Customer Culture: How FedEx and Other Great Companies Put the Customer First Every Day

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Everyone talks about creating a "customer-centered culture." In CustomerCulture: How FedEx and Other Great Companies Put Their Customer First Every Day, the executive who pioneered FedExÕs legendary customer culture shows exactly how to go beyond talk and make it happen Ñ for real! Drawing on lessons learned at FedEx, Michael Basch identifies key cultural obstacles and leadership failures that dilute customer focus, and demonstrates exactly how to build systems and structures that help good people deliver ...

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Overview

Everyone talks about creating a "customer-centered culture." In CustomerCulture: How FedEx and Other Great Companies Put Their Customer First Every Day, the executive who pioneered FedExÕs legendary customer culture shows exactly how to go beyond talk and make it happen Ñ for real! Drawing on lessons learned at FedEx, Michael Basch identifies key cultural obstacles and leadership failures that dilute customer focus, and demonstrates exactly how to build systems and structures that help good people deliver outstanding service.

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Editorial Reviews

Booknews
A former management team member at FedEx and other innovative firms uses the FedEx start-up story as a model of the theory, application, and results of his CustomerCulture process of creating values-driven, customer-oriented organizational culture. Chapter titles include "the Phoenix dog piss theory" (referring to new managers marking their territories). Lacks exercises and references. Annotation c. Book News, Inc., Portland, OR (booknews.com)
Soundview Executive Book Summaries
How to Put Customers First Every Day
Michael Basch was a key member of Federal Express' founding team - a team that instilled into the company an extreme dedication to customer service, making it a legendary model for the transportation industry. In CustomerCulture, Basch shows organizations how they can develop outstanding customer service at all levels of customer contact, thus maximizing performance and accountability.

CustomerCulture is divided into three parts: The Theory, The Application and The Results. In the book's first part, Basch explains how the theory of customer culture works and uses Federal Express as an extended case study to reveal how the theory was originally built and developed.

'Get The Packages'
When Fred Smith launched Federal Express in 1973, the company got off to a very bad start. Although it was the first new airline in America in 20 years, and the first all-package airline ever, only six packages arrived at its hub in Memphis that first day, and only two of these were from customers (the others were from salespeople testing the system). By the end of the week, the package count was down to one. Learning from its failure, Federal Express trudged ahead to create a service culture that would bring it much better fortune over the next 30 years. It all started with a vision: "Get the packages." By allowing everyone in the company to interpret this vision in his or her own way, Basch writes, this vision gave the organization the strength that eventually made it unbeatable in the marketplace.

Basch admits that Federal Express' strong service ethic was not built by design. It grew from the valuable lessons learned from employees during the early days. According to Basch, Fred Smith started with a People-Profit ethic. His idea was to focus on employees, and they would produce the profit. He wanted to build a people-first company, and added the word "service" to the equation, creating a mantra that is still a primary guiding force for the company: People - Service - Profit.

Basch offers several inspiring stories about how customer-service representatives made the extra effort to please customers and fulfill the get-the-packages mandate from the company's leaders. Basch emphasizes that failure is the feedback of a well-designed system. The company's employees had the freedom and the focus of a clear vision to use that feedback to take the necessary actions to achieve the goal. The "systems cycle of goal/relevance/action/feedback is natural and is not clouded by politically driven motivations that get in the way of success," Basch explains.

Delivering Value
Basch provides specific actions that can be taken by any organization to build a customer culture. These actions include focusing every employee on activities that lead to sustained, profitable growth. Sustainability means focusing on customers, profitability means delivering enough value so that the customer pays for profits, and growth means focusing on sales without compromising customers or owners. FedEx (as it is now called) succeeds because - even in the midst of a major effort to use technology to bring down costs by automating tracing information functions - the company still enables frustrated customers to speak with a person, Basch writes.

The third part of Basch's book demonstrates how a customer culture is built in a small dental business, a technology start-up and as part of a turnaround process. By focusing on a small customer-culture business (a dental practice in Brisbane, Australia) Basch demonstrates how the ideas that FedEx uses can be adapted to a smaller scale.

