Walmart’s company-wide goal is to create zero waste. (Photo credit: Wikipedia)
Have you ever had one of those “big company” customer service experiences that make you wonder how the company stays in business? One year when I was CEO of a software company, I had an aggravating experience with the hotel we booked for our staff during a Las Vegas trade show.
We negotiated a very low rate with an off-strip hotel to minimize our costs. We booked more than 30 rooms for an average of three+ nights and used the conference rooms to meet and entertain customers. At the last minute, I decided to go a day early but forgot to call the hotel ahead of time. Luckily the hotel had a room available, but as the desk clerk reached for my credit card she said the rate for the night would be $199, which was the full-price rack rate at the hotel. I explained that I was with the large group checking in, and that we had negotiated a rate of $129 per night. She said that because I hadn’t reserved the room early I would have to pay the full price. Thinking that maybe her tune would change, I pulled the “do you know who I am?” card.
I explained that I was the CEO and the one who had specifically chosen this hotel. She was not impressed. She repeated her mantra: Because I hadn’t reserved the room ahead of time, their policy was that I had to pay the full rate. I decided to give it one more try and explained that we were unlikely to use this hotel in the future if she couldn’t change my rate to the negotiated price. I asked if I could speak to a manager. This didn’t help my cause, and she adamantly said that she was the manager on duty. At this point I knew I wouldn’t win the argument, so I resigned myself to find another hotel for the night.
Some of you are probably thinking that the problem was just a bad employee. And that hiring good employees to what is a relatively low paying job is almost impossible. My reaction was totally different. This employee actually impressed me as being quite capable. She was patient and courteous in dealing with me. She was efficient checking people in and greeted everyone with a welcoming smile. She just made a really bad decision.
This experience and many others have led me to realize that most of my frustrating experiences in dealing with companies are not because of anything unique about the particular employee I am engaged with at the time. Instead, I have come to believe that the cause is almost always a lack of alignment between the goals of the company and the goals of the employee and his or her direct workgroup.
I can just imagine how such a misalignment happened at this hotel. I bet the hotel manager’s number one goal was to increase revenue. This is an obvious and worthy goal. After analyzing the situation, someone probably decided that their average price per room was lower than their competitors, and that they should focus on increasing their average. This was translated down to the next level as a policy of no discounts for walk-in customers. Voila! In three easy steps you go from a perfectly appropriate goal to a policy that can actually work against the higher goal of customer satisfaction and repeat business. Each step in the process was a reasonable decision, but it led to a bad outcome. Because the employee I dealt with didn’t understand the reason for the policy and the higher-level goals, she could not see that her action was probably not in the best interest of the hotel.
The situation where employees take actions that they believe are totally correct but works against the broader interests of the business have led me to my definition of a “big company.” A big company is one where otherwise perfectly competent and productive employees consistently make decisions that are opposed to the success of the company. This is because their goals are not aligned with the high-level goals of the organization. Understanding that these problems are alignment problems and not employee problems is critical to maximizing productivity.
How do you avoid the “big company” problem? Make sure that you have a clear system in place that aligns the goals of each employee with the goals of the organization as a whole. It is possible to get alignment no matter how large the organization.
Just look at Walmart, the largest civilian employer in the country. With Walmart’s ad match guarantee, you can walk up to any register and say this item is a dollar cheaper down the street at Target. Unlike most stores where the cashier would have to call over management or go through a big process, the cashier will just take the money off the purchase price.
The goal for a CEO should be to get every employee to make the same decision the CEO would make given the same situation. This can only occur if each employee is aligned with the goals of the organization.
