Intrinsic motivation is conducive to creativity.
—Daniel H. Pink
An Apple customer in Cardiff, Wales, Anna, once posted this Tweet to her three hundred friends: “Blown away by Apple customer service. Brand-new replacement iPad despite no insurance and the cracked screen being entirely my fault.” Anna’s experience is not unique. It happens quite often. It’s not secret inside information. Anyone who monitors Twitter can see it.
On the same day that Anna posted her experience, “Rob” tweeted, “My mom dropped her iPhone in water, fried the hardware, and the Apple Store gave her a brand new one on the spot.” When a customer buys an iPhone at the Apple Store, the device comes with a limited one-year warranty. It covers stuff that’s Apple’s fault—like defects in materials—and doesn’t cover the stuff that’s your fault—like “cosmetic damage’ ” (broken glass, dents) or damage caused by “accidents” or “liquid contact.” In other words, if you drop your new iPhone in the toilet, you’re out of luck, and Siri, the iPhone 4S personal assistant, can’t help you. So how could Anna and Rob’s mom get their devices replaced? The answer will tell you everything you need to know about attracting, retaining, and motivating A-players, people at the top of their game.
Apple employees are not supposed to replace devices that have been accidentally dropped, dunked in water, or otherwise damaged due to the customer’s negligence. But sometimes they will replace devices that were dropped, dunked, and damaged if it’s the right thing to do. Apple employees are empowered to make the right decision, and sometimes replacing a computer or iPod that’s out of warranty is the most appropriate response. However, by the time you read this, I believe that this policy will be so well known that it wouldn’t surprise me if Apple has to become more selective with its replacement units.
Warranties are written in black and white, but Apple employees are empowered to make decisions in the gray area. They are trusted to make the right decision for the company and for the long-term relationship with a customer. If a customer brings in an iPhone that was accidentally dropped in a puddle, an employee at the Genius Bar might look up the customer’s history, and if he feels that replacing the device will restore the customer’s trust in the company, he will do so. The Genius’s role is not to fix computers. It’s to rebuild relationships. In the first ten years of the Apple Store, the company learned “a visit to the Genius Bar can fix more than computers; it can restore a customer’s relationship with Apple.”1
Compare this philosophy to other retailers. A friend who works as an assistant manager at a department store says she is “empowered” to give a customer a $20 gift card if the company messed up in some way. At least that’s what employees are told. The truth is harder to come by. The department store’s employees must get multiple levels of permission, all the way up to district manager. Since my friend’s district manager takes days to respond to a phone call or e-mail, she knows that offering a $20 gift certificate is fruitless. So she doesn’t.
Now don’t expect to just walk into an Apple Store and get your broken device replaced because you read it in this book. Remember, Apple hires “fearless” employees. If you show up and demand a replacement because you heard that someone else had a device replaced, an employee will probably remind you about the warranty and what it covers. Apple employees treat customers with respect, but fearless employees command respect in return. Now you know what’s behind a Tweet such as this one: “Apple Store responded to my screen-shattered, out-of-warranty iPhone 4 by handing me a new one. Customer service so high it’s embarrassing.” Empower your employees to embarrass themselves every now and then.
Empowered employees have higher levels of “engagement,” meaning they are emotionally connected to their jobs and dedicated to providing the highest customer service. But as we’ve discussed, most employees are uninspired and disengaged. Less-engaged employees are more likely to leave an organization, leading to rising turnover costs, lower productivity, and growing disruptions.2 I’m not sure how companies with disengaged employees can even stay in business. They will certainly never offer Apple-style customer service. Commentators praise Apple’s success in retail by citing foot traffic, design, products, or the patented circular glass staircase. All of these items are important, but Apple’s success begins with empowered and engaged employees who truly believe they are changing the world. If you don’t get your internal customer right, you’ll never do right for the customer.
You’ll recall from Chapter 2 that before hiring an employee some Apple managers ask themselves, “Could this person go toe-to-toe with Steve Jobs?” The second question they ask themselves is, “Can this person provide Ritz-Carlton quality of customer service?” I’ve had the opportunity to interview The Ritz-Carlton leaders, and I learned that, like Apple, empowerment is one of the fundamental building blocks of The Ritz-Carlton experience.
