Susan is the CEO of a national chain of fashion apparel department stores. David is the CEO of a competing brand.
Both Susan and David have been at the helm for five years. Accomplished and talented professionals, they have each earned their positions. Sharp-minded and effective executives, they are capable of leading with vision.
Although each business has its strengths and weaknesses, Susan and David’s national operations both own a comparable share of the market.
Susan’s company, however, has begun outperforming David’s at an accelerating rate.
Why?
Analyzing their businesses to find the differentiating factor proves fruitless. Both are managed by competent people. Both know how to select desirable merchandise. Both know how to create customers.
The difference lies within the minds of these two leaders: their orientation toward themselves and others.
Capitalizing on the Feminine Function
David is a quintessential analytical thinker. He runs his business by the numbers. His focus is mainly on generating the next transaction. He’s an excellent merchant.
Susan also has strong analytic capacities. She understands the importance of customer data. But she pays more attention to her feelings and intuitions.
These qualities might have appeared to be undesirable or weaknesses not too long ago.
Some people certainly tried to use them against Susan earlier in her career. But she’s the CEO now. Her authority and successful track record speak for itself.
Susan has high emotional intelligence that affords her higher self-awareness, superior management of her emotions, deeper empathy, and stellar social skills.
How do these qualities give Susan the edge?
Utilizing Emotional Intelligence in Business
Put simply, Susan is more connected with her humanity. She brings more heart, care, and compassion into the workplace.
With greater empathy, Susan is better equipped to understand her team. She is able to resolve difficult conflicts effectively. She is also able to establish trust and cultivate creative teams.
More than that, she holds a different perspective on her customers. She knows that her customers are people too. They have dreams, aspirations, problems, and needs, just like her and her employees.
Instead of fighting for the next transaction, Susan’s marketing team focuses on making meaningful connections with their customers. Emotion is a regular topic of conversation around the office.
She has moved her organization toward relational marketing. She’s not afraid to sacrifice short-term margins to build long-term customer loyalty. This approach leads to more repeat business, a larger share of wallet, and positive word of mouth.
Learning from the Feminine Powerhouses of Business
This is the power of the feminine. We say, feminine and not “women” because the feminine is a quality available in both men and women.
Female executives like Virginia Rometty at IBM and Mindy Grossman at HSN are examples of leaders who exhibit a strong integration of masculine analytics and feminine awareness.
Southwest’s founder Herb Kelleher and Zappo’s CEO Tony Hsieh are beautiful examples of men who integrated the feminine function into their businesses with extraordinary success.
Kelleher built an unusual airline business driven by caring and relating. Hsieh built an online retailer devoted to spreading happiness and making the organization feel like a family.
Any time you talk about company culture, corporate values, branding, communication, collaboration, or teamwork, you’ve entered the realm of the feminine.
The masculine function gives us analytical thinking, logic, and reason. The feminine function gives us intuition, feeling, and relating. Both sides are important; both provide vital information to help us make sense of the world around us.
And both the masculine and feminine function are necessary for being an outperforming leader.
Our first stories were drawn on cave walls. We started sharing stories even before we developed language.
Humans have been obsessed with stories ever since.
Stories teach us. They bring order to our lives. In many ways, story define who we are. Stories give us meaning.
Marketers and advertisers have learned that storytelling is a powerful medium for engaging and moving customers. Brands like Coke and Apple are masterful at winning the story wars with their competitors.
But the power of stories goes even deeper.
Stories hold the key to uncovering penetrating insights about your customers. These insights can help you not only generate sales, but build lasting relationships with your customers.
Our Brains Love Story
If you asked the average person why we love stories—in novels, films, or TV—she will likely point to escapism. Stories help us momentarily escape from the challenges and stresses of our lives.
But neuroscience reveals a different truth: if you observe a person’s brain as he watches a story in an fMRI machine, you’ll see that his brain doesn’t look like a spectator, but like a participant.
Even though we know stories aren’t real, the unconscious parts of our brains process them as if they are real.
Stories hook us because our brains make us experience what’s happening in the story.
The Grand Narrative of Storytelling
The great scholar Joseph Campbell loved stories so much that he made studying them his life’s work. His field is called comparative mythology.
He studied the stories of cultures around the world, from different periods in our evolution, spanning thousands of years of storytelling.
While most of his contemporaries focused on the differences between each culture’s stories, Campbell focused on the similarities.
He found many such similarities in various stories from around the world. He encapsulated these similarities in what’s become known as the monomyth, or the hero’s journey.
The Hero’s Journey
The hero starts out in an ordinary world before venturing into a special world.
He meets friend and foe. He undertakes quests. He faces challenges.
Winning a decisive victory, realizing his final goal, the hero returns from the adventure, transformed, bearing wisdom and new powers from his journey.
This hero’s quest is age old. It can be observed in many religions including the stories of Gautama Buddha, Moses, and Jesus Christ.
To better appreciate the commercial power of the monomyth consider: It’s the formula for every modern epic adventure including Harry Potter, Lord of the Rings, The Matrix, and Star Wars.
George Lucas, a good friend of Campbell’s, modeled the original Star Wars film precisely around the monomyth structure Campbell provided in his A Hero with a Thousand Faces.
Adjusting for inflation, Star Wars is the second highest grossing film of all time domestically (behind Gone with the Wind). The Star Wars franchise accounts for four of the top twenty highest grossing films of all time.
No wonder The Walt Disney Company announced the release of the sequel trilogy as soon as it purchased LucasFilms in 2012. Star Wars: Episode VII will be released in December 2015.
Why is this monomyth so powerful and pervasive in ours and many other cultures? Why is this structure so effective in storytelling?
Remember that when we engage in story, our brains make us participants, not spectators.
The hero’s journey is ultimately about us. And we are fascinated with ourselves.
We identify with the hero, the protagonist, in the story. We are the hero in our own life adventure.
And your customers are the heroes in their own adventures too. They have their own stories to live and tell.
Your role is to support them in their quests, to provide aid when needed.
To do this effectively, you need to know what fuels the adventure.
The Primary Ingredient Behind Every Hero’s Journey
Compelling stories come down to one thing: problems.
The protagonist faces a problem and tries to overcome it. This is the essence of drama and the key to good storytelling.
Without problems, without troubles and tensions, there’s no story. There’s nothing to engage us.
