Creating a unique workplace

An astute American broadcaster, Edward R. Murrow, once said: “The obscure we eventually see, the completely obvious takes longer.” He wasn't joking. An American study of 3000 firms some 15 years ago compared the top service providers with companies where service is a weakness. The service leaders had double the growth rate and twelve times the return on sales. Superior customer service has always paid off, but now it's become an essential of survival in every field. International rivalry will make product quality a given. Already competing airlines fly similar planes to the same airports. And most companies around the world produce TV sets of comparable quality. And that's what's happening in most industry sectors. As products mature, technology brings parity.

Giving companies that excel in delivering service a crucial advantage in the one essential precondition of growth, and that is, picking up new customers while keeping the ones they've got. There is certainly no mystery about how to keep customers and get new ones. What is so strange, though, is why so many companies spend five times as much finding new customers as they do keeping their established ones. At Four Seasons we believe that if we give our customers value, they will give us a profit. And that has been proven over time. The essential question then iss: “What do our customers consider as top value?” In our case, market research said it was luxury. But luxury is more than elegant surroundings and gourmet meals. It's not just something you build in – it's a feeling you have to induce. When we looked closely, it became clear that the greatest luxury for our customer was time. And service could help them make the most of that.

You also need to give them greater productivity and greater enjoyment, as well as consistent, reliable service with a personal touch. We don’t just sell customer facilities – we sell customer effectiveness. What better luxury could there be? Of course, designing service to help busy people make the most of their precious time can be challenging. Because we can't pre-check it or sample it – production and consumption are simultaneous. The outcome in our industry normally depends on front line employees: doormen, bellmen, waiters, maids - the lowest-paid people, and often, in too many companies, the least motivated. These front-line employees represent our product to our customers. In the most realistic sense, they are the product, its personal component. So to win or even survive the coming service battles, customer satisfaction must be everybody's business.

As every sports fan knows, any team that plays short-handed will surely lose the game. To be at the top of our game at Four Seasons, we have to get service standards down to the bottom of the pyramid, by far the hardest job in everyday management. And that process begins for us with our hiring policy. Most companies hire for experience and appearance, how the applicants fit the company image. We hire for attitude. We want people who like other people and are, therefore, more motivated to serve them. Competence we can teach. Attitude is ingrained.

When we opened the Four Seasons George V in Paris we interviewed 12,000 applicants for 350 jobs, each applicant four or five times, and the last time with the General Manager. A rigorous, highly selective, expensive procedure, but minor compared with the cost of struggling for years to change habits that come with ingrained poor attitudes. But attitudes can change in the wrong environment, now known globally as the corporate culture. And since environment is the major determinant of behavior, culture is either an asset or a liability, a disincentive to work or a company's motivating force – depending on whether or not it gives employees what they want.

Surveys in North America show that most managers believe that what employees want most is job security and competitive pay. But job security is currently tentative, and while salary is certainly a consideration, other things matter much more. But polls find that employees in these firms value, primarily, three things. Firstly, to work for leaders who demand and inspire their best. Secondly, a physical environment that makes work enjoyable. And thirdly, a sense of purpose, and a feeling they're working for more than a pay-check.

The fact that they're helping build a company is something they can take pride in. Great companies are like armies, which fight for a common purpose, creating a sense of unity and belonging that breeds teamwork. We may live in a work-world of reason, intensified by technology, but every customer perception, every employee response, is governed by feelings and beliefs. And when employees feel their future is linked to that of a company whose values they share, it inspires belief in, and commitment to, that company's success. In every area, we push down responsibility, from head office to our general managers, to department heads to our frontline, to the hourly-rated employees to whom we give authority to make most decisions they feel are needed to satisfy guests. We treat these frontline people as members of an elite team. We set challenging goals. You don't want a complacent ‘good enough’ attitude creeping in as it so often does.

And that's why, early on, I told our managers that 99 percent in terms of guest satisfaction is not good enough. “Mr Sharp,” they said, “you're asking for the impossible. Something goes wrong in our hotels every day that we can't control.” And I said, “You're absolutely right. That happens, but that's not what I'm talking about.” We had about 20 hotels then, each accommodating about a thousand guests a day. “If one percent of those people are dissatisfied,” I said, “statistics show that each of them, in conversation with friends, will complain on average to 10 others. That could negatively impact more than one million people a year, a huge potential loss. So the question is, what do we do about it?” What we did was set a goal of zero mistakes. Inevitably, of course, mistakes occur. But by trusting our employees to use their common sense, and by making a sincere effort to help – and I emphasize sincere – you can turn mishaps into new service opportunities.

Then, what the customer remembers is not the complaint but the outcome. And in that sense we usually achieve 100 percent performance and customer defections are rare. Managers addicted to labor control have long claimed that high standards frustrate and dishearten employees. But in our experience, performance rises to meet expectations. The resultant customer satisfaction boosts confidence and self-esteem. And living up to that growing self-image keeps raising performance levels. That's what distinguishes leaders from managers. Managers can get people to do what they're told. Leaders get people to want to do whatever should be done.

