Why now is the best time to change the culture of your business
Change. It’s all around us. Everywhere you look, people are re-evaluating. The pandemic has made us realise that nothing is certain. It’s impossible to know what the world will look like next week, let alone next year. And this is accelerating change in many businesses.
Recessions can present as many opportunities as they do threats. I know this for a fact because it was during the recessions of 2001 and 2009 that I scaled two businesses to £30 million turnover from zero. In both cases, our success was down to the character of the people we hired and the culture we formed together. These two things are inextricably linked.
The news this week has been full of rising unemployment figures and a massive reduction of vacancies. But that means one thing. Talent. Lots of talent. And less competition for it. For companies that are agile and responsive, this is a once in a generation opportunity for a talent upgrade. It’s how you drive real cultural change. Get rid of the people that are holding you back and bring in people who share your beliefs. Then you will be ready to roar out of the recession when the time comes.
Finding the right fit
Getting the right people on your bus can make all the difference to how fast you travel. When staff are aligned with what you stand for, you’ll find they’ll go the extra mile without you needing to ask. At Peer 1, we knew we’d found some real heroes. Take Darius, Stuart and Larry. These three guys slept in the office on bean bags for three consecutive nights to sort out issues on a new client, Missguided’s, eCommerce platform. They did it automatically because they wanted to help.
Larry pulled it out of the bag again for our client, The British Red Cross. They were in the process of moving from one data centre to another. A massive typhoon hit Indonesia and they immediately launched an appeal. The next day was set to be the busiest for donations so a planned software change needed to be moved to 3 am to cause minimum disruption. The software vendor refused to do this, saying they only worked 9 to 5. But Larry valiantly came to the rescue, saying ‘Teach me how to do it and I’ll make it happen.’ Sure enough, he got up at 3 am and sorted the issue. Fantastic dedication with a direct impact on people in desperate need. Afterwards, I received a positively glowing email from the CEO – a very happy customer!
Getting rid of the wrong fit
Only one in four employees is meeting company expectations after their first six months. One in four! That’s bad. And yet too many managers sit on their hands, wondering if it’s something they’re doing wrong or a lack of training. Maybe they’ll get better with time? Bollocks! If you’ve crafted a good job scorecard and you’ve been clear on your expectations, you’ll know after 90 days whether someone’s an A-Player or not. Don’t put up with a B-Players who are just plodding along. To shift your culture, you need a high percentage of A-Players in your business.
This means taking hard decisions. As the new MD of hosting for Pipex, I could see that the majority of our staff were B and C Players who would resist the change that I needed to make. So, I made 120 people redundant. Yep – that’s right. 120! And went on to hire 99. Attitude will always trump knowledge in my mind and we hired for cultural fit. Similarly, at Peer 1 one of our core values was ‘every interaction matters’. If there was someone in the team who didn’t live this, whether this was in their relationship with their colleagues or customers, we knew we had to let them go.
Clarity on behaviours and expectations
If you haven’t already, I suggest you get complete clarity over the behaviours you expect from staff. These should come from your core values and I’ve written extensively about these in the past.
I recently interviewed Horst Schulze, founder of the Ritz Carlton hotel group, for my Melting Pot podcast. We discussed exactly how critical clarifying expectations is to building a culture of excellence. One of the behaviours drilled into their staff was ‘never point, always show’. So, if a customer asked them, ‘Where’s the spa?’ they would take them there. You might think this is over the top. But by doing this, there was an opportunity to build rapport. To ask, ‘Where are you from? What’s your name? Can I book a restaurant for you tonight?’ Or they could find out whether anything was amiss. A simple gesture that meant they could do more for their customers. Horst said he could always tell at the interview whether someone would enjoy doing this or not.
When I arrived as the new MD of IT Lab, the helpdesk told me they were busy. But the engineers were only logging two hours out of their day. There was no attention to detail. I told them that, until I could see evidence, we weren’t going to hire any more staff. It was clear that people were busy on the wrong things, with little focus or tracking. We were overdelivering for customers who weren’t paying enough. So, I brought in Net Promoter Score® (my metric of choice for customer satisfaction) and started measuring against targets. Two years later, the hours they were logging had increased to six and our NPS had shot up from -7 to +55 .
