Retailer NOW magazine caught up with Service and Culture Expert, Jim Knight, for an in-depth Q&A. Jim cut his teeth in the hospitality industry, starting out as a restaurant staff-level employee for the Olive Garden and the Hard Rock Café, eventually becoming the head of the School of Hard Rocks, running all global training and development functions for Hard Rock International:
RetailerNOW: Why is a company culture important?
Jim: Culture is everything. It’s like oxygen to you and me. In fact, I actually use that specific analogy to identify those companies that have strong organizational cultures; they are like life-breathing oxygen to the body, while those that are weak are like poisonous carbon monoxide. Consumers only want to do business with companies that make them feel good. They want memorable experiences, which are going to be comprised of great service, quality products, fun atmosphere and a fair price per value. Employees only want to stick around with organizations that they trust, admire and respect. Brands that can consistently deliver on these fundamental platforms create a strong culture, which in turn attracts more people—internally and externally. And you definitely know it when you see it in the totality of a company’s business outcomes and eventual lifespan. Believe me, in every way possible… culture matters. Just ask Howard Shultz, Phil Knight or Richard Branson.
RetailerNOW: What are the first steps in revolutionizing a company’s culture?
Jim: Changing a company’s culture is tricky business, especially if you are not the organization’s leader. However, I believe that a single, passionate person with a great idea can start a revolution. My first thought is to decide to become a positive catalyst for change. This may seem like just a singular mindset at first, but cultural movements quickly become infectious. Once you mentally go there, then it’s about adjusting the organizational health, which is 100 percent predicated upon human beings. So, my first tangible approach to adjusting a brand’s culture would be more of an evolution than a revolution; cultural change would happen one new-hire at a time. I would zero in with laser-like focus on the front-end of the employee workforce by making this clear decision: hire only rock stars, not lip-syncers.
Although many things make up an organizational culture, my core definition of a company’s culture is that it is simply a collection of individual behaviors. As one person joins the company, the culture changes. As one person leaves the brand, the culture again changes. The culture is in constant flux, as people come and go. Therefore, you would want to make sure that you hire and retain the absolute best brand ambassadors you can find—people who deserve to be in the band—versus the ones that are simply going through the motions. Surrounding yourself with people that are committed to an inspiring collective mission is one of the greatest ways to positively affect company culture.
RetailerNOW: How is culture reflected in both internal and external relationships?
Jim: Culture is everything. When you get it right, people notice. Customers and potential employees alike covet a brand’s strong culture. Especially during tough economic times, consumers make purchasing decisions based off of value and emotional connection. If a company makes customers feel good during their interaction with the brand and the consumer’s perception is that there is real value in cost of the experience versus the money spent, they will continue to return and influence others to do the same. Employees have the same touch points. Businesses that are financially stable, educational, opportunistic, fun, clean, safe, inspiring and rewarding are healthy environments where people want to work. No doubt, morale is higher and turnover is lower in those brands, where the culture is envied by others. Those companies that create and foster this type of environment are ones that become known as the attractive place to work. If someone ever decides to leave the organization, you get to choose the best talent available versus being at the mercy of a weak talent pool. The relationship that a company has with its employees and customers is going to be predicated upon the strength of the organization’s culture.
RetailerNOW: What does a company’s culture say about a company?
Jim: The word “culture” tends to have a preconceived connotation that has evolved over the years where many still view this as a warm and fuzzy, nebulous concept. This ideal for many leaders is more of the softer side of the business that warrants little attention or respect. Perhaps it’s because it cannot be easily seen or measured and therefore is considered non-essential or even a hindrance to achieving top-notch business results… but they couldn’t be further from the truth. In a sea of sameness, brands have to differentiate themselves to have any real hope for sustainable growth. When you hear about culturally strong brands like Disney, Whole Foods, Southwest Airlines, Starbucks, Zappos, Apple or Five Guys Burgers, there is no doubt of the validity of their results in almost every area. Those organizations understand the pivotal role that culture makes in their long-term success. The brand’s image, which includes its culture, is the most critical asset to consistently creating differentiation from its competitors over time. They want you to identify their names and products with strong culture because it will eventually help to sell products or services. A strong company culture screams of differentiation.
RetailerNOW: Is culture a feeling, something that is written down, or both?
