I was recently invited to Las Vegas to give a keynote at the Airport Exchange News Conference at Caesars Palace. Above is a a video with the full presentation, or you can read the transcript below!
>> Transcript Begins <<
I want to do one thing real quick, take your hand like this, go like this. Every time I ask you a question that you say “Yes.” To, you put one finger up at a time; just don’t start with the middle finger.
My first question is, is 2019 going to be the year that you continue to reinforce efforts to improve your employee experience? Are you content with your customer experience? Do you feel like it’s good, but it really needs to get great year over year? And the last one, and you have to be truthful, don’t BS me, are you hung over right now?
My man right here’s got three, see. All right, now you can put your hands down, guys, thank you so much. I’m going to give you a lot of entertainment and engagement, but a lot of education as well too. I do not have enough confidence to stand on the stage and give you guys theory that I haven’t tried, I haven’t tested, and aren’t orange true, so I’m going to introduce you to something called the people first culture, the three piece strategy, some micro customer experiences. And then we’re going to evaluate customer wants and needs and why it’s so difficult to really understand what your customers need to build an experience that they’ve never seen before.
But before I do that, I need to borrow a few minutes of your time, because I need to let you know what I’ve been up to for the last decade; but I promise you, it’s not going to take more than 10 minutes to explain this to you. And the reason I do this is because regardless of our industries, if they’re similar, or if they’re maybe the same, or how big our companies are.
I recognize that there’s a couple big ballers in the audience that have billion dollar companies and, I’m not there yet, but if we strip everything away, the industry and the size of the company, what the commonality is, is we’re managing one thing: human behaviour. The expectations of our employees and our customers must be managed to build a people first culture.
In 2007, I was a young professional trying to really understand what I wanted to build my career off of; what was going to be my niche or my nitch? And I looked at PR and biz dev, and I was like “That sounds cool and all, but what could be my thing?”
And I had just left business school because I wasn’t an academic, I didn’t come from a wealthy family, so I paid for my own post secondary. But I lasted three semesters, it didn’t make sense to me to pay and then I wasn’t engaged, I wasn’t learning.
So at the time I live in Vancouver, Canada, and there was two real juggernaut companies, at the time, to work for. 1-800-GOT-JUNK, you’ve ever seen the garbage trucks driving around? If you’re not familiar with the company, a guy started in 1989 knocking on people’s doors, being like “Hey, do you have a couch, a fridge, an ex-husband or something you want to throw away and pay me for it?” That company now just $400 million a year in sales, system wide, across the globe.
And the great thing about that business is one owner, no outside [inaudible 00:05:17], one owner, no debt, like “Oh man, that’s an amazing business.” The other company was Lululemon, the athletic apparel company. I applied for both, and then I was hired by both companies, and I chose one 1-800-GOT-JUNK because they had just won the Best Workplace in Canada Award by Maclean’s Magazine as a medium sized company. That is a massive achievement, and it was it garbage company; nothing about that makes sense.
But I joined the company, and I started off in the call center answering 100 calls a day. I didn’t grow up wanting to be a call center agent; no disrespect to the industry, but it’s just nothing I aspired to do. But I knew that that was going to be my stepping stone to understand how companies are grown and take my career from there.
It was in year one that I read a Harvard Business Review article, and they were talking about a term that I’d never heard of before; I wasn’t even taught it in business school when I was there for three semesters. And it was ‘Customer experience management’. And it made sense to me. You build an organization that have systems and processes happening behind the scenes to enrich the lives of your customers, and you grow an organization, organically, through referrals, and repeat business, and being an admired brand, and all these great things.
So I said “That’s it, that’s my PR equivalent.” And it was super niche, 2007 nobody was really talking about it; shortly after, Zappos was the company that was really taking off, leveraging customer experience management. I soon realized that there is no customer experience if two things don’t happen first: build a people centric culture and focus on your employee engagement and their experiences as well too; it just can’t happen. And I’ve seen this, I’ve worked with many businesses, to this date, and it’s just impossible to do it, genuinely.
I was at 1-800-GOT-JUNK for five years, I was promoted five times in five years because I gave myself to my career. I knew where I wanted to be, in Las Vegas speaking at conferences like this, but I knew I needed to cut my teeth first and earn some credibility.