Why Soundview Likes This Book
Michael Basch explains how a customer-focused culture can be developed using step-by-step instructions and colorful stories about dramatic experiences. His positive focus and lighthearted accounts of satisfied customers create a compelling backdrop for his rock-solid lessons about creating a successful organization. Built on the ideas that helped FedEx become a billion- dollar company, Basch offers a plan that any organization can use to improve customer service. Copyright (c) 2002 Soundview Executive Book Summaries

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Product Details

  • ISBN-13: 9780130353313
  • Publisher: Financial Times/Prentice Hall Books
  • Publication date: 6/11/2002
  • Series: Financial Times Prentice Hall Books
  • Pages: 304
  • Product dimensions: 6.32 (w) x 9.33 (h) x 1.02 (d)

Meet the Author

MICHAEL BASCH was a founding officer of FedEx, where he spent 10 years as Senior Vice President. He was part of the explosively creative management team that took Fed Ex from 0 to $1 billion, as it built a company cited by Fortune as one of the decade's most well-managed companies. Basch led the teams that invented Fedex's bar code tracing system, built its SuperHub, and founded the FedEx Logistics Division.

Before joining FedEx, Basch spent eight years with UPS in Sales, Personnel, Operations, and Industrial Engineering. After leaving FedEx, he founded and served as President of Service Impact, a firm specializing in advancing the art, science, and practice of leadership.

He is currently Chief Information Officer at Enalasys Corporation, a company based in Calexico, CA that develops advanced energy management system solutions that enable governments and utilities to manage energy usage in homes and small businesses.

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Table of Contents

Foreword
Introduction
Pt. 1 The Theory 1
Ch. 1 America, You Have a New Airline and ... a New Standard of Service 3
Ch. 2 Systems Drive People 21
Ch. 3 Vision 41
Ch. 4 Values as Words Versus Values as Actions 53
Ch. 5 Goals 63
Ch. 6 Relevance 73
Ch. 7 You Can't Manage or Innovate What You Can't Measure 95
Ch. 8 Extraordinary Service Is Delivered By its Creators 109
Pt. 2 The Application 121
Ch. 9 The Phoenix Dog Piss Theory 123
Ch. 10 Big Companies Are Like Big Ships - Slow to Move and Slow to Change 131
Ch. 11 Systemize the Routine: Humanize the Exception 141
Ch. 12 The Single Egg Organization 151
Ch. 13 The Hierarchy of Horrors 161
Ch. 14 The Seven Dynamics of Change 171
Pt. 3 The Results 189
Ch. 15 The Paddi Lund Story 191
Ch. 16 Anatomy of a Start-Up: Innovation in Action 209
Ch. 17 Anatomy of a Turnaround: Customer Culture in Transition 223
App. A The Vision of the Ideal at a Federal Express Station 241
App. B The UPS Philosophy as Stated by Its Founder 251
Index 267
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Preface

Introduction

Culture drives performance in an organization. Culture is everything. As one Chief Executive Officer (CEO) recently put it: "Get the culture right, and your people will do what is necessary to serve their customers and make owners piles of money." Put an average human being in an above-average culture, and the person will change behaviors to adapt to the new culture. Change the culture in an existing company, and the people will change with it.

An organizational culture is a system. That system can drive people to high performance directed toward profitable customer loyalty, or it can drive apathy, internally directed, or any number of destructive "customer cancerous" activities.

We are creatures of habit. Action and reaction are programmed early in life, and we respond the way that we have always responded, unless there is a change in the action/reaction structures, which are those structures that give us the opportunity to experience pleasure or to avoid pain.

Nearly all that we do is conditioned by habit, and habit is the result of culture. Build a culture where the behaviors you desire are clear and recognized, and people will gradually build habits around those behaviors. Then, the organization will habitually serve its customers with ever-increasing value.

People change, not because managers direct them to change, but because they find themselves in a culture where personal change is in their best interest.

Assuming you, as a corporate or group leader or even as an employee, want to become part of changing the way that people behave in some way, you must change the culture that these people operate in. In effect, youmust change the system or the action/reaction paradigm that makes up your corporate (or family) culture.

People instinctively adapt to the culture they step into. If the culture is high performing, people will be high performing or will leave if they are not willing to perform to the cultural standards.

CustomerCulture is about consciously building the customer-centered organization where employees are focused on serving their customers (internal or external) for sustained, profitable growth.

Back to systems that drive our behaviors. Some simple examples of systems in action?

You step into a shower and turn the water on. With one hand in the water and the other on the valve, you gradually move the valve until the water is the right temperature. You sense the water temperature, unconsciously compare it to the temperature you desire, adjust the valve to change it if it's not right, and continue to go through this cycle until the temperature is right.

Over time, innovative people and manufacturers develop valves where, as a customer, you set the right temperature on the front end and simply turn the water on.