Our managers are less bosses than mentors and communicators. Their role is to bring out each individual's best, weld them into a winning team. By being up-front and open. Letting people know how they're doing and by being accessible and visible. And communication is crucial. For employees to act on their own initiative, they have to know our priorities. And we have to know what our customers are saying to them. We have to recognize their contributions and listen to them consistently. Because employees also want their contributions recognized. They want to know that what they're doing is useful and meaningful. Accomplishment gives us pride, along with enthusiasm, assurance and the motivation and ability to live up to our self-image. And we nourish these feelings by giving employees feedback.

Great performance, to be repeated, must be recognized. We pay as much attention to employee complaints as to guest complaints. We upgrade employee facilities whenever we upgrade a hotel. Disallow class distinction in cafeterias and parking lots. Establish career paths and promotion from within. And we augment the physical atmosphere with a wide range of benefits. As one employee quoted by Fortune puts it, a little exuberantly perhaps: “Great pay, great perks, great food.... I'm treated like a five-diamond hotel guest.”

We have always had an implicit operating philosophy. But in 1982, as we expanded, I decided to make it explicit. Spell out our goals, our beliefs and values. Tell everyone how to act. Give us a reference point from which to ask: “Does this deal, this decision, this action, square with our values?” I tried to put this into a few words and took it to our senior people. Some scoffed, called it trite and unnecessary. Some agreed, but only in principle, implying no intention of acting it out. That bothered me. So I sat down with our public relations director and detailed a formal credo based on the golden rule. The cornerstone of what would later be called our corporate culture. In essence, to treat others – all others: customers, employees, partners, suppliers – as we ourselves would want to be treated. There was nothing new about this, of course.

Even back in 1982, such credos were common – though seldom believed. What was new was that we enforced it. Senior managers who couldn't or wouldn't walk the talk were all winnowed out within a few years. It was a painful process, personally distressing. Perhaps the hardest thing I ever did. But the fastest way for management to destroy its credibility is to say employees come first and to be seen putting them last. It’s better not profess any values than not live up to them.

Of course conceiving a vision and strategy is relatively easy. The hard part was selling it. Getting it down to all levels of employees. That became my task, and it continues today. I became an evangelist, preaching the gospel of service every day and on every trip to every hotel. Continuously restating it. Developing it. Reinforcing it by rewarding and celebrating outstanding performance. Focusing employees at every level on one priority: giving customers added value through service. And that's the way it has to be. To change bottom-level attitudes you have to start at the top.

Your colleagues are either with you or against you. They're either your strongest supporters or worst saboteurs. We all know that as managers we live in a glass house, every action watched and discussed on the company grapevine. If we're seen showing greater concern for power, prestige, and costs, instead of for the customer and the values we profess, then we forfeit belief and trust, along with our goal of being the best. Because employees won't commit themselves to a company they don't believe in and we can't communicate across a trust gap.

Trust is the unseen and too-often neglected determinant of corporate success. It's the emotional capital of leadership: building community spirit, certifying communication and fostering teamwork. It's the essence of the brand-name, and a synonym for customer loyalty. It's the sum of our reputation, turning one-time deals into long-term relationships. And relationships are essentially what business is all about. That's the ultimate secret of service success: acting out the values encoded in the golden rule, the most profound behavioral statement ever made. A universal principle compressed to one simple sentence. We've yet to go into a country, undeveloped or sophisticated, where upholding the Golden Rule hasn't brought employees on side.

For example, we went into Maui in Hawaii when relevant employees were scarce, and we signed up a lot of laborers from the sugarcane and pineapple fields, workers carefully screened for positive attitudes. And within a year they made Four Seasons Maui number one in the island. And every year that service culture grows stronger. We see the effect every day in every hotel. Employees develop a camaraderie that deepens year on year, creating a sense of community that makes cooperation the norm.

This growing strength was illustrated more profoundly than any of us could have imagined during the tsunami crisis in Southeast Asia. When the wave approached and struck our hotel in the Maldives, each employee acted intuitively to ensure the comfort and safety of our guests and each other. They did everything they could think of to ease minds and calm nerves and some were even credited with saving lives. Within 24 hours they evacuated the island and chartered a plane that flew every guest to safety.

Following the tsunami there was an out-pouring of gratitude from guests who had been saved. One wrote, and I quote, “Let me stress that your group's strength. . . rests on rock. . . made up of the local employees who, while having been selected for doing their job well, have shown in a time of utmost crisis a level of dedication that no training and no amount of money can ever generate.” Clearly, our employees' actions that day touched our guests in ways they will never forget. What they accomplished in the midst of adversity may sound extraordinary, but I suspect any of our employees around the world would act with the same dignity and grace. And equally, any company determined to nurture the full potential of every willing worker from top to bottom, can tap a unique source of leadership and success for the 21st Century. And that is what we have learned over 45 years of business at Four Seasons.

The Great Place to Work Institute, Inc. is a research and management consultancy based in the U.S. with International Affiliate offices throughout the world. For more information see www.greatplacetowork.com. All rights reserved.