So I went ahead and Got Junk, we launched Net Promoter Score program complaint resolution systems, built customer centered training material for thousands of employees, and many other good things. In 2012, I woke up one morning and, literally, it was kind of one of those movie moments, I looked myself in the mirror after brushing my teeth and said “I’m done.”
Not because there was any resentment for the company; I loved 1-800-GOT-JUNK, but I wanted to scratch that entrepreneurial itch. So I started off and I built an advisory company, I called it Falcon Consulting Group, and I made sure that it was a group because I had the aspirations of growing this massive agency. Truth be told, I operated it from my parent’s kitchen table, and my only employee was my dog; so it never got bigger than a group or than one person, it never became the group that I aspired it to be.
But one day I got an email from an executive of Verizon Wireless, and just before that like, literally 24 hours before that, my biggest client was Ferguson Moving and Storage based in Vancouver; about a $2, $3 million company at the time. So I went from $3 million to $100 billion, and I was like, “I better figure out how to write a proposal, and I probably got to get a phone line that’s not my parent’s house line.”
So Alfa Romeo, Blue Cross Blue Shield, McDonald’s Canada, that companies started getting bigger and bigger, and I was advising them and working on some strategic initiatives, building content, hosting workshops, and giving keynote speeches for them.
But then in 2016, I realized “I’m bored.” I was lonely, actually. Traveling to conferences and everything is fantastic, traveling to go speak at or work with clients, eventually that drink by yourself in the lobby bar gets really lonely. So I said “I want something else.”
I moved to Toronto and my business partners and I now have grown a portfolio of restaurants and bars on King Street in Toronto. And we’ve gone from two years ago, just under that, we went from zero employees and zero dollars in revenue to just over $15 million a year in revenue, and 150 employees and we’ll add another 75 employees within the next three months, when we open our next venue.
The things that I talk to you about today are the tried, tested, and true initiatives that we’ve deployed. And, again, I’m not a theory guy. Yes I wrote a book, but the book talks about all of the strategies; ones that I’ve worked and ones that haven’t worked. And I’m very transparent about that and that’s something that I’m looking forward to sharing with you guys.
Every company wants to build an organization like this. They want to recruit and onboard a high performing team who have high engagement, and they take care of their customers. I don’t think anybody that would say “You know what? That’s not for us here at our business.” But why is it that some companies succeed and others fall short of actually achieving this within their business?
I sat on this for months before I developed and wrote the book, and I created something I call ‘The people first culture’. Now on the surface it’s very simple, you build a business that your employees and customers admire. But again, if we agree that that’s something we could subscribe to, why doesn’t everybody do this within their business? Not just quarter over quarter, but decade over decade?
So I sat on this some more, and I developed something I call ‘The three P strategy’. The three Ps is what hinges everything together: purpose, process, and profit; in that order. So let’s do this again by leveraging the three Ps strategy. We recruit and we onboard high performing professionals, we understand the purpose of three key entities.
What is the purpose of our company?
What is the purpose of our customers?
And what is the purpose of our team members as individuals, not as employees?
Once we’re able to create alignment behind that and have clarity within the organization, department to department, what we’re going to experience is genuine engagement. Then and only then can we start building processes that will enrich the lives of our customers and our employees.
If you have ever built a strategic initiative, and you’re like “I can’t wait to deploy, this is going to be so great.” On paper it was fantastic, your project management teams came together to develop this, and then it fell short, or it wasn’t adopted like you thought it was going to be adopted?
When I advise companies, I ask them to generally ask themselves “Are the team members that are living within these processes actually engaged?” Because we may have gone out and built the processes for them, but neglected that these are going to fall short unless our team members have high engagement to live within these processes; because they are the ones that push them forward.
As leaders, we are the ones that often build them, or have them built with our teams, but we have to make sure that our front lines and our junior and senior managers are able to live within them within high engagement, because that’s when adoption happens.
Once we’ve built these processes, we are able to take a step back as leaders and allow these engaged professionals to deliver an experience to our customers that they’ve never seen before. Then is our reward; profit is a reward, it’s not an outcome. And please know that I’m an extraordinarily profit driven entrepreneur; it’s just how I go about it might be a little different than others.