The hero must face his problem, surmount his fear, resolve his tension.
Great Businesses Help Their Customer’s Win Victories
What’s your customer’s primary tension in relation to your brand, products, or services?
How can you help your customers win a decisive victory in their own lives?
Apple helps their users win the war against the mundane, arming them with tools for creativity and self-expression. Many humans are starving for this.
Nike helps its customers transform into warriors, allowing them to improve their physical conditions and master themselves.
Harley-Davidson helps free its riders from the tyranny of an oppressive, conventional world, if only for a Saturday ride.
Star Trek helps trekkies embrace a utopian, futuristic society, free from the insanities of mankind’s current stage of development, if only for a weekend convention.
Brands like Oprah and The Life is good Company counteract widespread pessimism and negativity with optimism and hope.
The Key to Penetrating Consumer Insights
The purpose of consumer insights is to understand the role your business plays in the lives of your customers.
Your goal is to understand their desires, motivations, emotions, and beliefs that trigger their attitudes and actions.
To accomplish this difficult task, decode your customers’ stories. Learn the adventures they are on and the tensions that drive them.
If you do, you’ll be better prepared to provide vital aid on your customers’ quests and become an unlikely ally to them.
And if you do, you’ll win a special place in their hearts and minds.
Over seventy years ago, Abraham Maslow asked a great question.
While most psychologists of his era were focused exclusively on diagnosing and treating mentalillness, Maslow inquired:
What does mentalhealth actually look like?
This single question led to a new understanding of what it is to be human: what motivates us, how we grow, and what we experience when we’re at our best.
Maslows’ insights, when effectively applied to your organization, can improve the overall health of your business. It can, in turn, provide you with an unusual competitive advantage.
Let’s see how it works …
Satisfy Your Basic Human Needs
Maslow observed that all humans have a set of basic needs: biological, safety, belonging, and esteem. (You’re probably familiar with his hierarchy of human needs.)
He called these basic needs deficient needs because, in their absence, we feel like something is missing.
For example, when we don’t feel safe, we don’t feel like ourselves. Something feels off. We will go to great lengths to satisfy our unmet need for safety.
We all want to feel safe. We all want to feel connected to others. And we all want to feel good about ourselves.
Much of our daily behavior is driven by our pursuit of meeting these basic needs.
Satisfy Your Higher Human Needs
But here’s the thing: once you satisfy your basic needs in a healthy way, you can turn more of your attention to higher needs.
Higher needs include:
Cognitive (meaning, knowledge, and self-awareness)
Aesthetic (beauty, form, balance)
Self-actualization (personal growth and development)
Transcendence (spiritual values)
All of these needs are human too.
Maslow called these needs Being values because they motivate and inspire humans to grow and reach their fullest potential.
Consider which of the following Being values are important to you:
Truth
Completion
Goodness
Justice
Beauty
Simplicity
Wholeness
Richness
Aliveness
Effortlessness
Uniqueness
Playfulness
Perfection
Self-Sufficiency
Satisfying your higher needs is important because it helps you live a more enriching, meaningful life.
It’s why we do certain things even though they are “unproductive.” For example, go to museums, play musical instruments, and read challenging books.
Harness the Power of Loyalty
Every business helps satisfy at least some of their customers’ basic needs.
A retailer like Walmart, for example, provides a safe environment to shop; products and apparel to make their customers feel good about their self-image; and hopefully, clean bathrooms (to satisfy those all-important biological needs).
But some businesses go further.
In 2000, when BJ Bueno began studying Cult Brands—businesses with hyper-loyal customers like Apple, Star Trek, and Harley-Davidson—he noticed that they all share something in common:
Apple, for example, plays to intelligence, beauty, creativity, and self-expression.
Harley-Davidson and Star Trek bring out aliveness and playfulness; they support customer communities that celebrate lifestyles filled with youthful fantasy and adventure.
Supporting and celebrating specific higher needs for your customers helps you differentiate your brand from your competitors. But it goes deeper than that.
Your customers have difficult lives (just like you). If you can help them satisfy their basic and higher needs, imagine how much they will appreciate you.
This appreciation leads to loyalty.
Support Higher Needs Within Your Organization
Successful businesses like Southwest, Google, Zappos, The Container Store, and Netflix tap into basic and higher needs not just for their customers, but for their employees.
These organizations don’t just create jobs; they attract talented people looking for vocations where they can find greater meaning in their work.
They accomplish this feat, in part, by establishing core values and creating a culture that embraces specific higher needs.
For example, Zappos has a core value, “Pursue growth and learning.” This hits on a cognitive need. They support this value by maintaining the Zappos Family Library that offers free books to their employees.
Google’s culture pushes their employees toward self-actualization. They maintain values like, “It’s best to do one thing really, really well,” and “Great just isn’t good enough.” One way they support this value is through their Search Inside Yourself program that teach employees how to meditate to gain better focus and improve their emotional intelligence.
(For a comprehensive guide on establishing core values for your organization with over 100 examples, click here.)
Embrace Your Own Higher Needs First
The truth is that you can’t effectively support higher needs in others if you’re not first satisfying them in yourself.
This doesn’t make you selfish; it makes you human.
The reverse is also true: the more internally “full” and rich you feel from satisfying your higher needs, the more you’ll be able to give to others.
Maslow found that expressing higher values by satisfying our needs for things like meaning, knowledge, beauty, growth, and spiritual values is a sign of mental health.
It makes us more fully human. It makes us better leaders too.
Sarah is two months into her new role as CEO of a fast-growing company in the casual dining market.
At least, it was fast-growing until recently.
The founder of the enterprise built his business by using only natural, GMO-free ingredients and providing a fast, comfortable dining experience.
The company achieved high double-digit growth for five straight years, had a successful IPO, and continued its aggressive growth trajectory.
Then the market tanked. And the restaurant chain’s higher-than-average prices became a major factor for many of its customers.
Trouble within the organization began bubbling to the surface.
Sarah was brought in as the first external CEO to adjust to the new market conditions and align the organization with a clear vision.
Two Common Problems in Virtually Every Organization
After accessing the situation, Sarah saw two major issues she needed to address immediately.
First, while her management team were all talented professionals, they were each working in different directions.
With the company’s prior rapid growth, the founder failed to keep the leadership team aligned to a unified vision. Instead, each department head had his or her own agenda.
