Chapter Two
‘There’s always a little element of bravery when you start a new project. It’s a bit like jumping in the deep end in a way. You don’t know exactly where you’ll come out so you need to stay true to your core purpose – it becomes the compass that guides you.’
SONU SHIVDASANI, FOUNDER, SIX SENSES
Purposeful leadership takes courage and conviction. It has two main responsibilities. The first is that leaders must be clear and committed advocates of the purpose in their public and private words and deeds. The second is that they must take decisions for the business that are in line with the purpose. The second is probably harder than the first for many executives who, however committed personally to a sense of higher purpose, are under pressure to show results in the short term, either to shareholders or to the city. But it is business-critical for leaders because purpose drives company profits.
Leaders who display a profound commitment to purpose do not have to be as charismatic or as high-profile as Richard Branson or Steve Jobs, or as controversial as Robert Stephens (Geek Squad) and John Legere (T-Mobile) – we shall hear more about them later. In this book, for example, we have included examples and case studies of companies who are not well known other than to the customers they serve. But their businesses are purposeful and the leaders are enthusiastic and committed to their purpose, whether their business is connecting people, laying floors or running a hotel. They all ‘declare a future that others commit to’ but only because they commit to it too. It therefore follows that the most important quality that any leader must have above all else is authenticity – a genuine belief in the purpose to which they are asking others to commit.
Daniel Pink in his book Drive (2009), which looks at motivation within organizations, argues that wages are not the main motivator for most – if not all – people. ‘ The best use of money as a motivator is to pay people enough to take the issue of money off the table,’ he argues. ‘Pay people enough so that they’re not thinking about money and they’re thinking about the work.’
He goes further and gives a clear warning to leaders who focus on the short term and on that other ‘p’ word:
‘When the profit motive gets unmoored from the purpose motive, bad things happen.’
For example, one of the big news stories of 2012 was Hurricane Sandy. This ‘storm of the century’ caused 85 deaths and left 8 million people on the eastern seaboard of the United States without power for several days.
It was interesting to see how brands responded to this event. Some, such as the fashion retailers American Apparel, Gap and Urban Outfitters, saw this as a sales opportunity and quickly launched a campaign. American Apparel targeted customers in the nine stricken states who were ‘bored’ at home and invited them to visit American Apparel, offering a 20 per cent discount, saying ‘In case you’re bored during the storm, 20 per cent off for the next 36 hours’. Not unsurprisingly, consumers reacted with anger at this commercialization of what was a terrible event for many people, and Twitter and other social media channels were buzzing with outraged customers voicing their opinions about the apparent lack of sensitivity.
However, some other organizations chose to respond differently. For example, two of the P&G brands, Duracell and Tide, found ways to help consumers in their hours of need and, in so doing, created goodwill for the brand.
P&G’s purpose is ‘to touch and improve more consumers’ lives with more P&G brands and products every day’. Here’s how they brought this to life during the crisis. Duracell sent mobile charging stations to Lower Manhattan so that people could charge their mobile phones and connect with loved ones. Tide loaded a truck with 32 washer/dryers and sent it out on the streets so that people could wash their clothes. A cynic might argue, however, that this was just another form of marketing. That might be true in terms of the long-term effect but the fact is that the first response of these brands was to ask what they could do to help, rather than what they could do to sell. They behaved in a way that was motivated by purpose rather than profit.
As we cited in the Introduction, the annual Edelman study on trust has found that consumers are increasingly inclined to favour those brands that have a social conscience and are prepared to give something back to the world: 66 per cent will recommend or buy from a brand that supports good causes. However, the study also found that customers were more influenced by how these brands behave in their everyday business operations rather than the extent to which they might donate to good causes. So, being purposeful is much more about the choices and decisions that you make as a company than having a CSR policy.
It is more about behaving in a purposeful way than ‘doing good’
Consumers will also ‘vote with their feet’ when a brand that they admire in every other respect is found to be doing the wrong thing for society. A perfect example of this is the 25 per cent boost in sales for Costa Coffee that parent Whitbread announced in 2013 as a result of consumers boycotting Starbucks after it was revealed that the brand had paid just £8.6 million in UK corporate tax for its 750 stores since 1998.
Mitch Markson, chief creative officer of Edelman, said this in their report:
‘Purpose is now the “fifth P” of marketing. It is a vital addition to the age-old marketing mix of product, price, place and promotion.’