I’ve trained myself to think long term, because the initiative that we build today maybe it doesn’t pay us an ROI for 12 to 24 months, and I’m okay with that, I’m patient. Because I know that I’m managing something that’s very sensitive and it’s human behavior. Think about your personal life for a second, the person that’s your best friend, your aunt, the person you married; that took time to build that relationship, and now it’s fruitful.
So why is our relationship with our teams any different than that? Strip that all away, it’s just human behavior that we’re trying to manage; but yet we’ve trained ourselves to think short term. And I get it, many of you guys probably have to report the street, every quarter, I get that. But how we find a balance between having to do that, and building lasting relationships internally and externally with our customers and our employees?
I said that there’s three key entities with purpose: the company, the customers and our teams, as individuals. I want you to pretend that we’re at McCarran airport, a beautiful airport and I’m sitting at the gate, and we happen to start talking and I ask you a very loaded question. I say, and I want you to think to yourself, “How would I answer Michel’s question if he asked me this?” What is the purpose of your company, if I asked you that, how would you respond?
And this is the rule guys, if you do not want me to pick on you and call you out, divert your eyes because if you … Yeah, see, this always happens. But if you don’t want me to, but if you want to engage, Keep your eyes on me, and we’ll engage; I don’t bite, I’m good.
So, what is the purpose of your company? I told you I was going to pick on you guys first. So, I want the three of you, because all from the same company. How would you respond to me if I asked you what is the purpose?
It’s customer service.
Okay, so put that in a tight phrase, just button it up.
Delivering exceptional customer service.
Provide a great experience.
Same thing? Okay, that’s cool and that was super rehearsed, so, but let me ask you this. If you went around to each … How many stores? Seventeen?
Eighteen. If you went around to your [inaudible 00:15:54] employees and asked them the same question on the same day, let’s say, would you get the same answer in a buttoned up way?
Probably wouldn’t. And I’m not trying to undermine you guys, because have we included that in onboarding and our training? I was taught when I was a lot in my earlier years as a young professional, that building a culture is a little more than the sports team, a little less than a cult; it’s right in between.
And to be able … Look it sounds funny, but it’s kind of true; and for me alignment absolutely matters. And that’s something that is extraordinarily actionable for you guys to go back to your place of business and ask, just department to department, just randomly do it on a certain day ask, “What is the purpose of our company?”
You see, a company like Nike, their purpose isn’t to build great products. It’s to stand behind things that they believe in, even if it’s not popular, and even if some of their customers are going to burn their gear. Did anybody see the Serena Williams? That was powerful video that came out; if you haven’t, Google it immediately after this powerful. And notice that in the video they talk about nothing about their products, that is an outcome of having alignment behind a strong purpose, and they’re a pretty high performing company.
Here’s a company, you’ve probably never heard of Pela Case. What you see here is a bio degradable cell phone case. Now Matt Bertulli is the founder of the company and he’s in my entrepreneur group. And when you ask Matt “What is the purpose of your company?” He doesn’t say “It’s to build biodegradable cell phone cases, it’s to build a company that’s not going to harm this planet.” That’s just one of their products.
And when I asked him, I said “Really, is the market big enough?” He’s like “Yes, we’re serving a community of zero wasters.” And I said, “An emerging group of consumers called zero wasters, how many people are in this, like 76 people?” Oh, he’s like “No, there’s actually millions of people that will only buy products that decompose on their own or last at least 25 years.” And that’s the market that he’s going after. That is the purpose, the outcome are these products.
In my organization, our purpose is embedded within the mission of the company, what you’re looking at here is something that we borrowed from Starbucks. That’s an apron and we stitch the purpose and the mission inside the apron so our team members see it every single day. And it’s simple “To consistently deliver seamless experiences.”
It’s not to deliver seamless experiences to customers, it’s to everyone that interacts with our brand; the media, the people that sell us steak and vodka, those suppliers, even the government. We went through an audit, and I told my find finance team, I said “Guys, they are our best customers, we treat everyone the exact same way.” That is the purpose, the outcome of this is a great steak, a great bottle of wine, a great experience for our customers by having strict alignment.