For over two decades, “The Ritz-Carlton Basics” guided every interaction between employees and guests, and these twenty rules dictated everything, from exactly what to say (Never say “Hello.” Use more formal greetings like “Good morning”) to actions (Never let a guest carry his own luggage). But as the world changed, so did the typical Ritz-Carlton hotel guest, and it became time to rethink service values by empowering employees to think and act for themselves, but still in accordance with The Ritz-Carlton vision.
Senior leaders conducted dozens of internal focus groups, meeting personally with thousands of employees around the world to develop a new set of service values. Frontline employees were asking for more flexibility in the way they were allowed to interact with guests. They wanted to be “empowered” to do what they knew was right.
In a service environment like Apple or The Ritz-Carlton, the goal is to create an emotional engagement with the brand so strong that a Ritz guest will not consider staying anywhere else and an Apple customer would never consider buying a PC. At The Ritz-Carlton, the quality of the beds, furniture, or flat screen TVs are all part of the experience, but in a luxury hotel those things are expected. Once basic luxury standards are met, the emotional engagement comes through the experience guests have with employees. Nobody has an emotional experience with an object.
In 2006, The Ritz-Carlton introduced its new service values, guidelines for employees to follow during guest interactions. Among the values: “I am empowered to create unique, memorable, and personal experiences for our guests.”3 (Service Value 3); “I understand my role in creating The Ritz-Carlton mystique.” (Service Value 4); “I own and immediately resolve guest problems.” (Service Value 6); and “I am involved in the planning of the work that affects me.” (Service Value 9). I am involved. These three words hold the key: invite your employees to participate in the creation of the brand, listen to what they have to say, act on their feedback, and they will walk through walls for you.
Every day at the nearly a hundred Ritz-Carlton hotels around the world, in each department, on every shift, employees are called in for a “lineup,” a staff meeting. The lineup is a fifteen-minute pep talk where wow stories are shared with everyone on the team. Wow stories feature The Ritz-Carlton hotel employees who create unique, memorable, and personal experiences for guests. A housekeeper who shows up for the evening shift in Shanghai will hear the same story as a doorman had heard in Hong Kong an hour earlier or a waiter in New York the next morning. In my book Fire Them Up!, I included some real wow stories. Here’s one example:
Today’s wow story is from The Ritz-Carlton, San Juan Hotel, Spa & Casino and demonstrates today’s “Service Value 1 in building strong relationships to create Ritz-Carlton guests for life.
A married couple had been repeat guests at the hotel for the past few years. This year, a suit the wife was wearing was stained due to a spill on the counter. It was a very expensive suit and it was sent immediately to the laundry to be dry-cleaned. The stain, however, would not come out. The guest was very disappointed when she checked out, as nothing could be done to restore her ruined suit. Harold Rodriquez, Laundry Supervisor, called her home to apologize and asked if she was willing to FedEx her suit so that another attempt could be made to remove the stain from the suit. The guest agreed and Harold contacted an external laundry company for their assistance. Harold called the guest every day to keep her informed on the progress of the suit cleaning. Unfortunately, the outside laundry company was unable to remove the stain.
Harold wanted to turn the situation around and build a relationship for life with the guests. He therefore proceeded to get the cost of the suit reimbursed, took the check, got on a plane to New York, drove to their home, and rang the doorbell. When he introduced himself, the couple looked surprised. Harold received smiles and hugs. Their gratitude was priceless. He had created a memorable experience for the guests by turning a problem into an opportunity to “wow” them with genuine care and service excellence. His belief that nothing is impossible: when you do something from the heart everything in life can be accomplished.4
If you find this story hard to believe, rest assured, it is true. The hotel employees, the “ladies and gentlemen” of The Ritz-Carlton, are empowered to do what’s in the best interest of the guest and what they believe is required to nurture a long-term relationship between the guest and the brand.