Sarah had, first and foremost, to rally the troops under one banner.
Second, not all of the department heads worked well with each other. In fact, the more Sarah examined interpersonal dynamics in the office, the more internal conflicts she saw in her leadership team.
Will she be successful in guiding this company to a profitable future?
To turn things around, Sarah needs to be skilled in two key areas. These two areas, research shows, greatly define outperforming leadership.
How to Move People
Anyone can give orders, but only a skilled leader is able to positively influence others. The role of the leader is to move people, to inspire positive action in a desired direction.
A leader has a vision. She sees the potential of what the enterprise can become. Her job is to infect her organization with this vision, to sell the vision and excite consistent action.
And the vision isn’t sold unless the employees themselves are inspired to realize the vision. This is no easy task.
More than anything else, the key to moving people requires the ability to see the world from the perspective of others.
Perspective taking allows you to see the world from another’s viewpoint and speak to them from this viewpoint.
Luckily, perspective-taking is a skill that can be learned. (There’s a quick 2-minute practice at the end of this article.)
How to Handle Conflict
The second major area is conflict management.
Many leaders struggle in this area. A 2013 Stanford University Executive Coaching Survey of over 200 CEOs illuminated that handling conflict is the single biggest area for personal development. Interestingly, another recent leadership report highlighted a creative approach some companies are taking to build team cohesion and reduce internal tensions: they organize team-building events featuring interactive gaming experiences from top sweepstakes casinos, effectively using friendly competition and collaborative play to encourage open communication.
Conflict resolution requires leaders to use empathy. Empathy is the ability to understand and share feelings of another person.
The topic of empathy has received a great deal of attention in leadership literature from the work of psychologist Daniel Goleman, among others.
Goleman has found that emotional intelligence is THE key factor in outperforming leadership. Empathy is a core facet of emotional intelligence.
While perspective taking relies on our cognitive abilities, empathy engages our feelings.
Interpersonal conflicts cannot be resolved by “thinking through the problem” because the source of the conflict resides in our feelings (not thoughts).
While perspective taking allows us to see the world through another’s eyes, empathy allows us to feel the world through another’s body.
Everyone’s level of empathy varies, but empathy is also a skill. And therefore it can be trained. Goleman offers five steps to rewire your brain for emotional intelligence in this Harvard Business Review article.
And if you want to go deeper, we highly recommend going through Google’s Search Inside Yourself video curriculum and following the exercises.
Using the research of neuroscientists and psychologists (including Goleman), Google developed a highly popular program to train their executives on how to increase emotional intelligence and become better leaders.
How These Two Skills Help You Serve Your Customers Too
Being able to take the perspective of others and to feel what they feel are vital skills for leading and managing an organization or team. But the benefits go further.
An IBM study with over 1,700 CEOs and other leaders showed that engaging customers as individuals is a top priority.
How better to engage your customers as individuals than to take their perspective and feel what they feel?
These skills will not only help you align your organization and resolve interpersonal conflicts, it will open the doors to the hearts and minds of your customers.
Combined with big data, interviews, focus groups, surveys, and other market research methods, applying these skills can enable you to understand your customers as unique human beings. It will help you unearth authentic consumer insights.
Who would have guessed that the battle for customer engagement could be won through the effective use of perspective taking and empathy?
SIDEBAR: How to Build Your Perspective-Taking Ability
Learn to take the role of others:
Decide whose perspective you’re going to take. It could be an employee, a board member, a peer, a customer, or a family member.
Allow yourself to be curious and let go of wanting to judge this exercise.
Imagine that you are this person. As fully as you can, step into their point of view.
Look out at your environment. What does it look like? What do you notice? What do you see? What do you think? What do you believe?
Maintain this perspective for two minutes. To help integrate what you’ve learned, invest a few minutes reflecting on the experience: What did you learn about the other person? What did you learn about yourself? Did you pick up a new perspective?
Follow this procedure at least twice per day until perspective taking becomes effortless.
How do the world’s top brands create loyal customers?
It’s a question our small firm has invested long hours to answer.
Deciphering the code to undying, raving fan customer loyalty unlocks powerful strategies for market domination and long-term profitability.
Cult brands are businesses that have communities of customers that rally around them. In over a decade of research studying Cult Brands, we’ve unearthed seven specific rules they all follow.
Cult Brands don’t just follow these principles, they live them. They work hard to honor them in everything they do.
What are the seven coveted principles of Cult Brands?
If you enjoy it, please share it around the office.
Tobacco. It’s one of the most addictive substances on the planet.
Back in 1987, smokers were first told that it is easier to give up heroin than cigarettes.
Today, the CDC reports that nearly 20% of American adults smoke. Nearly one in five. That’s pretty bad.
In Thailand, the numbers are worse: 27% of the entire Thai adult population smokes and 46% of adult men. That’s nearly every other guy you meet!
Thailand’s government is very interested in reducing the numbers of people who smoke. They used a video campaign that draws on one of the most important psychological forces that influences people’s behavior: cultural narratives.
Every Cultural Narrative Holds a Tension
The video begins with images of people standing outdoors, smoking. A small child, not even yet into his teens, asks for a light.
In every instance, the adults refused to light the child’s cigarette. In fact, the vast majority of the adults went on to tell the child why they shouldn’t smoke at all.
One woman told the child how cigarettes contained insecticide, while another man talked about diseases associated with smoking. Still another man talked about not being able to play and have fun if they smoked.
All of these adults, the ones who are refusing to light the child’s cigarette, are sharing a contemporary cultural story with them.
In this narrative, tobacco plays the ultimate bad guy.
Cultural Narratives are Alive Within Us
The adults take on the role of wise adviser or guru in this tale. It’s their job to prepare the child with the warnings and wisdom they’ll need to prevail over the looming peril of addiction.
When we watch the adults telling this cultural tale, we see that they’re really invested in telling the story. They feel compelled to not only share this story, but to share it in the most effective way possible.
Think about the man who talked about the child not being able to play any more.
He doesn’t tell this kid, “Someday you’ll experience decreased cardiac function if you keep this up!” Or “In 30 years, you won’t even be able to think of taking the stairs!”
These statements would be meaningless to the child.
Instead, the adult focused on the benefit that would matter most to the child. He did this intuitively and automatically, reacting to the child’s request within seconds.