I have a rule, five by three, and I highly recommend adopting this. Five times a week, three times a day I will walk around our venues … And we have them all congested in a one block radius in downtown Toronto. And five days a week, three times a day I will ask somebody, at random, “What are our five core values, and what is our mission?” And if they’re not able to recite that, I ask our managers to take them off the floor, get trade alignment behind that before they can go back and interact with our guests.
I know it’s a little cult like, but alignment matters; aligning a company behind the North Star of the organization really matters. If you’ve ever asked yourself or been frustrated by “Why aren’t they getting it?” It’s probably this, there’s probably no alignment but the purpose of the company, or the purpose might be viewed differently by them than by you.
One thing I know very well, because I worked in a call center where I was answering 100 calls a day for about a year, and that might sound exhausting, but picture this. I had the longest average handle time in our hundred person call center, and the reason why is because when you call the phone for someone in the US, and the first words that come out of their mouth are “Michel? You don’t know sound like a woman.”
And then you’re like, “Sorry Joanne from Florida, in Canada we do things a little bit differently.” Anyway, so the first three minutes of the call was burned because of that having to explain that. One thing that I know after taking all these calls, I didn’t just want to sit in my seat, remember I had goals for my career.
So I said “I’m going to start documenting these common traits and behaviors that these customers have, because I can’t speak to the same customer in Sydney, Australia that I can Calgary, Alberta or Fort Worth, Texas; so I started documenting all of these notes, pages and pages and pages of notes. And I developed something called the ‘Three common customer personality types’ which was adopted by the organization; I’ve implemented it in Alfa Romeo and many other companies like that.
Now I don’t know her personally, but if Ellen DeGeneres was a customer of ours, what happens? Long winded conversations, often off topic, a lot of energy, hard to keep them on track. I was just at the Orlando airport coming down here at Chipotle, and I’m like, “Oh, I’m so hungry.” I want to eat my food which I see right there, it’s already packaged up, and my flight’s starting to board, and this woman in front of me, God bless her, starts talking about this, that, and everything.
And I can see the employee’s eyes be like “SOS, help me, help I need to get out of this.” But for me, I was like, “Gosh, maybe there could have been more education around how to go from here to getting the customer where you need them to be to help that next customer.”
So with the socializer personality type, we need to train our team members for their out; how can you get them to go … The customer is a way over here on right field, and get them right where you need them to be without being rude? I understand the interactions that you have with your customers are, time is the game.
I have a business called Petty Cash, it’s a bar, it’s the most popular bar in Toronto right now; and it’s like a quick service restaurant, but flooded with people that are waiting two hours to come inside and people that want their vodka sodas; it’s hard to manage, it’s a different customer experience.
Whereas at our other locations, where you’re there for two hours, for me I tell my team “That’s easy, you have their attention for two hours.” Whereas you have their attention for 20 seconds, and that’s more your world; and I get that.
So when I have to go design our customer experience with our management team, we have to keep in mind this personality type who just wants to talk about their dog, and the Las Vegas Golden Knights, and how they just signed Mark Stone. Is anybody a Las Vegas Knight fan here? Yeah. Good on you guys for Mark Stone, that was a huge pick up for you guys.
Now I don’t know him personally, but if you’ve ever seen his movies, he does not want to talk about Las Vegas Golden Knights, he does not want to talk to you, he doesn’t care how your day is going, he doesn’t really care how his day is going; but often, they’re going to know more than you too.
Could you picture this person watching the barista being like, “You should be pouring it this way.” Because often they feel like they know more than you. Don’t talk to them about their day, they don’t care; I’m that person, okay. And I know it might be positioning myself to sound like a jerk, but this is the thing, my purpose is to save five to seven minutes with every interaction that I have with the supplier or a vendor.
Because throughout the day, that might save me 30 minutes each and every day, so that I can spend time with my dog Maggie, or go exercise, or do stuff I really want to do. It’s not that directors are rude, it’s just their definition of success is different, and we must teach our team members how to manage that versus managing the experience with the socializer customer personality type.