Many would argue that purpose is the sixth ‘P’ of the mix because ‘people’ are the fifth ‘P’, but this does not negate his conclusion. Those brands that are transforming their markets through the customer experience share a common approach to business; they have a purpose beyond merely making profit – and their leaders are making decisions based on fulfilling that purpose.
Sometimes, leaders force themselves to ‘go back to’ a sense of purpose. When organizations grow, particularly at a fast rate, that growth can come without intentionally focusing on purpose. While that is good in the short term, it poses a dilemma in the long term and sets up a potential crisis of identity for the brand. The result of this can be for a company to effectively create a generic market that lots of competitors come into, ‘stealing’ their clothes, aping their proposition and eventually undermining their growth. It is therefore vital to a branded business to stay true to its purpose as it grows so that it remains differentiated in the eyes of consumers from the competition it creates.
The Nando’s fast food chain, which specializes in Mozambique-style chicken, is an example. In 1987, Robbie Brozin and Fernando Duarte borrowed money from friends and family to buy a cafe called Chickenland, which sold Mozambique-inspired cooking in Johannesburg, South Africa. They renamed it Nando’s (after co-founder Duarte’s first name), and began to grow a global brand. They now have more than 1,000 outlets in 23 countries as diverse as Namibia and Bangladesh, and their famous Peri-Peri sauce can be found all over the world. In 2010, they were identified as one of the 30 hottest marketing brands by the magazine Advertising Age. Their culture has always been brand and people focused, with a spice to it that reflects the vibrancy and piquancy of its signature Peri-Peri chicken dish. This includes a list of ‘Ten Don’t F… Withs’ that is core to the running of the global franchise and it includes the logo!
Nando’s is famous for its product. But its founders are very conscious of its purpose and, as the brand has grown, they became concerned that a sense of purpose was being overlooked. Brozin told the marketing magazine The Drum that ‘as the brand took off, South Africa became irrelevant in the Nando’s world’, which he described as ‘the saddest thing that we could do’. Brozin continued, ‘For me every brand needs a soul and [although] our brand heritage is in Mozambique the first restaurant was in South Africa and from here it went global. It’s actually very easy to lose your heritage as the business gets bigger and you can lose a sense of purpose. For me, any business needs a strong sense of purpose, and it would be so sad if we had a business that was successful but never had a purpose, and that purpose is really the soul of Africa to a certain extent.’
In 2015, Nando’s undertook major new investments in its store experience as part of its next stage of growth and has decided to go back to its roots and celebrate South African design. It launched a ‘Heartfelt Celebration of South African Design’ project at the core of its refurbishment. This produced a collection of items such as chairs and tables made by 12 South African designers showcased in its stores globally. It has also launched the ‘Hot New Designer’ competition in South Africa. Any designer, amateur or professional under the age of 35, competes to develop a pendant light to be displayed in its restaurants globally.
The investment in these activities, and their introduction as part of enhancing the customer experience, will reinforce for both employees and customers the distinctive promise of the Nando’s brand and communicate a sense of its higher purpose to bring South African culture to the world.
Stay true to your purpose as you grow
Purposeful leaders are constantly obsessing about this subject. They recognize the dilemma that happens as you grow quickly, in that growth can be so fast that it can obscure your purpose. Soon you become just another one of the ‘big guys who run the market’ rather than the cool guys challenging it. It’s a dilemma that Innocent foods faced when they were acquired by the Coca-Cola Corporation (CCC). How could this cool, quirky little brand whose purpose was to put ‘the best food and drink into the most people and places’ survive when it was gobbled up by the sugar-loaded, carbonated soft-drink global behemoth? Some people predicted that having sold its soul it would lose its appeal to consumers. Richard Reed, one of the co-founders of Innocent, saw it differently. He argued that the decision to sell to Coca-Cola was exactly in line with the brand’s purpose. What was the best way for Innocent to fulfil its purpose? Was it from a small factory in west London, where it was headquartered? Or through one of the world’s largest food and beverage distribution systems, which is what CCC offers? The answer is clear when you look at it that way.
As Angela Ahrendts, the former CEO of Burberry and now senior vice president of Apple, said:
‘There is always this balance between hard and soft strategies, investment and intuition, but if you have a greater purpose, it becomes relatively easy to make those calls.’