Connect with Your Customers Through Cultural Stories
This is a powerful demonstration of the power cultural stories have upon us. These narratives surround us, making up the subtle cultural background of our lives.
The role of the cultural story that smoking is bad, especially for children, is so pervasive that these adults felt compelled to reinforce the narrative—even though they were smoking at the time!
As business leaders, we need to understand which cultural narratives affect our customers the most. We also need to know how our customers see themselves in relation to that cultural narrative.
After hearing the adult’s reasons for refusing them the light, the children handed the adults a note, and then quickly left.
The note read, “You worry about me, but why not worry about yourself?” along with a helpline number.
Many of the adults threw their cigarettes away. All of the adults retained the brochure. The helpline experienced a 40% increase in calls.
Empowering Your Customers as Heroes of their Adventure
In Thailand, as in much of the world, the cultural norm is that we tell instructional, moralistic stories mainly to children, not vice versa.
By placing the child in the counter-intuitive role of the wise adviser, the subconscious mind of the recipient and the viewers are shocked into a new state of awareness and receptivity.
The adult who was not aware they were being taught, find themselves overwhelmed by the wisdom of the lesson they received.
This cognitive shift is accompanied by the realization that one’s role in relation to the cultural story has changed.
The adults who were, in the first version of the tale, the wise adviser, can now see themselves in the child’s role: as the hero-in-training, preparing to fight off tobacco’s addictive powers.
The call to be a hero can transform a life, especially if it comes at the right time. We don’t know how many of those helpline calls resulted in someone giving up cigarettes for good, but we feel safe in saying that it’s more than a few.
Understanding the subconscious mind and leveraging that understanding to create effective messaging can do amazing things.
If this knowledge can be used to break consumers free of one of the most addictive substances on the planet, what can it do for your business? That’s something well worth thinking about.
Virtually all C-level executives are smart. Cognitive intelligence alone, however, is not a good indicator of leadership effectiveness.
When was the last time you checked in on your leadership effectiveness?
I’m not just talking about the objective performance of your organization or department; I’m referring to the more subtle, subjective qualities that are often more difficult to measure.
Research by psychologist Daniel Goleman suggests that emotional intelligence is the differentiating factor in outperforming leaders. Think of emotional intelligence as your ability to relate to other people.
It makes sense when you think about it: Your ability to relate to others impacts how much influence you have on others, how well you manage relationships, and even how well you manage yourself.
Evaluating Your Leadership Effectiveness
So here’s an exercise, if you’re game.
Perform an informal evaluation of your organization or department.
But before you can do this, you need to step outside yourself and put on a different hat. Imagine that you’re an outside consultant or a perhaps stealth ninja—whatever works for you.
Adopt what’s called a Beginner’s Mind where you have no preconceived notions. Look on your organization with a fresh pair of eyes.
Now, what do you see?
Here are a few questions to assist you in your evaluation:
What is the overall level of trust among employees? High? Average? Low?
Can you observe open, honest dialogue in meetings and around the workplace?
Do you feel a sense of camaraderie? Do people look like they want to be where they are?
Do you have reason to believe that the executives and employees have a sense of purpose in their work—that what they do matters?
How much fear can you observe? Are people more open or walled-off? Are they collaborating with one another or are they mainly operating in silos?
Are individuals focused on supporting the actualization of organizational and departmental results? Or are they predominantly focused on climbing higher on the corporate food chain?
Do you get a sense that individuals show genuine care for one another, the organization, and the customers that give the business its existence?
All of these questions speak to mindful leadership. They each reveal a dimension of the organization’s overall health.
Assessing Leadership Performance
Now return to your role as a leader of the organization. How did you do?
If the results of this performance review weren’t stellar, fear not. The fact that you can be honest about that demonstrates another quality of effective leaders: humility.
There’s always significant room for improvement. What’s important is that we stay conscious of these factors and continuously find ways to develop our abilities.
Without conscious attention, these factors head toward the lowest common denominators, none of which support a thriving, collaborative, and profitable enterprise. Creating a truly inspired organization takes conscious effort.
Leading Toward a Common Vision
Your first objective is to look at what’s really there. Be radically honest with the human dynamics you observe.
But then see the potential: How can the way people communicate and exchange ideas in your organization be improved? How can you foster an environment where a group of talented humans, aligned to a set of shared values, work together toward a common vision?
After all, that’s the role of a visionary leader: To see what others don’t, and to guide the organization to a compelling vision. It always starts with vision.
Our team was discussing last week’s mammoth post on core values, reflecting on how core values became such an integral component of what we do. As a marketing consulting firm, we certainly didn’t start out emphasizing the importance of “values” in business.
But having spent over a decade studying and analyzing a unique breed of companies that have an uncanny way of attracting and retaining loyal customers, the topic of values became unavoidable.
The Link Between Cult Brands and Core Values
As you know, we call these companies Cult Brands and we call their loyal customers Brand Lovers. We think Cult Brands are special, both from a humanistic as well as a business perspective.
Three reasons for their specialness stand out:
Yes, Cult Brands tend to be highly profitable businesses. Just look at Apple, Southwest Airlines, and IKEA for prime examples.
But they also create a meaningful, emotional connection with their customers. They appear to care more and to invest in the customer relationship in ways that don’t clearly translate to increased revenue in the short run. Take, for example, Harley-Davidson’s investment in supporting HOG or in MINI’s investment in Takes the State.
Finally, Cult Brands find ways to build unique, supportive corporate cultures. Companies like Amazon, Google, Apple, Netflix, Zappos, Southwest, and The Container Store all have distinct cultures that attract good, talented people that help shape their brand.
We believe all three of these elements are related; they are all important. Profit is a consequence of creating an emotional connection with your customers and fostering a unique culture that stands for something meaningful to its employees.
Establishing core values, as we saw last week, is a critical part of cultivating your culture.
It’s interesting to note that many (but not all) of these companies emphasize a focus on their customers in at least one core value. For example:
Google: Focus on the user and all else will follow
Zappos.com: Deliver WOW Through Service
Whole Foods: We satisfy, delight and nourish our customers
Amazon: Customer obsession
Zipcar: Obsess about the member experience
Ritz-Carlton: I build strong relationships and create Ritz-Carlton guests for life
With the exception of Whole Foods, all of these customer-focused values topped their respective lists (for Whole Foods it was #2). This isn’t to say that a customer-centric company must include a customer-forward core value; only that they do seem more likely to do so.