This is something that education around the common personality types, not just customer facing people in my organization go through this, my finance team does it as well too. Because they interact with our investors, with our payroll company, with the government; literally everyone in our payroll will go through onboarding with this in their curriculum as a module.
Now this is the personality type that is misunderstood. Have you ever asked somebody, “How’s your day going?” And they’re like “Good.” And then don’t respond with like, “And how’s your day going?” That’s the passive personality type. Often people will say “Oh, they’re boring or they’re not enthusiastic.” But really I think that they’re guarded. They’re guarded probably because your company or your industry has wronged them before, so they don’t trust you.”
But it’s not that they’re not willing to trust you again, they just have to be greeted by one of your frontline employees in a very hospitable manner so that they can lend that trust to your company again. And I find that the passive personality type could be some of your most loyal customers, if you’re able to rebuild that relationship with them.
The three common personality types, maybe you have something similar and fantastic, I’m not asking you to change your curriculum. But what I am asking you to do is be honest and say, “What is our knowledge retention like coming out of training if they’re onboarding, when it comes to managing different experiences for different customers?”
What is our team’s purpose? I said that we must understand this on the individual level. Each one of your team members that reports in to you has a defined purpose. I was recently in London, England speaking for CenturyLink, a telecom company there, and they actually didn’t allow me to present this. And my message here is that you should care about the purpose of each individual on your payroll, with or without the company.
The reason that I don’t track employee retention anymore, as a metric, is because I want people to leave. Food and Wine Magazine is the Bible of hospitality; they wrote about one of our venues our flagship location. And this venue, in particular, is four floors, 16,000 square feet, 30 to 40,000 guests will come every single month; it’s a really unique restaurant, it’s more of a venue, more of a mini hotel, if you will.
But at the time, she kept asking me about employee retention, employee retention, and I didn’t tell her any of the strategies, I talked to her about the philosophy. I said “The reason why people stay here is because we know that we are absolutely committed to enriching their lives as individuals, not as employees, or even team members, as individual human beings.”
I have somebody named Christina [inaudible 00:26:52] on my team, she started off as a server, she got promoted to a shift leader, now she’s an Assistant General Manager. Her purpose in her career is to be the Director of our Learning and Development Department for our entire hospitality company.
As her leader, as a benevolent and servant leader of my organization, it is my responsibility to get her there. It’s my responsibility to clear a path for her to allow her to do good work; but this is the rub, she has to meet me halfway. We have to tell our team members, as well too, look we’re not going to give you everything on a platter, you need to own your development as well too, you need to be reading blogs, listening to podcasts, meeting people on LinkedIn.
But I’m going to pave the path for you, and then you’re going to take the reins and go for it. But then I also have somebody named Riley, Riley’s one of our top three bartenders system wide, and he’s in school right now and he’s about to graduate in the next 45 days.
He has been studying because he wants to go into biotech, and he wants to be in business development. Guess what my job becomes at 45 days? To exit him from the company; it’s my responsibility to find him the next job. Because you want to develop people so that when they leave, they say “That’s a great place to work. I’m a better professional person because of my time at XYZ company.” And I’m not scared of my people leave, I want them to leave to pursue other things, and I’m very genuine about that. But if they’re willing to commit to the organization; follow me, let’s do this together.
And we’re able to achieve this free media; we’re written about in publications like this in Entrepreneur, in Inc. Magazine all of the time. We’re not, necessarily, doing anything revolutionary, we’re just building a people first culture, which allows us to create experiences both for our customers and employees that they’ve never seen before.
We’ve understood the purpose of our company, our customers, and our employees, now and only now can we start building processes; ones that are going to be highly adopted that really will impact the top and bottom line. I have 20 operational processes that happen behind the scenes in our organization; that’s actually grown now to about 28.
I’m going to talk to you about three of them, but if you want this slide deck, at the very end of the presentation I’ll throw my email address out, you can just pull out your phone and say, make sure … It’s not Michael Falcon, it’s Michel Falcon, and to say “Give me the slide deck.” You don’t have to be polite, just say “Give me the slide deck.” And I’ll send it to you, and you can review this later; but let’s talk about the first one.