In Drive, Daniel Pink analyzed dozens of studies in the area of human motivation. Pink believes that most businesses fail to understand what motivates people. “Too many organizations still operate from assumptions about human potential and individual performance that are outdated, unexamined, and rooted more in folklore than in science.”5 Companies that pursue outdated methods of motivation are quick to create pay-for-performance incentives like commissions or free gifts to get employees to work harder. Yes, people have to earn a living. Wages, salaries, and benefits are what Pink calls “baseline rewards.” If those baseline rewards are not adequate, then employees will focus on the unfairness of the situation instead of delivering exceptional customer service. “But once we’re past that threshold, carrots and sticks can achieve precisely the opposite of the intended aims,”6 writes Pink. Carrots and sticks can extinguish motivation, diminish performance, crush creativity, encourage shortcuts and unethical behavior, and foster short-term thinking.
Pink discovered that for routine tasks that do not require a lot of creative thinking, external rewards can provide a small motivational boost. But for higher thinking creative tasks, the best approach is to motivate employees with a combination of praise, positive feedback, and the feeling of autonomy and empowerment.
Returning to Apple, store Specialists are paid an average of $11.25 an hour. The salary ranges from $9 to $16 an hour, comparable to wages at other retailers. The technicians who operate the Genius Bar can make anywhere from $32,000 to $50,000 a year, the equivalent salary for an assistant or store manager in another noncomputer retail store. This salary range meets Pink’s criteria of a baseline reward. So how then do you explain the fact that Apple employees are passionate, friendly, and motivated to create a superior customer experience? Intrinsic motivators make the difference.
An analysis of intrinsic employee motivation wouldn’t be complete without examining the importance of the twin pillars of purpose and praise. Pink says that Motivation 2.0 centered on maximizing profits. Motivation 3.0 seeks to reclaim an aspect of the human condition that most corporations have overlooked: the emotional catalyst of working for a grander purpose beyond just making money. Pink quotes former McDonald’s executive Mats Lederhausen who says, “I believe wholeheartedly that a new form of capitalism is emerging. More stakeholders (customers, employees, shareholders, and the larger community) want their businesses to have a purpose bigger than their paycheck.”7
The feeling of purpose relates to the discussion of vision in Chapter 1. Vision attracts evangelists. Steve Wozniak was wooed by Jobs’s vision to put a computer in the hands of everyday people. People want to know that their work is adding up to something great. Steve Jobs once said, “Being the richest man in the cemetery didn’t matter to me. Going to be bed at night saying, ‘We’ve done something wonderful,’ that’s what matters.”
Instill your employees with a sense of purpose beyond making money. Google specifically states that monetary incentives are “secondary to career growth, work environment, and engaging work opportunities.” By focusing on these qualities Google seeks to develop motivated and collaborative employees who pursue achievements not for the money but for the sake of innovation, progress, and accomplishment. One offshoot of the Google philosophy is its well-known policy of giving engineers 20 percent time: one day a week when employees can work on any project of their choosing even if it has nothing to do with their day-to-day assignments. The social media site LinkedIn has a similar program. I was invited to speak about communication skills, and it was open to any employee who wanted to attend. The presentation was held on a Friday, and I noticed other speakers as well, representing a wide variety of interests, including a yoga instructor. On one Friday a month, the company devoted the day to personal growth and learning. Employees were even encouraged to shadow peers in other departments who perform different functions. The more you show that you care, the harder employees will work for you and the more creative they will be in moving your brand forward.
I had the opportunity to speak with Google’s vice president Marissa Mayer. She told me that one of the keys to motivating young people especially is to give them a sense of empowerment and purpose. She said that employees want more than a paycheck. They want to feel as though they are contributing to the growth of the company. Mayer holds office hours each day to help people feel that sense of purpose. Office hours begin at 4:00 p.m. each day and last for about ninety minutes. Employees add their name to a board outside her office, and she gives them about fifteen minutes of time. Sometimes project managers need approval on a marketing campaign or just a few minutes to pitch their idea. According to Mayer, many of Google’s most interesting projects got their start during office hours. It gives employees a voice. They are heard, and sometimes that’s all they’re looking for.
Zappos is another company considered the gold standard when it comes to customer service. When I visited Zappos headquarters in Henderson, Nevada, I was hit with a wave of fun, enthusiasm, and employee engagement the likes of which I’ve rarely seen in corporate America. Trust and empowerment is the name of the game. Every employee I met was happy—really happy. It starts during the hiring process. Zappos CEO Tony Hsieh told me that one of the questions he asks of new recruits is, “On a scale of 1 to 10, how weird are you?” Someone who answers 1 might be too uptight for the Zappos culture. Someone who answers 10 might be too nutty!