Consider how powerful it is to have a core value—one of your organization’s foundational principles that you live and breathe every day—centered on your customer. This means that every person in your organization, from top-level executives to your front line workers, knows that their customers are important.
The employees understand that their behavior and decisions must be in alignment with their customers’ best interest. They realize that the company that employs them places a special emphasis on serving their customers.
Numerous studies show that outperforming CEOs place an incredibly high degree of emphasis on obsessing about their customers. The above examples are certainly consistent with these findings.
Remember, core values reflect the idealized beliefs, attitudes, and behaviors of an organization. It’s one thing to establish a core value for your enterprise; it’s quite another to actualize it throughout your organization. To make any core value stick requires a great deal of consistent effort on the part of leadership.
Creating a distinct, collaborative culture is a challenging task for today’s chief executives. Cultivating a culture that is also customer-forward, however, is where the magic happens.
P.S. Thank you for all of your responses to our brief survey last week. We’ll soon be announcing a leadership workshop for executives interested in getting more obsessed about their customers. Stay tuned!
Our firm uses core values to help companies attract more profitable customers. Over time, we’ve discovered that our readers are predominantly inspired leaders. Core values play a major role in inspired leadership.
BJ Bueno joined Life is good CEO Bert Jacobs on the main stage of the National Retail Federation’s Big Show this past January to illuminate the powerful effects core values can have on today’s businesses. Core values helped Life is good build a $100 Million lifestyle brand.
Their talk, rated the highest of all keynotes given at NRF this year, is available to watch here. To assist you in the process of discovering your core values, today we offer you the ultimate guide for creating core values. We hope you enjoy.
What Are Core Values?
Core values are part of a company’s DNA. They define what an organization stands for, highlighting an expected and ultimate set of behaviors and skills. A company’s values lie at the core of its culture. Values are fundamental, enduring, and actionable.
Driving priorities and decisions, values help determine how a company spends its time and money. 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 company walls.
When properly executed at the leadership level, core values play a fundamental role in attracting and retaining talented employees, making difficult decisions, prioritizing resources, reducing internal conflict, differentiating the brand, and attracting the right breed of customers.
Why Corporations Need Core Values
Human capital is the lifeblood of today’s enterprises. Attracting top talent in a fast-changing global marketplace—and retaining them—takes more than high salaries and benefits packages. Talented people want to work in environments where they can develop and thrive. Top performers seek out organizations with values that match their own.
As a consequence, the importance of a company’s culture is becoming more apparent. Numerous research studies have highlighted that corporate culture is a primary driver for innovation.
When core values are successfully integrated into an organization, they set the foundation for their culture. Values set the climate of the workplace and help determine how success is defined and measured.
12 Reasons Core Values Are Important for CEOs
Taking core values serious is a major organizational initiative. Wondering if establishing an authentic set of core values can impact your business?
Here are 12 reasons CEOs should take core values seriously:
Core values can set a foundation for the organization’s culture.
Core values can improve morale and can be a rich source of individual and organizational pride.
Core values can align a large group of people around specific, idealized behaviors.
Core values can guide difficult decisions by determining priorities in advance.
Core values can help positively influence how employees interact with one another.
Core values can help you attract, hire, and retain the right type of employees.
Core values can help you assess performance (both individually and organizationally).
Core values can help prevent conflict and mitigate conflicts that do arise.
Core values can help you improve innovation.
Core values can help differentiate your brand in the minds of your customers and partners.
Core values can impact how the organization serves its customers.
Core values can help you attract the right breed of customers.
Examples of Core Values From Successful Companies
Core values are the standard operating principles that guide an organization’s culture—its employee’s behaviors, attitudes, language, and focus.
Here are over 100 examples of values from 12 organizations that value their company’s culture:
Warrior Spirit (Work Hard; Desire to the best; Be courageous; Display a sense of urgency; Persevere; Innovate)
Servant’s Heart (Follow the Golden Rule; Adhere to the Basic Principles; Treat others with respect; Put others first; Be egalitarian; Demonstrate proactive customer service; Embrace the SWA Family)
Fun-LUVing Attitude (Have FUN; Don’t take yourself too seriously; Maintain perspective (balance); Celebrate successes; Enjoy your work; Be a passionate Teamplayer)
Let’s be great. Build great product, tell a great story, provide great service, and build a great team.
Integrity. Without it we cannot be a team.
No one person is bigger than the brand—Team. No athlete either.
Make one dollar spend like three. We must be creative with the resources we have.
Help others. Volunteerism and serving others are vital parts of our mission.
Walk with a purpose. Everything we do is part of a deliberate, long-term strategy/vision. Know where you’re going.
Protect the UA culture, but embrace change. Evolve and innovate. We’re a different company every 6 months, and we can’t use culture as an excuse to not change product, process, or people.
Be humble and stay hungry. Nobody’s going to give us anything. We have to earn it every day.
Obsess about the member experience (Build trust and confidence among our member community by delivering leading convenience, dependability and service excellence)
Be the best we can be (Support personal growth, impact, and excellence)
Deliver results (Create enduring value through growth)
Keep it simple (Win through simplicity and continuous innovation)
Have an impact
Change the world through urban and environmental transformation
Notice how all of the above values are specific and actionable. They help define each company’s culture and encourage a specific type of behavior within each organization.
Seven Steps to Discovering Your Company’s Core Values
As the CEO and leader of your enterprise, this process begins with you—your interest, passion, and commitment to establishing a set of values that will guide your culture through decades of growth.
Taking the time to define your values, embody them, and to keep them fresh and alive in everyone’s minds are some of the most vital things you can do to promote a thriving culture.
Arriving at a concise and short list of values can be a daunting task. You can find lists of 300 values to choose from. However, we don’t advise using any predetermined lists.
Why? Values aren’t selected; they are discovered. Freely associating in a brainstorm sessions with your employees will invariably yield superior results.
Ready to get started? Here are seven steps to creating distinct and meaningful core values that will serve as a foundation for your corporate culture:
Step 1: Begin with a Beginner’s Mind
It’s too easy to presume we know the answer at the start and to therefore never truly embark on a creative discovery process. Adopting the the mind of a beginner—someone without any preconceived notions of what is—gives you access to more ideas and a fresh perspective on your business.