Before going into this industry, remember I had zero hospitality experience two and a half years ago, zero, none. As a matter of fact, my father in the 10th grade, had a file for bankruptcy because this industry chewed him up and spat him out when it was done with him; there was a lot of hardship in my family when I was growing up.
So I’m not saying this so that you’re like “Oh he’s here to seek vengeance for his family.” Not at all, it was just like, “Hey, this industry’s really challenging, and I kind of want to roll up my sleeves and see if I can do some cool things, leveraging what I know about people.”
One thing I know is that employee retention is quite low in hospitality and in quick service. Raise your hand if retention is a problem for you and your company. Okay, only some people are being honest, but that’s all right.
So I knew that we can’t just hire people right off the bat, we need to make it hard to work for our company; that’s where retention will go up, we need to create a rigorous process for them. Because often sometimes you’re like “Hey do you like sports?” “Yeah.” “You’re hired.” That’s how some companies hire.
So this is the interview process, I’m not going to take you through every step, but I can send you that step by step guide if you email me at the end, I want to focus on two steps within our pyramid here; the culture interview is the second step.
I do not care if the individual before me came from the Four Seasons, is the best chef, or the best cocktail artist in the city of Toronto. If they do not pass our culture interview, they do not go to skill set; I don’t care, we exit them right away.
Reed Hastings, the CEO of Netflix says it best, “We will not tolerate brilliant jerks, because the cost of teamwork is too high.” So during the culture interview, we ask two questions per core value that we have. And I’ve built this pyramid to be scalable, because I need 75 percent of my team to be able to interview, because everyone must act like a recruiter for our company. So in theory, I can have a dishwasher host this interview process for any candidate, because we’re scaling quickly, we’re all hands on deck when it comes to recruiting.
So we’ll ask five interview questions, or two interview questions per core value; we have five core values. But there’s a couple other questions that I like to ask as well too. One question … I want you to think of the answer to this. Let’s say you are applying to be a hostess, I’m going to ask you a question, this question’s asked to hostesses, bartenders, dishwashers, everyone because everyone goes through this exact same process. The questions start changing when it comes to the skill set, but the culture interviews are the same for every position so here’s the question.
What is an indulgence that you cannot live without that costs less than $20? What is an indulgence you can’t live without that cost less than $20? Who’s going to answer for me? Keep it legal because a lot of your peers are here. Yes, sir, thank you, thank you. I really appreciate that.
What is the brand?
Oh, that’s really hard to pronounce
Okay, let’s just call it R. Keep it simple, what grape is it?
Oh, got it, cool, so I’m writing that down. What about here? $20 indulgence that you can’t live without?
Oo, just a medium roast with coconuts.
Okay, great. Somebody over here?
Fantastic. Okay, you probably already have Netflix, right?
Okay, What accompanies your Netflix, is it a nice blanket, is it popcorn, is it like what do you got going on?
One bottle of wine.
Okay, what type of wine, because it usually is two, and you’re just kind of limiting yourself to one? What brand and what grape?
Cabernet and pinot.
Fantastic, congratulations guys you were all hired. What do you think is waiting at your workstation on day one of onboarding? It’s your $20 gift and a handwritten card from our ownership team saying … And the language matters in this message, “Thank you for choosing us. We understand that you could get hired by any company on the street.” King Street is where all the restaurants and bars are in Toronto. “Thank you for choosing us. We can’t wait to build this business with you.”
Okay, language matters in your business to build your culture. I don’t allow employees to call me ‘Boss’, it creeps me out. I don’t say “I work for him,” I’m like “We work together.” Period.
So why do I do that $20 gesture? Okay, they’re warm and fuzzies, I heard some people say “Aww.” So I get it, the warm and fuzzies, but I’m asking you guys now to deliver an experience to our customers that they’ve never seen before; shame on me, if I’m not willing to do that for.
I’m now asking you to care about a stranger. Listen, when you ask your team members to deliver a great experience, you are asking them to care about a stranger. I must do that for you too, because at the very beginning, we’re strangers and hopefully we build a relationship so that’s not the case in time, but on day one, we’re strangers.