Just as Walt Disney believed every cast member should reflect the brand, so too do Zappos employees reinforce the brand’s culture. My first taste of the culture started with the driver who picked me up from my hotel. The driver said she shared time as one of the receptionists. When I asked why she picked me up when I could have taken a cab, she said, “We do this for all our guests. We treat you as family. If your family is in town, you’d pick them up, wouldn’t you?” I was beginning to understand how Zappos grew from a start-up in Tony Hsieh’s apartment to a billion-dollar-a-year customer service champion. During the Zappos tour I noticed the office of the Zappos “goal coach.”
“What’s a goal coach?” I asked a lady sitting in the office.
“We help people reach their goals,” she responded.
“Oh, you mean teach them leadership skills or other skills related to their work?”
“Leadership is part of it, but we literally help people achieve their dreams, regardless of whether those aspirations are work-related or not. For example, one person came in this week and wanted to learn to play guitar. So we helped him find lessons. Another woman was procrastinating on the book that she wants to write, so we sat down and developed a schedule together.”
“What does that have to do with Zappos?” I asked.
“It has everything to do with Zappos,” she said.
Tony Hsieh will tell you that Zappos is not in the business of selling shoes. It’s in the business of delivering happiness—to customers and to employees. Happy employees equal happy customers, and happy customers equal big profits. It’s a simple equation that works for Zappos. It works for Apple. It will work for you, too.
When people receive genuine praise, their doubts diminish and their spirits soar. Apple employees who make a mistake are not reprimanded harshly in front of their peers. They are simply pulled aside, asked to try harder the next time, given a high five, and put back on the floor. When they do well, they are often praised in front of their peers.
Sometimes praise comes in the form of encouragement when a person messes up. Years before former GE CEO Jack Welch earned the nickname “Neutron Jack,” he almost blew up a factory for real. In 1963, early in his career, Welch was sitting in his Pittsburgh office when he heard a tremendous explosion outside. The blast blew the roof off the factory across the road. Nobody was seriously injured, but Welch admitted it was entirely his fault and drove a hundred miles to explain the incident to a corporate group executive. Welch figured he would be fired. Instead his boss was more concerned that Welch had learned something from the accident to prevent something like it from happening at his factory or any other factory, for that matter. “When people make mistakes, the last thing they need is discipline. It’s time for encouragement and confidence building,”8 Welch said.
Stephen J. Dubner, coauthor of Freakonomics, cautions, “One mistake a lot of people make when creating incentive schemes is thinking that financial incentives are the most powerful incentives going. In fact, social and moral incentives are often more powerful. The other thing to consider is what I sometimes call ‘local fame’; very few of us want to be (or will ever be) truly famous. What we want is to be famous ‘locally,’ if even for a short time—that is, known well among our peers, families, friends, etc., for having done something well and noteworthy.”9
Remember The Ritz-Carlton wow stories? Those stories are told at staff meetings so the person who played an important role in creating the customer experience is praised in front of his or her peers. Praising an individual publicly serves two purposes: it reinforces behavior the organization is attempting to replicate, and it gives the person “local fame” among peers. Praise and local fame touches people emotionally.
At Disney theme parks, leaders carry cards they use to provide instant recognition to employees who go above and beyond what is expected when serving a guest. On one half of the card, the leader describes the employee’s conduct and hands it to the cast member, an action that is often enough to make the person’s day. The leader keeps the other half of the card with the employee’s name and turns it in for a prize drawing at the end of each month. The prizes, like iPods or movie tickets, are great, but it’s the public recognition that cast members cherish. I recently heard about a school that gives “character counts” cards. The cards work in exactly the same way as the Disney cards, but instead of a supervisor handing out the cards to employees, teachers hand out the cards to students. A drawing is held at the end of every month, but instead of material prizes, a student might win ice cream with the principal. This is a proven method to encourage the repetition of positive behavior and to give your employees (or students) a chance to shine in front of their peers.