Robert Stephens faced a similar dilemma to Innocent when he sold his Geek Squad to Best Buy. His sense of ‘greater purpose’, as Ahrendts put it, helped him to decide what to do, as he explains here:
‘It seems there’s always this paradox: either you’re small and you’re loved or you’re large and everybody hates you and you lose your soul.
I thought, what about if you had a vision around growth and you really do care about the customer, why can’t you do both? So that was the goal I set when I sold the Geek Squad to Best Buy. I talked to other business founders and asked “Should I sell my company?” and they said, “No, you’ll hate it, you’ll quit the company.” But I decided to defy that advice. Just because you’re a founder doesn’t mean you can remain the CEO beyond a certain point, so I stayed with Best Buy to find out what makes a top company perform.
‘I’d go and sit in meetings – way too many meetings – and try to figure out, why are these meetings not really going anywhere, why aren’t they talking about what’s important? At first I assumed, “Well, they’re smarter than I am and I have a lot to learn.” Then after a while I came to believe something different. I don’t really think they have a compelling purpose here. There are just competing political priorities. So I stayed to make sure that Geek Squad didn’t die. I stayed 10 years and we expanded into the UK and went into China. People ask me if I regret doing it, and I say no, because there is not another Geek Squad out there. There’s no one else of our scale.’
Purposeful leaders show the way
One of the most important ways that people learn what a leader’s true motives are, is by what they see him or her do – not just say. This is a principle summed up by Carlos Ghosn, the CEO of Nissan, one of our featured case studies:
‘Don’t believe what I say; believe what I do.’
Herb Kelleher, the former CEO of Southwest Airlines, a company that remains the ‘gold standard’ case study for customer-centricity, was also unusual in that he was famous for behaving in ways that were ‘on brand’. Herb used to fly as often as he could on his own planes or, if he wasn’t travelling, he would meet passengers when they were boarding or leaving the planes. He would share a joke with them or a drink but always he would be asking them about their experience, which helped him to understand how to improve it. Southwest Airlines featured Herb in many of their adverts: reinforcing their key messages, showing the connection of the leader to his customers and always with the company’s customary sense of humour.
https://www.youtube.com/watch?v=HCoTlCEbJrc
Leadership at Procter & Gamble, as you would expect of one of the world’s most successful consumer goods businesses, is religious about its purpose. When AG Laffley became its CEO in 2000, he faced a crisis. P&G had announced that it would not meet its profit target and the share price had tanked, falling by almost one-third in one day. When Laffley later discussed how he diagnosed the problems facing the company and turned the business around, a core theme was the importance of getting ‘up close and personal’ with consumers – a leadership behaviour that he himself demonstrated by visiting the homes of consumers and inviting them in to P&G laboratories and workshops. This is Laffley explaining those twin responsibilities in a Harvard Business Review article he wrote, entitled ‘What only a CEO can do’:
P&G’s purpose is to touch and improve more consumers’ lives with more P&G brands and products every day. Of all our stakeholders, both outside and inside, the primary one is the consumer. Everybody knows that the customer is king; we knew this in 2000 as we know it today. But we were not acting on what we knew. That had become apparent to me in 1998, when, as executive vice president, I returned from an assignment in Asia, where we didn’t have reams of research data on consumers and markets. In China, for instance, we had no choice but to visit consumers where they lived and observe them where they shopped. Coming home to our global headquarters, in Cincinnati, I was struck as I walked the office halls by how many employees were glued to their computers and how much of each day people spent mired in internal meetings with other P&Gers. We were losing touch with consumers. We were not out in the competitive pressure cooker that is the marketplace. Too often we were working on initiatives consumers did not want and incurring costs that consumers should not have to pay for. Everywhere I go, I try to hammer home the simple message that the consumer is boss. We must win the consumer value equation every day at two critical moments of truth: first, when the consumer chooses a P&G product over all the others in the store; and second, when the consumer or a family member uses the product and it delivers a delightful and memorable experience – or not. Almost every trip I take includes in-home or in-store consumer visits. Virtually every P&G office and innovation centre has consumers working inside with employees. Our employees spend days living with lower-income consumers and working in neighbourhood stores. At our global headquarters we replaced dozens of paintings by local artists with photographs of everyday consumers around the world buying and using P&G brands. All these efforts keep the two moments of truth foremost in the minds of P&Gers as they work.