And lastly, here’s the real benefit from an operations perspective, you guys are just about to go into training, I need to influence your engagement on day one, because once you go into training, I need your knowledge retention to be high. And the best way to do that is to create an experience that you’ve never seen before to increase that engagement because knowledge retention will get higher because of that. Not only that, if you haven’t bought into this yet, the last thing is own the dinner table.
That’s a chapter in my book, Own The Dinner Table. And what I mean by that is you’re going to go back to your homes, and perhaps your spouse, your children’s going to say “Where did you get that idea?” And you’re going to tell that story, and now I got your family squad on my side, they’re never going to let you quit; I’ve got advocates in the home, I’ve infiltrated your home.
I know that sounds a little much. Let’s move forward to the offer, guys, we have to stop hiring people and being like “You’re hired, here’s your apron on Monday, you need to speak to LuAnn.” Celebration, one of our core values is celebration, we make this a celebratory time for a team. Remember, starting day one at a new company’s awkward, like kindergarten, first day awkward; so we need to celebrate and embrace people into our culture.
One thing that we do is, if you’re hired as a dishwasher or bartender or whatever, our general manager’s is going to call you, put you on speaker phone, and we’re going to grab two people that happen to be in the building; maybe it’s Joey the dishwasher and Samantha the server. And Joey be like “Hey, Steve, I haven’t met you yet, but can’t wait to meet you, I’m the dishwasher here. What’s up man, I’m going to be your culture buddy, can’t wait to meet you.” And then Samantha flies in there with her message too, so that candidate’s like “This is a different place to work.”
And as leaders, now we get to take a step back and allow great people to do great work. Look, I barely work anymore, I’m literally in my venues one day a week now; the rest of time, I’m traveling, speaking, sharing this message, because I’ve built a people first culture within our company.
Have you ever had employees in your career say “I don’t feel like I have a voice?” Everyone. So knowing this, in this industry, I created something I call it ‘The employee advisory board’. Because I knew I needed to mitigate that as an issue within our business.
So what I do is, once a month, or pardon me for a six month term, we will democratically elect one team member from every department in the organization; so one bartender, one dishwasher, one hostess, and so forth, one cook, dat dat dat dat dat.
And they’ll sit down with me for two to four hours a month, and we’ll talk about two things; the current state of the company culture, and the current state of our customer experience; and all I do is listen. And they give us operational feedback, both on the constructive and on the positive; and some of the outcomes from this is alignment. Every time we meet, I’ll hear a hostess say, “I didn’t know that servers go through that. That’s why you guys do that.”
And I’m just sitting there taking notes, allowing them to have conversations amongst each other and do what I love, peer cross learning. As leaders in our organization, we don’t have to do on the education; allow your great team to educate each other. It’s much more enjoyable for them, and much more enjoyable for you too, I promise you that.
Voice of the employee is one element within our voice of the employee program, we survey our employees as well too. Servant leadership, servant leadership is something I outlined in the book as well too. And, I’m sure you can imagine what that means, but it allows our team … The employee advisory board allows our team to give us feedback.
Then I go to my management team and say, “Guys, is there any validity to this?” And sometimes you’re going to say “You know what, absolutely, we have to fix that, they’re right.” And then there will be other times where they’ll say, “You know what, the reason we do A, B, C is because of 1, 2, 3; they just don’t know that.” And I said, “Well then whose fault is that?”
When there’s an absence of communication, opinions are formed. So when you are like “Why do they think that?” It’s because you didn’t communicate that to them.” People don’t fail, processes do. So if you’re like, “Why isn’t the team getting it, it’s probably the process; whether it’s the way you communicate, the way you hire, the way you onboard, the way you train. That’s where kind of the rubber meets the road is when we’re able to understand that people don’t fair, processes do.
And become an admired brand. The employee advisory board’s probably the program that I’m asked about the most by organizations of all sizes around the world, because they’re like “You know what, that makes sense, we survey our customers intimately, why wouldn’t we do that for employees?”
Again, I’ll give you a step by step guide on how to deploy this in your organization, whether it’s on a local or national level. This is probably my favorite initiative, because I light up when I hear of great experiences. A micro customer experience is a subtle, memorable, and affordable gesture that you do for your customer that resonates with them for years.