Jim Thompson is the executive director of the Positive Coaching Alliance, a nonprofit organization that has sparked a movement of 200,000 youth sports coaches, training in the group’s mission: to use sports to teach character. Double-Goal coaches are those who want to win, but also aim to teach life lessons through sports. According to Thompson, there are an infinite number of teachable moments in youth sports that are overlooked by coaches and parents who are obsessed with winning. For example, if a kid strikes out, a First-Goal coach might have a conversation with the player about improving his mechanics. A Double-Goal coach covers the mechanics but also uses the moment to teach traits like resilience, bouncing back from setbacks, and giving it your best shot.
Effective praise is a key component of the Positive Coaching program. According to Thompson, the secret to effective praise is the “Magic 5:1 Ratio”: find five reasons to praise for every one thing to criticize. Thompson calls it filling a person’s emotional tank:
We all have emotional tanks like a gas tank in a car. If it’s empty, your car doesn’t run. If it’s low, you’re not going to perform well. You can get people to do something out of fear for a short term. But the very best coaches build up their athletes or employees so they are excited and can’t wait to go to work and face the challenge. Constant criticism drains tanks. We’re not anti-criticism, but you need to offer receivable criticism. I may be right in my criticism, but if I’m draining their tank while I’m doing it, they may spend internal emotional energy resisting, arguing, and not embracing the criticism. Give receivable feedback.10
According to Thompson, praise should be offered in what he terms a “criticism sandwich.” For example, a young basketball player keeps missing three-point shots due to a lack of follow-through. A criticism sandwich would begin by praising something the player is doing right. For example, “I like the way you bend your knees, that’s where you are getting your power.”11 The praise could be followed by a constructive criticism, intended to help the player improve in a specific area: “If you remember to follow through—do the gooseneck—you’ll make more shots.” This would then be followed up with more praise, like a sandwich: “I also like the way you keep your eye on the basket after you’ve thrown the ball.” With this approach, the player gets three coaching tips, with the criticism surrounded by two praises. It fills the player’s emotional tank and helps steer the focus on improving, not wallowing in frustration.
Thompson believes the average person feels underappreciated, and surveys of workplace morale agree. Most people work hard but do not feel acknowledged, leaving them demoralized and fed up. “But in an environment where people are noticed for good things—or even for taking their best shot if they fail—they’re more likely to be fired up!” says Thompson. A great coach can turn an athlete with a lot of heart and a little skill into a standout. Michael Jordan didn’t win a championship until Phil Jackson came along (who, by the way, is a proponent for the Positive Coaching program and serves as its national spokesperson) and helped Jordan become a champion (six times)! Jackson used the same technique to help the LA Lakers win five championships. He must have done something right. See yourself as a Double-Goal coach in your business relationships: Help your employees and colleagues master “the mechanics”—the nuts and bolts of their job—while encouraging them to reach their potential as champions in and out of the office. That’s the Apple way.
Virgin Group founder Richard Branson might have put it best when he said, “My approach to being a good boss is not different from being a good father. If you lavish praise on people, people will flourish. If you criticize people, they will shrivel up.” Building an empowered workforce means giving people permission to do what they believe is right for the customer. But it also means building their confidence and bringing out the best in them. You can build people up by sowing the seeds of encouragement. Recognize their greatness publicly and praise their accomplishments.
On September 5, 2005, Steve Jobs gave a stirring commencement speech to the graduating class of Stanford University. “Your time is limited, so don’t waste it living someone else’s life,”12 he said. “Don’t be trapped by dogma, which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most importantly, have the courage to follow your heart and intuition. They somehow already know what you truly want to become.” Steve Jobs never placed limits on himself, and he certainly didn’t tolerate anything but excellence in the people who worked for him. You might not be surrounded by A-players at all times, but everyone (B-and C-players as well) is capable of rising higher if they believe in you, the vision, and themselves. Be the voice that guides others. Believe in people, encourage their potential, and inspire them to live their best lives.
1. Foster empowerment. What can you do to give your employees more autonomy, authority, and flexibility when it comes to serving the customer? Even small measures of empowerment will lead to huge returns in employee engagement and customer satisfaction.
2. Share your own wow moments. Steal a page from The Ritz-Carlton playbook and start sharing wow stories of employees who exceeded customer expectations.
3. Offer genuine praise. Praise your employees each and every day. Make your positive comments as public as possible.