs go to a lot of meetings. Roughly 80 percent of their work hours are spent in meetings.
That was over four decades ago. A more recent study by Oriana Bandiera of London School of Economics and colleagues had the personal assistants of 94 CEOs provide detailed time sheets over a pre-specified week.
The results were similar to Mintzberg’s observations: 85 percent of the CEO’s time was spent working with other people through meetings, phone calls, and public appearances.
Why CEOs Need Meetings
Meetings dominate a CEO’s day because personal interactions provide valuable information critical to effectively running an organization.
Harvard Business School professors Michael Porter and Nitin Nohria argue that the ability to extract critical details needed to inform big decisions from employees is partly what defines the most effective CEOs.
Meetings also provide CEOs with an opportunity to communicate what they think is vital for their teams to know.
The Dark Side of Meetings
Another management guru, Peter Drucker, had strong views about meetings. He wrote, “Meetings are by definition a concession to a deficient organization. For one either meets or one works. One cannot do both at the same time.”
Or, as economist John Kenneth Galbraith said, meetings are “indispensable when you don’t want to do anything.”
The problem is two fold. First, we have too many meetings. Second, too many of them are unproductive.
12 Tips on Conducting Effective Meetings
Your goal, of course, isn’t to eliminate meetings, but to optimize their effectiveness as well as reduce their duration and frequency whenever possible.
Here’s a list of 12 ways to help you master the art of conducting effective meetings:
Clarify the purpose of the meeting when it’s scheduled. Request that participants come to the meeting prepared in advanced.
Clarify the objective of the meeting at its start. Every meeting should have purposeful direction.
Be mindful of meeting duration. Many 60-minute meetings can be done in 30 minutes. Many 30-minute meetings require only 15 minutes.
Start meetings on time regardless of who is late.
Reward the behavior you seek: Don’t invest time in reviewing meeting content with latecomers. Doing so rewards tardiness and penalizes timeliness.
Evaluate who really needs to attend each meeting. The more people, the more challenging it is be productive.
Avoid holding meetings for informational purposes; that’s the proper function of digital communication.
Elect a meeting moderator responsible for guiding the discussion toward the desired end goal. Don’t let specific participants dominate the meeting with endless conversation.
Whenever possible, end meetings early. The extra time can create a positive experience for participants.
Reduce distractions by closing the door and requesting that members do not use their phones during meetings.
Ask participants distracted with things unrelated to the meeting to leave. A meeting should be an active dialogue with all members involved.
End every meeting with a committed action plan.
Each of the above suggestions can greatly improve the quality, effectiveness, and results of your meetings.
A Bold Experiment: Cut All Meetings in Half
If you’re intrigued and brave enough, commit to cutting the duration of every meeting in half. Try this experiment over the course of the next two weeks and observe the results.
If you’re like many of our clients, you’ll find that you accomplish just as much. More importantly, you’ll discover a reservoir of free time that can be invested in more important matters.
If you have a clear objective, the shorter the meeting, the more focused the attention and the better the outcome.
THE BIG IDEA: Today’s article asks executive leaders to take a step back and evaluate their business with some big questions that underlie the foundation of their enterprise.
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If you were asked by someone to define your business, how would you answer?
Would you explain what services you provide?
What products you manufacture or sell?
What makes you different from your competitors?
Management guru Peter Drucker suggests that there is only one true way to define a business: by the want the customer satisfies when she buys a product or a service from you.
Satisfying the customer’s want is the purpose of every business.
What Business Are You In?
How, then, do you answer the question: “What is our business?”
You look at your business from the outside; you take the customer’s and the market’s viewpoint.
Drucker explains: “What the customer sees, thinks, believes, and wants, at any given time, must be accepted by management as an objective fact and must be taken as seriously as the reports of the salesperson, the tests of the engineer, or the figures of the accountant.
“And management,” Drucker continues, “must make a conscious effort to get answers from the customer herself rather than attempt to read her mind.”
Drucker wrote this in Management: Tasks, Responsibilities, Practice, originally published in 1973. Over four decades later, his words are just as relevant—and just as often ignored.
How to Define Your Business
To more precisely define your business, Drucker offers two powerful questions:
Who is the customer?
What is value to the customer?