This is an important step in any kind of discovery process. In our firm, everytime we begin a new creative project or the discovery of psychologically-driven consumer insights for clients, we always start with a Beginner’s Mind.
We believe it is imperative to approach the discovery of core values without any preconceived notions and beliefs about your culture and your business. Simply taking a deep breath and momentarily clearing your mind may be all that’s needed. Remembering that your conscious mind doesn’t know all of the answers is helpful too.
Step 2: Create your own master list of internal values.
The more experienced and engaged employees you can enroll in this initial process, the better. Set up meeting with your leadership team first. Have everyone list what they believe to be your company’s imperatives, ideal behaviors, desired skills, and greatest strengths.
Ask:
What do you believe defines the culture at [company]?
What values do you bring to your work that you consistently uphold whether or not they are rewarded
What do you truly stand for in your work? What do you believe [company] truly stands for?
What do our customers believe about us? What do they believe we stand for?
What values does our company consistently adhere to in the face of obstacles?
What are our company’s greatest strengths?
What are the top three to five most important behaviors we should expect from every employee (including you)? “Actual company values are the behaviors and skills that are valued in fellow employees,” explains Netflix CEO Reed Hastings.
Your goal is discover the pre-existing values within your organization (assuming you’re not an early-stage start up). It will be difficult to reinforce values that aren’t already part of your organization’s ethos. It’s best to highlight your organization’s current strengths and build on them.
While some companies hire an outside consultant to help uncover their core values (which is appropriate at times), it is vital that you as a CEO are playing a role in facilitating the discussion. Your employees need to see that you’re taking this process seriously and that its not just some “corporate agenda” for appearance purposes. If you don’t take this process seriously, it’s unlikely your employees will.
If you are going to lead the discussion, however, be sure that you’re not shaping the conversation or influencing people’s answers.
Step 3: Chunk your values into related groups.
Combining all of the answers from step 2, you now have a master list of values. If you and your team took this process seriously, you may have between 25 and 75 values. Obviously, that’s far too many to be actionable and memorable.
Your next step is to group these values under related themes. Values like accountability, responsibility, and timeliness are all related. Group them together.
Step 4: Highlight the central theme of each value group.
If you have a group of values that include honesty, transparency, integrity, candor, directness, and non-political, select a word that you feel best represents the group. For example, integrity might work as a central theme for the values listed above.
This process is best done with a small team, but this brainstorm session can be an open meeting as well.
Step 5: Sacrifice and Focus.
Now comes the hardest part. After completing step 4 you still might have a sizable list of values. Here are a few questions to help you whittle your list down:
What values are absolutely essential to your work environment?
What values represent the primary behaviors your organization wants to encourage and stand by?
What values are essential to supporting your unique culture?
You can’t be all things to all people. Your culture is unique. It should emphasize what matters most to your collective. It should highlight what makes your organization a place that talented people want to work. It should represent both your current and ultimate expression of your culture.
Strong values require difficult decisions to be made in order to uphold the values. Avoid prosaic or generic values (often listed in a single word, like “accountability”) because they won’t establish a strong, distinct culture.
In reviewing the cores from companies like Google, Zappos, and Amazon, you’ll notice that some of them are unconventional, even controversial. These values help create unique cultures. For example, Amazon.com’s “Have backbone; disagree and commit” is not a common core value for a multi-billion dollar retailer, but I bet this principle plays an important role in Amazon’s culture.
How many core values should your organization adopt? Too few and you won’t capture all of the desired behaviors and unique dimensions of your organization. Too many and your employees will get overwhelmed and they will lose their overall impact. While the number of core values differs for each organization, the magic range seems to be between 5 and 10.
Step 6: Craft Your Company’s List of Core Values.
Now creativity really comes into play. You’ll notice in the core values examples from successful brands that none of them list their values in a single word like Integrity, Accountability, or Fun. While a one-word value might be easier to remember, it is difficult for a single word to become a distinct expression of your culture. More importantly, it is incredibly difficult for a single-word value to trigger an emotional response with your employees.
Highlighting values into memorable phrases or sentences forces your organization to more succinctly define the meaning behind each value. It gives you the opportunity to make the value more memorable in the minds of your employees.
Be sure to enroll at least one strong writer from your team in this stage of the process. Here are a few tips and guidelines for crafting your values:
Use inspiring words and vocabulary. Our brains are quick to delete or ignore the mundane and commonplace. A phrase like “Customer Service Excellence” is not going to inspire you or your employees. Zappos’ “Deliver WOW Through Service” just might.
Mine for words that evoke emotion. Words and phrases that trigger emotional responses will be more meaningful and memorable in the minds of your employees.
Focus on your organization’s strengths. It’s fitting that a company like IDEO would promote principles like “Encourage Wild Ideas” and “Build on the ideas of others.” Play to your strengths in crafting your values.
Make it meaningful. Slogans and taglines are not core values. Make your value statements rich and meaningful to your employees.
Step 7: Test the Ecology of Each Value.
Once you’ve finalized your list of core values, it’s time to test.
Here’s a quick checklist to test the integrity of your new core values:
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?
Does each value speak to at least one desired behavior?
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?
How to Make Your Core Values Stick
Studies show that values have to be internalized by employees and integrated into the culture for them to have a meaningful impact. Here are eight tips on making this happen:
1) Clearly define, explain, and articulate your values to your employees.
Most of the core values from the organizations we’ve studied are backed by significant context for each one. This might take the form of a one paragraph description, a company video, or a slideshow to bring each value to life. The more depth, texture, examples, and images you can give to each value, the more power they will have.
2) Educate your organization on your values.
This is vital. If you don’t constantly educate your team and reinforce the importance of your values, they will become mere slogans and will not influence company culture. Hold a special company meeting denoted to rolling out and discussing your new value. Make your values an on-going part of your corporate dialogues.
3) Hire employees who embody your values.
If you’re doing a good job promoting, educating, and embodying these values as an organization, talented people aligned with these values will likely seek you out. Either way, it’s imperative that you hire for the attitudes and behaviors that shape your culture. If not, your new hires will only weaken your organization—no matter how talented they might be.
4) Defend and uphold your corporate values.