Laffley retired as CEO in 2009, having doubled P&G’s sales to over $83 billion during his time there. Unfortunately, his chosen successor, Robert McDonald, endured a difficult time. The company struggled to address changing consumer trends towards value rather than premium products in a post global financial crisis world. McDonald stood down as CEO in 2013 and Laffley returned to replace him. In one of his first internal memos to all employees, Laffley reminded them of where true leadership lay: ‘the consumer is boss’, he wrote.
Laffley’s words illustrate the importance of a leader doing ‘small things people notice’ such as replacing the office art with pictures of consumers, of visibly role-modelling behaviour by visiting consumers himself. He insisted that in-home visits with consumers be arranged for him in whatever city he visited. Executives at P&G realized that if the CEO could make time to visit consumers in their homes, so should they.
What you believe in and what you demonstrate determine what kind of leader you are. In 2014, Howard Schultz, the CEO of Starbucks, was named one of the world’s great leaders. His face appeared on the cover of Time magazine, an iconic symbol of fame and achievement. Starbucks opens a new store somewhere in the world every 12 hours and serves around 44 million customers per week. But it was not for the sales growth or profits that Schultz was honoured; it was for his qualities as a leader. He was voted into a list of world leaders compiled by Fortune magazine that included Angela Merkel and was topped by Pope Francis! Schultz has championed an empathetic style of leadership that puts his people and his customers ahead of profits, since he first began steering Starbucks as an ‘experience’, not a coffee shop.
Speaking about his leadership style, Schultz said the following:
‘The currency of leadership is transparency. There are moments where you have to share your soul and conscience with people and show them who you are and not be afraid of it.’
Schultz wants his people to care passionately about each other and the customer, which is why he is so insistent on talking emotionally and showing empathy. He demonstrates the brand he wants customers to experience. It’s why he called his book Put Your Heart Into It. As we said earlier, though, even Starbucks was found wanting when it came to paying a fair share of taxes in the UK, as perceived by customers, which goes to show that purposeful brands have to achieve this delicate balance between doing the right thing for customers, for employees, for shareholders and for society at large. No easy task.
Robert Stephens cites T-Mobile’s CEO as another example of a purposeful leader taking decisive action in line with a customer-driven purpose:
‘My favourite CEO in the world right now is John Legere of T-Mobile: irreverent, maverick, a rebel. Now, you can be a crazy guy, wearing the T-shirt and wearing the brand and, you know, that lasts for about 10 minutes, but why is he my favourite CEO? It’s because he seems to naturally, authentically blend enthusiasm for his job. Authentically he’s himself. He doesn’t have any social media handlers. He’s on Twitter. He’s one of the few CEOs who is on a major social media channel and is engaging.
http://mashable.com/2015/02/17/john-legere-spoiled-ceos/
‘What he did is to simplify the data plans and policies for T-Mobile. He did what every carrier should have done, what every retailer should have done, and what Best Buy still hasn’t done, which is simplify the policies.
‘And not just because that’s a great headline, but because it actually saves money in the business, because if your policies are simpler, guess what? You need to spend less money on training. There’s less customer misunderstanding. If you have complex policies, the employees are probably going to make mistakes, so you’ve got to pay money to train them and write manuals, and you have to audit those people to make sure they’re doing it.
‘But John Legere comes in and says, “These data plans are too complex. Let’s simplify them.” Done. And that’s why if you’re in third or fourth place, you’ve got far more to contribute to the world than if you’re in first place, because you’ve got less to lose, so you should be taking more chances, you need to be even more bold as a challenger brand.’
For an interesting LinkedIn article on Legere see: http://linkd.in/1Lf4fSg.
Throughout the books we have written, we have featured the visible habits of leaders that show their true motivation. Here are just a few of them:
Virgin: Richard Branson has reaffirmed his intention of being aboard the first Virgin Galactic passenger flight into space, despite the tragic accident in 2014.
John Lewis: managers have particular responsibility for their ‘buddy stores’.
Harley Davidson: managers must ride with their customers.
Procter & Gamble: managers visit consumers in their own homes.
Amazon: an empty chair is included in board meetings to represent the customer.
JCB: Sir Anthony Bamford personally inspects the vehicles as they are coming off the production line, and orders adjustments according to customers’ needs.
Carphone Warehouse: management sit not in the head office but in the Sales Support Centre.