This is a simple example of how systems work and how customer focus evolves products and solutions to customers' needs.

Another example...

You're late for an important appointment. You get in your car and quickly accelerate up to the speed limit. You constantly look at the speedometer and press and release the gas pedal to reach the optimum speed. You observe the traffic and what is going on around you and take the necessary actions to minimize your time on the road and to meet your goal of getting to your appointment on time.

Over time, innovative people and manufacturers developed cruise control, and now you simply get your car up to speed and press the button to maintain the ideal speed. Your mind and behaviors can then concentrate on other issues, increasing your performance.

These are two simple examples of systems in action.

You have a goal, whether it is the right temperature or the right speed. The goal is relevant to you at the moment. You take action to meet the goal, and you get feedback. If the goal is not being met, the cycle continues with another action and feedback until you have reached equilibrium (satisfaction) in the process.

On a macro scale, this becomes an evolutionary process. You go through the goal, relevance, action, feedback cycle again and again in nearly everything you do. As you go through this cycle, you get inventive looking for solutions to make it simpler, easier, faster, less expensive, more comfortable, and so forth.

The people and companies that do this constantly are the evolutionary forces that continue to grow and innovate in their never-ending quest for finding better ways. This is the definition of CustomerCulture.

The purpose of this book is to (a) consciously develop cultural structures or systems to get your employees into this process and (b) look for better, more cost effective, and more valuable ways to serve your customers.

When you have every employee and every customer looking for ways to improve your effectiveness as an organization, you grow and thrive.

When these simple and natural cultural structures are given conscious direction in an organization, the organization performs at much higher levels. People have a sense of purpose and learn to work together to innovate and grow constantly.

A company or organization either grows or decays. There is no steady state over time. Change and growth is a core human need and phenomenon. It cannot be denied. It is possible, however, to set up the success structures to relearn your business every day.

This book is about getting conscious about understanding cultural structures and building and applying them in ways that enable you and your people to relearn your business every day, to help you constantly grow in delivering products and services focused on customers, products, and services that customers are willing to pay for and that make you lots of money.

CustomerCulture seeks to apply a systems foundation to your cultural structures and then to provide examples of how systems thinking built Federal Express, United Parcel Service (UPS), Larson-Juhl, a very exciting dental practice, a company turnaround, a start-up, and many other companies.

The principles discussed in this book go back nearly 100 years to UPS and its vision. They were then applied at Federal Express during its embryonic phase and currently are being applied by companies exercising these principles both in revamping existing cultures and starting up new businesses.

Federal Express is the primary example because I participated in the initial development of the culture from the ground up. The company's culture has withstood the test of time and continues to flourish against enormous competition from one of the best companies in their industry—UPS.

Little is known about UPS, but it is one of the strongest, if not the strongest, company in existence today. It is nearly 100 years old and has developed a business that makes nearly every career management employee (supervisors and higher) a millionaire by the time they retire. It has consistently performed through tough times, is relatively debt free, and has a very low employee turnover rate in an industry with high turnover. Finally, I defy anyone to catch a UPS driver napping on the job.

Larson-Juhl is a privately held midsized company (1,300 employees) that dominates its market for the manufacture and distribution of picture-framing products. Larson-Juhl is run by a visionary CEO who has demonstrated the success that comes from walking the talk when it comes to the values that drive an organization.

To round out the example companies with a smaller business, we use an eight-person dental office in Brisbane, Australia. Paddi Lund, the dentist, went from near suicide and working 60 hours a week making average dental pay to a by-invitation-only business.

This business makes two and a half times as much as the average dental office, locks its doors, took its name out of the phone book, and fired 75% of its customers. Paddi's book, Building the Happiness Centered Business, has been a favorite for the small business that wants a CustomerCulture. Many of his principles have been applied to larger businesses as well.

A couple of examples are also shown from organizations that have what we call a cancerous culture, a culture that drives people away from the customer and toward self-serving, destructive practices.

The principles in this book can be applied to family, nonprofit groups, or any number of other group activities where there is a desire to change behaviors to better meet the needs of the people who are part of the organization and its mission.

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  • Anonymous

    Posted September 23, 2002

    Michael Basch knows how to build EFFECTIVE People Systems

    This book did a great job of identifying how to systemize the process of customer service. I use the add-a-line report on page 98 to bring focus on a vareity of activities in my business. This alone was worth the time invested in reading the book.

    Was this review helpful? Yes  No   Report this review
  • Anonymous

    Posted January 4, 2010

    No text was provided for this review.

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