It didn’t take long for the culture to start to shift at IT Lab. For some staff, their performance changed from B to A. Suddenly, they got a sense that this was their moment to shine. Our new way of operating was absolutely in keeping with their personal values. Others decided to leave or resisted until we asked them to go.
Recruiting for unconscious attitudes and beliefs
You’re looking for instinctive characteristics that show up unconscious beliefs and behaviours. Off-guard moments will often be far more insightful than hours and hours of interviews. The person who offers to take their mug back to the kitchen to wash it up after their interview. At that moment, you see accountability.
Make sure to chat to your receptionist after potential hires have left to see how they interacted when they weren’t being assessed. This can tell you a lot. Look at the way people present themselves – in an interview, I expect people to look smart with polished shoes. Good candidates will bring a pad and pen with them and ask smart, relevant questions. And remember, to attract A-Players, you need to demonstrate that this is an environment where they can thrive. So, make sure they’re interviewed by fellow A-Players.
Reviewing first impressions
I was chatting to someone last week who runs a peer board for small businesses. He told me he’d visited two companies recently. Both had started out at the same time as Hampshire-based telecoms start-ups. One is now turning over £13 million and the other £5 million. From the moment he walked through the door, it was clear to him which was the more successful. Within five minutes, a number of employees had come up to him to welcome him, offer him a coffee and ask if he needed any help. At the less successful one, the Receptionist barely looked up. No eye contact, no atmosphere, no buzz.
If you’re moving back to the office after remote working through lockdown, take this opportunity to review the first impression your business gives. It can make a massive difference to your whole culture. This is where it starts. When I was a judge for the Management Today Service Excellence Awards (after winning it the year before), I would make a point of standing in Reception to soak up the feeling of the business. You knew instantly whether they were in with a chance of winning. At Rackspace, our receptionist had the title ‘Director of First Impressions’. Her profile was on the leadership page of our website and her role was highly valued. She had a budget for fresh flowers, magazines and newspapers and always made sure meeting rooms were ready for action. There was a tangible sense of pride in everything she did.
Opportunities for restructuring
The disruption caused by the pandemic presents a golden opportunity to tighten up process and re-structure. There are changes you can make that will have a massive impact on your culture. At Rackspace, we realised that the reason our competitors were rubbish at service was structural. At the time, I was reading the best-selling book ‘Service Profit Chain’ which described how customer value is destroyed at the boundaries between different organisational departments. Every time a customer is forced to cross a boundary, it destroys customer service.
We wanted a structure that maximised our Net Promoter Score, so we restructured into a matrix organisation with multi-disciplinary pods focusing on specific customers. These teams had daily huddles where they discussed what was happening today or tomorrow for their customers. They were bonused on the growth of their customer base and had a real sense of purpose. It was easy for them to see how their contribution made a real difference to their customers. This was transformational.
Look at ways that you can tighten your processes. I was inspired by a talk I went to, given by the AA. They said one of the things that had increased customer satisfaction was the reduction of time given to mechanics at the roadside from 45 to 35 minutes. This may seem like a small change but it made all the difference psychologically.
Apparently, they’d seen research that told them that, after 35 minutes, customers started to lose faith that the mechanics knew what they’re doing. I applied this psychology to our technical helpdesk. Level 1 engineers were given 35 minutes to solve a customer issue before it was escalated to Level 2. We then told the Level 2 engineers to look at what was coming through and decide what training was needed. The aim was to upskill the Level 1 engineers so they could solve the problem the first time. This resulted in a massive efficiency improvement with a knock-on effect on our NPS. More tickets solved on first contact. Happy customers and happy engineers!
Here’s the thing about change – it’s difficult. Humans are creatures of habit and we prefer to stick with what we know. But my challenge to you is to seize the opportunities for cultural change that are emerging from coronavirus. I read something the other day that really resonated – if you have two courses of action, always choose the one that’s most disruptive. This is how you’ll achieve rapid growth in your business.