Umpqua Bank: CEO Ray Davis answers the phone just like every other employee with the words ‘Welcome to the world’s greatest bank’.
Purposeful leadership is about behaving, not saying
So what are the competencies that make leaders so effective in creating a purpose-driven organization?
Think about a positive experience that you recently had with a company. Why was it positive? You probably felt that the person at the other end really cared about your concerns and had the power to do something about your situation. Most times, great customer experiences worth talking about are associated with ‘going the extra mile’.
How can leaders within companies create cultures that support a purposeful brand and deliver great customer experiences?
First and foremost a leader must create ‘a foundation of care’ according to Claudio Toyama, a leadership coach (and also a TED Fellows coach). Claudio explains this concept:
Purposeful leaders create cultures where employees fully engage with the company, its purpose and its customers. Employees must FEEL like they matter and what they DO matters.
Care creates commitments – and when employees care, they are committed to serving the customer in the best way they can. This, in turn, causes employees to act in ways that positively impact the customer experience.
Southwest Airlines is an example of how care translates into great customer experience and decades of consistent profitability in an industry that has been hit by high oil prices, recessions and cut-throat competition. This US-based no-frills airline provides services that are efficient, safe and fun, and they have a reputation for going the extra mile to make the customer’s experience enjoyable.
Care per se is not enough to create great customer experiences. Leaders and employees must also have the necessary skills and competencies to deliver great customer experiences that are on brand and on purpose.
But building this kind of culture is not easy. There are certain essential competencies that leaders must demonstrate. The Leadership Circle® found two primary leadership domains: creative competencies and reactive tendencies:1
Creative competencies – these include skills such as bringing out the best in others, leading with vision, behaving authentically, acting with integrity and courage, and focusing on ‘whole-system’ improvement and community welfare.
Reactive tendencies – the self-limiting traits that emphasize caution over creating results, self-protection over productive engagement, and aggression over building alignment. These styles focus on gaining the approval of others, protecting oneself, and getting results through high-control tactics.
Whilst the above may seem obvious (and similar concepts have been discussed at length in leadership books for years now), why is it that so many leaders are still driven by the reactive rather than the creative? And when the leader is reactive, the culture becomes reactive. Purpose doesn’t stand a chance.
In our many years of experience of helping brands implement customer experience and driving purpose throughout the organization, we know the one thing that is guaranteed to see the initiative fail is lip-service leadership, ie leaders who ‘talk’ creative, but behave reactive.
Organizations can however nurture great leaders by promoting and teaching the creative competencies and helping leaders let go of their reactive tendencies. But it starts with leaders opening themselves up to a ‘warts-and-all’ self-assessment and a readiness to embrace the idea of personal development. (So often leaders are the first to advocate a training solution for the management team and front line, but the last to accept that they themselves may need further skills development or training).
A good first step is for the leader to take a leadership assessment and work with a mentor to gain a true understanding of their creative competencies and reactive tendencies – and how these impact the culture and delivery of the brand purpose and customer experience. This enables a very personalized and tailored approach to coaching the leader in the specific competencies that he or she needs to create a true ‘culture of care’ and a purpose-driven organization.
Behavioural change does not happen overnight and must be constantly reinforced. For this reason, the third step is often executive coaching. Coaching helps the leader to get in touch with what he or she cares about, to see possibilities for action where he or she didn’t see them before and to get the support needed to implement changes.
The leader as coach has become a popular theme in business. This does not mean that the leader has to be all ‘soft and cuddly’ or so consensual as to seem indecisive. It does mean that the primary job of a leader is to provide clear direction, to encourage his or her people to excel in pursuit of the purpose and to give those people ‘every chance to succeed and no excuse for failure’. That requires, as Claudio says, the ability to ‘listen’.
Captains of ships have known through the ages that the way to navigate through dangerous waters is to have a clear course to steer – one that leads to the ultimate destination whilst avoiding immediate hazards. Unless ‘captains of industry’ have this same clarity of purpose they will find their organizations continually tossed about in the continuing turbulence ahead. Customer experience innovations that are disconnected from the brand purpose become mere marketing gimmicks. Nor can you navigate your business solely through your profit and loss account, NPS or any other metric, because they are essentially a record of where you have been. You also need a compass to know where you are headed too. That compass is your purpose and it is evident to consumers which brands have one and which do not.