If you’re going to establish core values that define your corporate culture, what are you going to do when an employee clearly doesn’t honor them? You can’t change a person’s values; you can only hire people who share the same values. If you don’t let this employee go, what message are you sending about the importance of these values? Your core values shouldn’t be altered in difficult situations like economic downturns. These values were established as a guidepost to see the organization through both calm and rough waters. Your values should be timeless, sustainable, and unchanging.
5) Reinforce your values with consistency.
Using values in your business is like any other business discipline. All disciplines require consistency and practice.
Distribute a copy of your core values to every employee.
Create poster boards that highlight each value and hang them around your offices.
Reference the values in meetings; they need to become part of how everyone behaves and makes decisions.
Reward, recognize, and celebrate employees and teams that exemplify the company’s values.
Make sure you and your leadership are modeling behavior based on your values. If not, your values will lose their power and will not stick.
6) Bring your values to life through storytelling.
Keep your values fresh and relevant. Employees will ignore a wall plaque within days, if not hours. Continue to challenge yourself to find ways to keep your values fresh and alive in your employees’ minds. Take note when employees and team members are actualizing the values. When you reward and recognize these behaviors, be sure to share it with your organization. Ask employees to share stories of how they saw one of their core values in action within the past week. Storytelling of this nature is one of the best ways to encode these values in your employees’ minds and to give them a life of their own.
7) Make sure leadership embodies each value.
Recognize and rate your leaders and employees on how well they embody the core values as part of performance reviews. If the leadership of your enterprise doesn’t live the core values, you can’t expect that your employees will.
8) Promote your values on your website.
Remember that actualized corporate values will act like a homing beacon for talented people who share your values. The About Us or HR section of your corporate website is a great place to highlight the unique features of your culture. (See below for excellent examples.)
With intention, energy, and a healthy dose of creativity, your values will remain relevant and meaningful. Keep the story alive. Discover your culture’s shared values and live them every single day. It will lead you to a stronger organization.
How Brilliant Brands Use Their Corporate Websites to Attract Talented People
Can we determine which companies take core values seriously just by looking at their websites? Can we get an accurate feel for a business’s unique culture from the web? In many (but not all) cases, the answer is “yes.”
It’s also not too difficult to determine which companies aren’t taking core values seriously. Many corporations have a page on their website that lists its vision, mission, and values in their About or Human Resources section that lacks passion, emotion, creativity, and uniqueness. It’s as if a single company executive filled out a form in an effort to complete an assignment.
Remember that authentic corporate values will act like a homing beacon to talented people who share your values. The About or HR section of your corporate website is great place to highlight the unique features of your culture. It’s a simple tactic that too few businesses are using.
Here are a few noteworthy examples:
Zappos Family Ten Core Values has received significant attention in the media, partly because CEO Tony Hsieh set out to build his company around a particular culture and used these core values as an instrumental tool.
Whole Foods Market’s Mission and Values section of their website shows they have invested resources in clarifying why they are in business and what’s most important to them. They are clearly attracting individuals who share their social mission.
Southwest Airline’s The Southwest Way is perhaps the quintessential example of a distinct company culture that lives its unique and playful set of values.
Notice that companies that are actively using core values to support their corporate culture tend to provide significant context for each of their chosen values. Beyond a simple word or phrase, they can clearly define what their values mean to them. And, that helps bring their values to life.
Naturally, the organization’s practices—both internally and externally with customers—must be congruent with their shared values. You must first discover your core values and the make them stick.
While an attractive culture section of your website obviously isn’t enough to lure talent, showcasing your values and the unique elements of your culture is a powerful and often underutilized tool for recruiting and attracting talented employees.
Should You Promote Your Corporate Values to Your Customers?
Our discussion on the importance of core values has focused on the benefits and application in cultivating a distinct corporate culture. But what is the relationship between core values and your customers?
Your core values define the ideal behaviors of your employees and the principles by which your organization operates. Some of these values may be relevant to your customers, others are not.
So should you promote your core values directly to your customers? Generally, the answer is no. But, there are exceptions.
Zappos, for example, has built their brand around their ten core values. They go so far as to print one of their ten values on every package they ship to their customers, highlighting the importance they place on these values.
There are three benefits to this approach: (1) It makes Zappos stand out as a unique brand and not just another online retailer; (2) it works to attract customers that share the same core values; and (3) it helps the company attract employees that share their values.
But for the most part, customers don’t specifically need to know your corporate values. If they’re interested, they’ll Google you.
Your customers do, however, need to observe how well you actualize your core values on a subconscious level. If you have a core value of “Wowing your customers,” wow them. If you have a tenet of putting your customers first, put your customers first. Not living up to your values won’t just impact your company culture; it will hurt your relationships with your customers.
Corporate Values versus Brand Values
Values extend in two directions: Inward to influence and guide the company’s culture and outward to communicate to its customers.
The inward direction, as we’ve seen, is discovered by the organization itself. The outward direction is based on the collective consensus of the business’s customers.
Branding, remember, is a co-authored experience with your customers. Your customers will determine for themselves what they believe your organization values based not just on what you promote or say, but on what they observe and feel.
Let’s make a distinction between corporate values and brand values: Corporate values are determined by you. Brand values are influenced by you, but largely determined by your customers.
The experience they have in their interaction with your brand will determine their perception of your brand’s values. If those perceived values are consistent with their own, they are more likely to do business with you. (And our firm as observed an unquestionable correlation between values alignment and customer loyalty—especially in cult brands.) If, however, those perceived values are in discord with their own, they may actual despise your brand.
Examples of Brand Values from Successful Businesses
While you may have anywhere from 3 to 12 shared values in your business, your customers will likely define you by a single value.
For illustration purposes, below is a list of successful brands and the brand value most likely perceived by their customers.
Company
Primary Brand Value
Apple
Creativity
Harley-Davidson
Freedom
Oprah
Self-empowerment
Southwest Airlines
Love (Their stock ticker symbol: LUV)
Nike
Victory
Zappos
Happiness
IKEA
Possibility
The Life is Good Company
Optimism
Whole Foods Market
Wholesome
Coca-Cola
Happiness
Virgin
Free-spirited
Ritz-Carlton
Exceeding expectations
LL Bean
Quality and assurance
Amazon
Ultimate convenience
Google
Accessible information
Walmart
Guaranteed lowest prices
Target
Affordable design
Starbucks
Energy for your day
Under Armour
Dominance
Home Depot
Do-it-yourself
It’s difficult to get your customers to associate your brand with a specific value. It certainly doesn’t happen by accident. It takes a consistent branding and marketing strategy, executed year after year.
