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Why we are not being delighted (by the Fortune 20)

When was the last time you had a really “wow!” experience while dealing with a large company? Can you think of an encounter that you had with some big firm in the past six months or so that was especially great, where you felt surprise and delight in any way? If you are like me, you may be having difficulty thinking of more than a few, if any, such experiences.

Yet from the point of view of strategic management, we know that client delight is vital, because, if clients are not being delighted in a world of fierce global competition, the likelihood that they will remain loyal to the company is not high. Disgruntled or dissatisfied clients are likely to switch at the first chance.

This led me to inquire recently whether companies are even trying to delight their clients. So I went to the websites of the world's biggest firms and examined what they say they are trying to do. The results surprised me.

My initial pass was to examine the websites of the top 20 companies in the Fortune 500 and ask in each case: what is the principal mission of this organization? What does it say it is trying to do?

In some cases, this is relatively easy to determine, because there is an explicit mission statement. In other cases, the firm’s mission appeared from a page called “our values” or “who we are”. In other cases, where the firm’s mission is less obvious, I did my best to figure out any overriding message from the site as a whole.

What did I expect to find? I guess I was expecting to find a hierarchy of goals.

• At the low end, some firms would confess nothing more noble than simply making money, pure and simple.

• Others might see themselves in the mundane business of providing goods and services to their clients, in the spirit of Frederick Taylor and the principles of scientific management of 1911.

• Others might see their mission as satisfying clients, in the spirit of Peter Drucker who discovered in 1974 that merely producing goods and services doesn’t justify the existence of a firm: the true purpose of any firm is “to create a client”.

• Still others might be aiming to create “wow!” experiences and to delight their clients.

What the websites reveal

The results of the examination were as follows:

    Principal missions of the Fortune 20 Companies

       Principal mission       Number of companies

    No clear goal                                 3

    “Public relations” goals                 4

    Make money                                 2

    Produce goods & services           10

    Satisfy clients                                1

    Delight clients                                0

No clear goal

In three cases (Ford, Citibank and Berkshire Hathaway), there were no such statements and I was unable to determine what the principal mission of the firm is. These sites refer to various possible goals to which the firm aspires, but in the end, it wasn’t clear to me as to what the firm considers most important. This is not to say that these firms have no clear goal. But if they do, they have chosen not to communicate it on their website.

Four firms declared principal missions that I have called “Public relations goals”, because they clearly do not represent what the firm is trying to accomplish: the firm is saying things because they sound good and represent a convenient thing to say, rather than truly reflecting what the firm is about.

• GM, for instance, purports to be “reinventing the automobile and GM”: GM might be doing many things, but it is totally implausible to think that GM is principally devoted at this time to reinventing the automobile.

• Bank of America purports on its website to have the mission of “building communities”, a goal that is hard to reconcile with the announcement made on the very day of my research, July 28, 2009, that it is closing 10% of its branches or with the fact that no senior BoA official was available to comment on the announcement.

• JPMorgan Chase simply “aspires to be the best”, though in which domain those aspirations sit is not apparent from its website. Making money? Producing goods & services? Satisfying clients? All the above? From its website, we cannot tell.

• Chevron sets itself the narcissistic goal of being “the global energy company most admired for its people, partnership and performance”. How Chevron expects to generate this admiration isn’t clear.

Making money or producing goods & services

Two firms (GE, ExxonMobil) make no bones about it: their principal goal is to make money. GE softens formulation by saying that its goal is to “make money, make it ethically and make a difference”. But the bottom line is clear: GE’s principal goal is to make a buck.

At a slightly higher moral plane, half the firms are firmly stuck in the 20th Century and aspire to do nothing more worthwhile than providing goods and services. This includes: Walmart, ConocoPhilips, AT&T, HP, Valero, IBM, McKesson, CardinalHealth, CVS/Caremark and Procter & Gamble.

The place of clients

Only one firm has a principal goal that is explicitly client-centered: Verizon. It says its principal goal is to “put its customers first”.

None of the top 20 firms in the Fortune 500 have a principal mission of “delighting clients”, or anything analogous. To find this kind of mission you have to go to a firm like Starbucks, whose mission is “To inspire and nurture the human spirit- one person, one cup, and one neighborhood at a time,” or Southwest Airlines: “dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit”.

If the Fortune 20 companies are not even aspiring to delight us, should we be surprised that they are not accomplishing it?

The consequences of the goal

The fact is that these firms have simpler, less ambitious goals, with significant deleterious consequences.

The majority of the firms see themselves as “making money” or “producing goods and services”. This in turn leads on to particular way of managing: bureaucracy. Once the firm sees itself in the business of producing things, then command-and-control and hierarchy becomes the logical way to structure and manage the firm. Work is carried out by following a plan devised by management. Communications are on a need-to-know basis. Productivity gains are made by downsizing and outsourcing. The picture isn’t a pretty one: the workplace that ensues from this way of organizing is less productive than it could be, dispiriting to the people doing the work and dissatisfying the customers they are supposedly doing it for. These firms are in a vicious cycle.

If, on the other hand, a firm starts from the goal of delighting clients, then bureaucracy ceases to be a viable organizational option. Instead the firm will naturally gravitate towards some variation of self-managing or self-organizing teams, because it is only through mobilizing the full energy and ingenuity of the workforce that the firm is likely to have any chance of success of delighting clients. Once you have self-organizing teams aimed at delighting clients, then downsizing and outsourcing are seen in their true light as fundamentally counterproductive to everything the firm is trying to accomplish. Instead, doing work in an iterative fashion, focusing on completing work in each iteration and radical transparency between managers and workers become necessary elements to achieving the goal. Happily, when firms get into this mode, they find that there is no need for downsizing or outsourcing: relentless self-improvement is a normal and natural way in which self-organizing teams evolve.

These are two different ways of organizing and managing. One is a downward spiral with devastatingly negative economic, moral and social consequences. The other is a virtuous circle with happy consequences for firm productivity, job satisfaction and client delight.

One way of organizing is the past. The other is the future. It is a question for each firm to decide which world they want to live in.

Principal goals of the Fortune 20 Companies

 Rank  Firm  Principal goal: firm websites as of July 28, 2009
 1  MobilExxon  increase shareholder value
 2  Walmart  saving money to help people live better lives
 3  Chevron  to be the global energy company most admired for its people, partnership and performance.
 4  ConocoPhilips  operate safely
 5  GE  make money, make it ethically, make a difference
 6  GM  reinventing the automobile and our company
 7  Ford       ???
 8  AT&T  deliver high-quality customer service
 9  HP  help people and companies address their problems and challenges
 10  Valero  supplies fuel and products that improve people’s lives
 11  Bank of America  build strong communities by creating opportunities for people — including customers, shareholders and associates — to fulfill their dreams
 12  Citibank        ???
 13  Berkshire Hathaway        ???
 14  IBM  a values-based enterprise of individuals who create and apply technology to make the world better
 15  JP Morgan Chase  aspire to be the best
 16  McKesson  help create a health care system where quality is higher, mistakes are fewer and costs are lower
 17  Verizon  put our customers first by providing excellent service and great communications experiences
 18  Cardinal Health  make healthcare safer and more productive
 19  CVS/Caremark  improve access for patients, promote better health outcomes, and control payor costs
 20  Procter & Gamble  provide branded products and services of superior quality and value that improve the lives of the world's consumers

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