The first question is a master work in itself. How deep you go in defining your customer is an indication of your commitment to serving your customers. Last month, we offered seven customers insights we feel every CEO should investigate.
The second question is very important too. Most business leaders may be certain they know the answer, but, Drucker points out, they are almost always incorrect.
Why? Because business executives tend to define value based on what they perceive as value.
What Do Your Customers Value?
“The customer never buys a product,” Drucker writes. “By definition the customer buys the satisfaction of a want. He buys value.”
For a teenage boy who buys a pair of Vans shoes, that value might be identification with a subculture.
For a 35-year-old mother shopping at Target, that value might be fashion and convenience.
For a 55-year-old executive ordering on Zappos, that value might be breadth of selection.
Different customers value different things. Drucker points out that the question of value is so complicated that management shouldn’t even try to guess the answer.
THE BIG IDEA: Supporting behavioral change in employees and customers becomes possible when you understand what motivates human beings to change and why change usually doesn’t happen.
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Tom is a highly talented employee with an impressive CV. He had the precise skills and past experiences you were looking for when you brought him on board. His management position is key for your organization’s strategic direction.
But Tom, you later discovered, has trouble managing his emotions. He has a bad temper and has been known to yell in meetings. He has a persistent habit of aggravating his team members.
The recruiting process was long and costly to hire Tom. You don’t want to start that process over, but something’s gotta give. What do you do?
How Do You Inspire Positive Change?
One of the greatest challenges chief executives face is the management of large numbers of people.
Humans are complex creatures. While we seek organizational order, the reality errs toward chaos. As such, managing conflict among key team members is invariably a prominent, consistent, and challenging task for chief executives.
How do you attempt to persuade others to change? We often try to change people’s behavior by appealing to reason and logic. We provide a sound argument why a desired change is beneficial.
Does it work?
All physicians know that being overweight is bad for their health. Yet, aren’t there many overweight physicians?
You can try telling Tom that if he doesn’t change his behavior and get his emotions under control, that you will have to let him go.
Even if Tom wants to stop his poor behavior, however, this argument isn’t likely to lead to change. Why not?
The Secret to Creating Change
Rational arguments and logic appeal to our prefrontal cortex, our thinking brains. But before logic and reason can influence us, the limbic system—our emotional brain—must first be engaged.
The overweight physician knows that being overweight is harmful to his health. His thinking brain has all of the information he needs to make a rational decision to change.
But where’s the emotional drive? If he’s able to associate being overweight with not being alive to see his granddaughter grow up, for example, he may become sad or angry. These emotions can potentially help motivate him to change his behavior.
Tom is likely aware of the damaging effects of his poor emotional management. That is, his thinking brain knows there’s a problem. The key is to find a way to trigger an emotional response associated with the desired change.
Change is made possible when we evoke our emotional center first. We change when change is meaningful. Meaning is rooted in feelings, not thoughts.
Three Steps to Creating Change
So how can you inspire Tom to change his behavior?
You can paint a picture that highlights the cost of his continued behavior in his performance, his work relationships, and his uncertain future in the company.
In short, you can agitate him. Agitation can lead to action.
You can also inspire him to a new view of his potential: How would it feel to have better control over his emotional reactions? When he triumphs over this behavioral problem, what will it give him? How much more energy and enjoyment might he discover in his work and personal life?
Finally, what changes can be made to his environment to help make the change stick? Perhaps he can commit to a 3-minute breathing exercise before going into every meeting. Maybe everyone in the meeting can do the exercise together.
To recap, if you want to inspire behavioral change:
Step 1: Tap into the emotional center. Help the person feel the cost of not changing and the benefits to changing.
Step 2: Provide specific actions on the path to change.
Step 3: Set up the conditions in the environment necessary to support the change.
These Same Steps Apply for Your Customers Too
Your customers don’t make decisions based on reason alone. Customers, like all humans, have a healthy dose of irrationality. We are emotional creatures.
Remember: feelings come first; reasons come second.
It is because of this fact that aesthetics, design, storytelling, images, and other facets of branding are so critical for attracting customers.
Our emotional center is moved by beauty, not words; feelings, not logic.
When we first move people through emotions and then lead them with specific directions, positive change is always afoot.