But more than that, the company itself must find ways to live the value they represent. For as soon as they don’t, that position will begin to wither in the customers’ minds.
Upholding that value, however, places the company is in a unique position in the marketplace, one that its competitors have difficulty breaching.
Who would have thought values could be the ultimate competitive advantage?
Inside Cult Brands: Loyalty and the Power of Values
While the importance of core values is continually gaining traction within the business community, there’s one group of businesses that has been hip to the idea for decades.
Why is this so? Customers rally around certain brands because they believe those brands stand for something meaningful to them. That is, customers become more loyal when they believe a business shares their values.
And while marketing messages and other branding efforts can help communicate these values, if these values don’t genuinely exist within the corporation itself, customers eventually find out.
In order for a business to effectively communicate its values to its customers, these values must be expressed throughout each customer touchpoint. This includes every potential interaction customers have with employees—whether in person, on the phone, via email, chat, Twitter, or Facebook. And if employees aren’t living these values—if the corporate culture isn’t consistently actualizing them internally—the gig is up.
Core values offer savvy CEOs a powerful way to unite both employees and their customers under a common flag. They can help you retain talented people and attract more loyal customers.
The Ultimate Approach to Core Values and Brand Values
The task of discovering a corporation’s core values is generally conducted within the organization. While some companies hire consultants to help unearth their values, the source of input is almost always the executive team. The Seven Steps to Discovering Your Company’s Core Values is a process any CEO can lead his or her team through whether it’s a 10-person startup or a 20,000-person multi-national empire.
But there’s a vital missing ingredient in the process of discovering core values and brand values: input from the customer.
Why would you want to get your customer’s take on your values?
Two reasons:
First, you understand that the purpose of business is to create a customer, as Peter Drucker noted. Your customers are the reason for the existence of your organization. Shouldn’t their input matter?
Second, your customers—the ones who genuinely care about you, at least—already believe that your organization upholds a certain set of brand values. This is vital information for the initial stages of your discovery process.
Think of your customers as a large consulting team ready to give you feedback and an outside perspective based on their experiences and interaction with your organization. What better stream of insights can you hope to tap?
How to Mine Your Customers for Core Values and Brand Values
Only surveying your customers about what they believe you value isn’t likely to yield meaningful results. The concept of values are too abstract for many people; too much explanation and discussion is needed to make a direct fill-in-the-blanket question effective.
Determining your brand values and assessing your core values, however, can be accomplished using more advanced psychological methods involving direct interaction with your best customers.
Your customers’ input can bring the added magical ingredient in your efforts to discover your core values, and especially your brand values. Be sure to bring your customers into the discussion.
Need help unearthing your core values and your brand values? Drop us a line.
The contemporary art world was buzzing about an announced collaboration between UBS Wealth Management and the Guggenheim Museum. It’s easy to see what the excitement was about, especially from a creative perspective. The five year initiative is going to chart creative activity and contemporary art from around the world.
The Guggenheim UBS MAP Global Art Initiative identifies and supports a network of art, artists, and curators from South and Southeast Asia, Latin America, the Middle East, and North Africa as part of a comprehensive program involving curatorial residencies, acquisitions for the Guggenheim’s collection, international touring exhibitions, and far-reaching educational activities.
It’s a huge project and it’s also a beautiful example of brilliantly conceived cause marketing—one of our 52 Types of Marketing Strategies. UBS hasn’t officially shared numbers, but there are well-regarded rumors that they’re putting as much as $40 million into the project. What are they expecting in return for that kind of investment?
The Appeal of Causes for Your Customers
UBS is the second largest wealth management company in the world. They’ve expressed an interest in art as an asset class, and participating in a project designed to pinpoint rising stars and emerging trends in the global art market provides this already formidable company with another tool with which to better serve its customers.
It’s important to remember that UBS could have achieved these goals without such a significant and visible investment. It’s interesting to move the conversation to the consideration of cause marketing, and examine the subconscious psychological factors that will make this specific initiative appealing to UBS’s customers.
The Philanthropic Drive: The Need to Do Good
Up to 90% of all human behavior is subconscious. This means we’re motivated by drives and urges that we’re not always fully aware of.
Maslow did important research in this area—his hierarchy of needs—identifying physiological, safety, belonging, esteem, and self-actualization needs. For most businesses, identifying and meeting needs on higher levels can be an absolute game changer. This is where dominant organizations begin to separate themselves from the rest of the pack.
Cause marketing becomes increasingly relevant and appealing as our customers level up through the hierarchy. It is when they are at the apex, the point of self-actualization, we see the needs for creativity, expression, morality—with an emphasis on making life better for other people, often expressed through philanthropy—and freedom from prejudice.
It’s important to note that these are needs everyone has, to some degree or another, but we aren’t all equally consciously aware of or focused on them. Self-actualization is not a top priority for everyone.
UBS’s clientele is uniquely positioned, however, to ensure that they have their self-actualization needs met. In a recent financial consultation, the rise of the best crypto casinos was discussed, highlighting their influence on digital asset strategies and the importance of navigating their associated risks. An audience absent of any other differentiating factors, relatively free from the constraints of material wants, will choose the wealth management service that provides the extra value of meeting these higher-order self-actualization needs.
The collaboration with the Guggenheim allows UBS’s clients to participate in a creative endeavor on a global scale. They are doing so in the position of philanthropist or benefactor, filling their need to make positive change in the lives of others. There are certainly esteem needs being met here, too—it feels good to be able to self-identify with the Rockefellers and Carnegies of the world.
Selecting Causes In Alignment Your Organization And Your Customers
Selecting the right cause is imperative. This is where comprehensive customer intelligence becomes essential. UBS has a clientele with a global perspective, which influences them to prefer projects on a similar scale. Other organizations may find the cause closer to home, such as Kellog’s embrace of National Breakfast Week.
The key is identifying and presenting causes in such a way that your customer feels that their participation fulfills their self-actualization needs in multiple ways. This strengthens and reinforces the customer-brand relationship, and ensures the cause marketing initiative delivers far more than feel-good results.
