Why A Culture of “How” Beats “What”

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Jul 1, 2016

We live in a VUCA world (volatile, uncertain, complex, and ambiguous) and every day our employees encounter situations and questions, particularly with customers, that go beyond the expectations of normal business. How can we guide them to make decisions that support organizational goals and growth objectives when there’s no manager or executive in sight? The answer is to focus on How not What.

Recently, I had two different hotel experiences that brought that challenge home. The first was in Las Vegas. I had plans to meet a group of girlfriends for a weekend. Unfortunately, I caught a virus and needed to cancel. Though I knew my hotel reservation could not be cancelled on less than 2 days’ notice, I called the hotel and asked if they could do something for me. I didn’t even want my money back but I thought they might transfer my reservation to a different day.

Not a chance. The person I talked to could not believe what I was asking. Her tone was belligerent. She put me on hold to consult a manager. 20 minutes went by but I was curious so I stayed on the line. When she finally returned, she did not remember who I was or what I was calling about. I explained again. She went for the manager again. Another 20 minutes. The manager finally came on, and he did not know what I was calling about so I needed to tell the story again. With a voice dripping in condescension, he told me the policy was clear, there was nothing he could do for me, and hung up.

A month later, I visited a nearby Ritz Carlton to have a leisurely lunch with a friend. We had a wonderful time with great food in a great setting. The waitress seemed to catch our mood perfectly. I mentioned to her how much I liked the salad dressing. After we’d paid the bill, she returned with a gift box she had put together. Inside was a bottle of the salad dressing. I was touched and surprised, and offered to pay for it. She insisted that it was her gift to me because she knew how much I had enjoyed the dressing. This interaction felt completely authentic and meaningful; I was delighted.

Impressed, I took some time to study Ritz Carlton and talk to some executives. I learned each employee is authorized to spend up to $2,000 per incident on a customer at their own discretion in order to ensure that the highest standard of customer service is met. As CEO Simon Cooper puts it, “The concept is to do something, to create an absolutely wonderful stay for a guest. Significantly, there is no assumption that it’s because there is a problem. A lot of the stuff that crosses my desk is not that they overcame a problem but that they used their $2,000 to create an outstanding experience.”

The new era organization

I have no doubt that the employees of both hotels were doing what their organizations wanted. The first organization represents a traditional rule-bound and transactional business model which has been successful for a hundred years. The Ritz Carlton, however, is typical of a new era organization that is value-based and purpose-driven.

The business of the organization is its “What” – what goods it produces, what services it provides, what solutions it offers. The culture of the organization is its “How”– how it makes decisions, how it views customers, how it thinks and feels, how it treats people. All organizations balance these two modes in order to function in the world — much like human beings rely on both sides of the brain. But in most organizations, what is an urgent priority while how is usually taken for granted.

It’s the how that makes the difference

New era organizations like Ritz Carlton believe it’s not enough to do what exceptionally well anymore in order to succeed because what can change at the drop of a hat. By focusing on how they know they can respond faster and better to any new situation or challenge.

That’s a distinct advantage in a world rife with business disruption. Markets shift. Competition gets crowded. Technology alters the game. Customers have needs that don’t fit the rules. The ability to solve problems where and when innovation is needed is absolutely critical today. Managers can’t be everywhere and rule books will never cover the unexpected nor empower people to do what’s best for unique situations.

Organizations must disperse decision-making to employees as much as possible if they wish to be nimble, focused, and feisty. Model and show them the how. They’ll figure out the what.