One industry where differentiating by creating meaningful experiences for customers is becoming increasingly important is hospitality, particularly the hotel sector. There are so many hotel brands all promising similar things that it is only by having a strong sense of purpose that leaders can begin to create a culture that drives a different kind of guest experience.
A brand that is challenging the way that this sector operates and is doing so with a strong sense of purpose is citizenM. Founded by Rattan Chadha, it opened its first hotel in Amsterdam in 2008 and has since opened hotels in Rotterdam, London, New York, Paris and Glasgow. CitizenM’s purpose is to offer affordable luxury to its target customers, defined as ‘mobile citizens’. It is a great example of a brand driven by purpose that is winning a growing legion of fans. Here, Rattan explains how he had his insight into founding a purpose-driven brand and how he has been zealous in ensuring that the brand stays true to its purpose.
Image 2.1 citizenM logo
Rattan Chadha – citizenM chairman
The insight
The idea for citizenM started when I owned the fashion retailer Mexx. We had 1,200 stores in 56 countries. It was a big business and by the time I left it was turning over more than €1 billion per year in sales. I had about 100 designers working for me in fashion design; they were all in the age range of 25 to 40 years old, from 26 different countries. I insisted that they travel every month – to New York, Paris and London to look at the new trends and absorb whatever they could in order to create differentiated and desirable collections. Every year my design director would come to me and say there was a hassle with hotels, because these kids didn’t want to stay in bland, boring budget hotels and we couldn’t afford to let them stay in five-star hotels because they were travelling so often. They refused to stay in a Holiday Inn Express or a Ramada Inn or a Travelodge, which is what the budget allowed for, and so they always found some bed and breakfast somewhere far away and then spent more money on taxis. Some of the places they were staying in were not in safe areas.
So that planted something in my head about the absence of ‘hybrid’ hotels. I experienced hybrid in almost everything else I was doing. For example, I wear an Armani jacket with a shirt from Zara or Gap. It doesn’t mean that I don’t have money; it’s a choice. And that choice didn’t exist in hotels. I finally said ‘I’ve got to take this on, this whole idea of a hybrid hotel.’
I actually recruited all the senior team before I had a site, before I had the name. We had nothing except about 12 to 15 people on the payroll. I spent millions at that time just figuring out how to design a hybrid hotel. What are the things that are important and what things are not important? We looked at the current hotel industry and asked ourselves ‘How can we change all this and cut the waste?’ We did about 500 interviews with travellers around Europe. I did many of those interviews personally.
We heard the same story every time. A traveller goes to a city for business. They go to the hotel and dump their bag and check in – single occupancy for 80 per cent of the time, usually people travelling on business. They run out of the hotel, do their work, come back in the evening at 6 o’clock and then have a shower, do some e-mails in their room maybe, come down to the bar, have a drink while they wait for people to take them somewhere for dinner. Then they would come back to their room, watch TV and get a good night’s sleep. And the same pattern the next day or they would leave. And that pattern was consistent.
We added our own frustrations of travel into the story. For example, arriving in Hong Kong and waiting in a queue behind 20 Japanese tourists to fill out this silly registration form; the hotel has all my details, I’ve stayed in the hotel five times before, but I have to fill out my name and address and sign here, sign there, do this, do that. So the whole idea of self check-in came from the frustration of standing in a queue to check into a hotel. I also noticed that most people working on reception and at the concierge desk do not ever step out from behind their desks. As a customer I have to go to them and stand in a line to ask for their help. But half the time the concierge is on the phone and I have to wait. What the hell do these guys do? The other crazy thing about five-star hotels is that before I get to the hotel I’ve carried or wheeled my suitcase all the way from Amsterdam to Hong Kong; I’ve been wheeling it through airports and into taxis but to get it from my taxi to my room I suddenly need help according to the hotel. I just stayed in a Four Seasons Hotel in Paris where you pay €1,200 per night for a standard room. The guy who took my bag was wearing an immaculate uniform that must have cost at least €1,000. He dropped my bag and then stood there for that extra five seconds and that killed the entire experience for me. How much shall I give him, €50 because I don’t have change? Should I ask him for some change back? Shall I tell him I’ll pay him later? Such a frustrating experience. Hotels insist on giving you what you don’t want rather than what you need.