Jim: Absolutely, it is both. All companies have culture, whether it is written down and communicated or not, but the existence of a “feeling” occurs when a company’s personality is well defined. This can actually be good or bad, which is why it would be best to have the elements of the culture written down, so that it is easily understood—or else, people will interpret the brand and its intentions the way they want. In lieu of clear messaging, they will fill in the blanks and create confusion. Those organizations that recognize the importance of capturing the culture and recognizing its existence are the ones that create and communicate crystal clear direction on what the culture is and how it should thrive. One of the things I have noticed about Fortune 500 companies is that they communicate better than most. The most successful companies in the world have a shared mind-set. Therefore, one of the best ways to get everyone singing off the same sheet of music is to have the culture written down for all to see, adopt and exemplify. Regardless of the form of collateral, if the brand’s story, mission, vision, values, service experience, and the like, are clearly communicated and modeled, then it positions everyone to understand, live, teach, protect and perpetuate the culture. People are smart. They can feel the existence of a great culture, but there are a lot of nuances that go into making that culture come to life.
RetailerNOW: When hiring new employees, how should businesses evaluate if a candidate fits in their culture?
Jim: I would start with how their personality resonated during the interview; are they smiling, do they seem passionate, do they make me feel good when I am around them? In today’s business, you hope to ensure every employee has all three C’s: Competence, Character and Culture, but only one of these have visible metrics and a history that can be quantified… competence. It becomes the default easy focus because that’s what employers are comfortable with, so it’s the one they rely on the most. That’s why there always seems to be a huge need to narrow in on a candidate’s experience. In reality, most jobs are not hard to teach, but you cannot train someone how to naturally smile or authentically provide stellar experience. These have to be behaviors an employee will bring to the party. If I were interviewing a candidate, I would care less (if at all) about experience or skill and focus all of my questions on answers that would reveal character & cultural traits. Questions would certainly be open-ended and behavioral, but also situational in nature. I would try to get to the heart of how an applicant would create an experience that matches my culture. I would ask questions that would test their integrity and decision-making. I would look for language and cues that would reveal to me their intention to commit to the brand’s mission or just comply to the company’s policies. Hiring is certainly an art form, but it’s one of the greatest skill-sets a true culture catalyst can develop.
RetailerNOW: How do you motivate your employees to ensure they are providing the best service possible?
Jim: You strategically pull every lever and incent people like they’re rock royalty. There certainly is something to be said for building in some physical reward mechanisms into your organizational culture. This could be collectible pins or gift cards to be handed out when great service is observed. Most people like public recognition in front of their peers, which then leads to overall morale and repeat performance by the employee and others. You could put a “point” system into place where, as people do certain things above and beyond to create experiences, they get a certain amount of points to eventually buy from the company “store” or choose their own reward, such as paid days off. I have seen staff-on-staff recognition also work well. This is where you implement a process, like a pad of paper for employees to take, fill out and then post in a staff common area where they recognize each other for great service or teamwork. Once in place, this self-managed program will take a life of its own. You could also tie performance appraisal metrics and pay increases to customer service scores and experiences, knowing that what gets measured gets done. However, nothing beats the old-fashioned and free “thank you.” The more opportunities that you can thank employees for the phenomenal work they do in this area, the better.
RetailerNOW: What’s one thing most people forget when maintaining their culture?
Jim: That it fundamentally is about human beings, not systems, processes or tools. Surround yourself with an army of giants—people who are so committed to the brand that it becomes a lifestyle for them versus a job—and you virtually ensure the continuation of the company’s culture. Personally, I have become a systems guy, in that I see the value in having solid and proven practices in every area of the business put into place and fostered. The assumption would be that if you could get those processes to work the way they are supposed to, they would garner desired results. But if the processes are then populated with people, who have the awesome human endowment of “Free Will” and are going to choose to do what they want to do, then you must ensure you hire and retain the right talent. The more employees you have on the team that are not part of the tribe, the harder it will be to maintain the culture.
RetailerNOW: How does a company’s culture trickle down to the customer?
Jim: I actually think it bubbles up to the customer. Maybe that’s just semantics, but I equate a company’s culture to that of an iceberg. The analogy being that what the guests see above the surface is really only 10 to15 percent of the entire iceberg. That certainly is the part that matters in business for the consumer, but it’s the 85 to 90 percent that lies below the surface that makes the difference. The massive bulk of the iceberg, hidden below the water’s surface, represents the internal culture of the company. The mission & values, past experiences and heritage, the commonly held beliefs, the organization’s systems, processes and tools… all of that collectively makes up the brand’s infrastructure. Whether it’s strong or weak, it eventually percolates up to the surface level for the entire outside world to see. People’s behaviors are what matters. As we develop a robust internal personality for the organization, the true nature and feelings from the employees bubble up to the guests’ view. To revolutionize a company’s culture, it always starts from the inside—within the heart and soul of the brand.
By Melissa Dressler/Retailer NOW/April, 2013