Stand up – purposeful leadership
We took a clean sheet of paper and said ‘I want this price.’ We started with the price because we want people to be able to afford it. Then we said ‘I want a hotel that I will not be embarrassed to tell people that I stay at. It has to have great style, great design and have all the things that are critical to my stay. I don’t care about the rest.’ The third starting point was the people working at the hotel. We said they are not to do any functional jobs; they are there for the customer, nothing else. Everything else we will outsource. So that created the blueprint of what we were trying to do.
That led us to work out how to make it affordable for this kind of customer. For example, I don’t need a wardrobe large enough for me to stay for two months; I carry one suit when I go for two days or three days to a city. So we thought how we could use space more effectively. A lot of the people told me we were crazy, because we should build more rooms and make the lobby small. I said, ‘But the lobby’s my living room. When I go home how much time do I spend in my bedroom? I go to my bedroom, I dump my bag and maybe I change and then I come down to my study or my living room, somewhere I can relax or work. Why would I stay in my bedroom? Why should a hotel be any different?’ So we created the lobby as a living workspace and we said, ‘Let’s extend the public space for people to relax and work.’
We have tables, computers, TVs, fireplaces and books on display because I want it to feel like it’s home, not a hotel. We have hundreds of books; I want people to use the books but people say that guests will steal them. You know, guests in my house may also take books away; I don’t care. The experience for me is more important than worrying that the guest might take a book home; I want them to feel at home.
Rattan’s last point goes to the heart of what is wrong with so many brands and why, as the Havas survey shows, 73 per cent of them could disappear and people wouldn’t care. Brands are too often built with the business in mind rather than with the consumer or customer in mind.
Our vision would have been easy to realize if it was a five-star hotel, but it was difficult to achieve because it had to be done within our target budget. That meant that staffing had to be very low. We couldn’t afford receptionists. We couldn’t afford a concierge. We couldn’t afford housekeeping if the room was complicated to clean. I wanted a maximum of 10-minute clean-up per room because that means the room costs me £5 to clean instead of £25. So everything was driven from that desire to make it affordable, because as soon as you let that vision go it becomes too expensive to make the concept work.
We wanted everybody to be a concierge. That became the idea of our ambassadors; everybody’s equal, everybody does the same thing. One of the things we recognized early on is that the single most important thing for me in a hotel is if I can recognize a person or they recognize me. If everybody is available where the guests are, they get to know the guests. When I’m checking in it’s the same guy; I go and get a coffee, it’s the same guy; I need help, it’s the same guy. I figured they will be much more in contact with guests if they are floating around at what I call the ‘moments of truth’, the interaction points – they will get closer to the customer. If you look at TripAdvisor they say the ‘service is fantastic’; actually we do nothing, we’re just there standing next to you. We don’t fill out forms, we don’t fetch you a cup of coffee, we don’t even get you a glass of water; you do it yourself. And yet we rate a consistent 9 on TripAdvisor.
I want to be the Starbucks of hotels because it gives you easier operations, so it is very cost-effective. Second, it gives you brand building; you’ll be a dominant force. So when you go to London, if I have one hotel you might not stay because it might not be convenient for you, but you cannot escape me if I have six. Remember, a citizenM hotel has only a few hundred rooms, and I believe we have many more mobile citizens who would like to stay with us. I can’t build a hotel of 2,000 rooms on one site but I can build 2,000 rooms across multiple sites – it’s a question of having the rooms to satisfy my customers.
The key is to do one thing and try to do it right. Stick to who you are. I’m the brand director here, 100 per cent. I say ‘This is not right for citizenM’. I said no to so many locations. Great financial deal, but I’m not touching it. Why not? Because my customers are not going to come here, this is not coherent with what citizenM is all about.
It needs a lot of discipline to build a brand. I’ve learnt that the hard way. It takes a lifetime to build a brand, to build a true brand. In fact citizenM, the brand book, was ready before I had the first site: the entire brand book, including room design, the living rooms, everything. I imagined a hotel and from that I decided what it was going to look like; this is what the mattress is going to be like; this is how dark I want the room. The people who don’t get our DNA think our coloured lighting is a gimmick – and copy it, but what they don’t realize is that it’s not about the f*****g lighting – it’s about the whole concept, the citizenM DNA.
Note
1 http://leadershipcircle.com/wp-content/uploads/2012/02/Bowling-Green-Validity-Document-Final.pdf