Now I want you to keep an open mind here, because I recognize not many of you guys have the luxury of having your customer’s attention for two hours like I do; but again, I do have venues as well too where somebody’s like “Give me my vodka soda right now.” Just like you might be like, “Give me my coffee right now.”
I want to introduce you to somebody named Alyssa. Alyssa’s purpose is to sing, she’s a musician with her boyfriend and they travel Canada; they sing together. But she works for me, with me pardon me, to secure her livelihood. And the agreement is this, “We’re going to help you get more gigs, so that you can live your purpose, but during your time with our company, we’re going to ask you to give yourself to our purpose and that’s to create seamless experiences.”
One day, on the weekend, a group of ladies comes to one of our venues to have brunch, and it’s the last time that these four ladies are going to get together, because one of them is just about to have a baby. Alyssa takes the education that we give her during our learning and development onboarding modules, because we don’t tell our employees to listen to our customers. Listening is a cheap skill set; listen and take action on what you have heard.
Acknowledging what your customer has said isn’t enough anymore; that’s table stakes, listen and take action what you’ve heard. Gather the customer intelligence, because your customers are having intimate conversations, whether it’s over a five second conversation or a five minute conversation with your employees, and we need to train them to be able to take that and build an experience that our customers have never seen before.
So Alyssa took the information that one of the ladies here is just about to have a child, she put the micro customer experience program into action. She goes straight to our hostess, our hostess goes across the street to a Shoppers Drug Mart which is the Walgreens equivalent in Canada. The hostess buys a box of diapers, a rattle, wrapping paper, and scotch tape; comes back in time, wraps the gift, handwritten card gives it back to Alyssa; Alyssa goes hands it to the guest.
Now I recognize that you can’t have your customers sprinting out of your stores to go do this. But what about something as simple as this, which will drive sales; compliment my shirt, tell me I’m having a good hair day. And how is that going impact sales, because if you’re like, “Would you like an extra shot of espresso?” I’ll be like “Yeah, because I feel good.”
Or, “Do you want guac?” “Yeah, I do because you just made me feel good, I’m still in this trance of I do feel good, I do look fly.” So, guys, those are the little things that we have to train our team members on, the micro experiences. We got to play in the macro, the bigger interactions I get that, both online and offline; but it’s the micro, and we must deliver that experience to them.
And guess what? The customer loyalty, positive reviews, all that stuff’s going to happen when this happens and you deploy this in the business, but one thing that we can’t neglect, my team loves doing this; their engagement is high, they love doing this.
I’m pretty much telling them, “Go compliment people and do gifting.” And guess what our budget is on this? I’ll just tell you so you don’t have to guess. This venue, in particular, will do just over $10 million a year in sales; the budget’s only $500 a month. Why, could I afford it to be $5,000 or more? I could, it would be like a wrestling match with my director of finance, but I could.
Because I don’t want people handing out bottles of Dom Pérignon; I want the smaller the budget, the more creative they have to get. And again, this doesn’t have to be gifting, it can be something as compliments, something to help your customers release endorphins when they’re at the airport; a high stress environment sometimes, we have to make them feel good.
Now, once we’ve done all this, is our reward; profit is a reward. And these are some of the things that you can go to your CFO or your director of finance and say “Hey, this is going to produce a return.” Are you on the finance team? You’re looking … No, okay, you’re looking at me like you are.
So look, this is what I say to my director of finance and he knows I have this like ammunition; when I go to my meeting and we’re budgeting for the year, I’m walking with guns a-blazing, and this is what I’m talking about. “Look, if we build a people first culture, which is going to cost us some resources and some money.” Not a whole lot, well, depends on how much you want to scale of course.
Customer experience influences customer loyalty. If you have customer loyalty, you can so choose to market as much or as little as you want. Therefore, profit’s going more to the bottom line, or you can reinvest that to more training and development for your team.
Repeat customers, more sales, we don’t advertise a lot at our venues because we just deliver a great experience and trust that they’ll get they’ll come back and it happens.
Brand admiration, we get free PR by doing this stuff. Some companies would have to pay 10s of thousands, hundreds of thousands, millions of dollars to get free PR in Inc., or Entrepreneur, or Business Insider, or whatever. Food and Wine magazine, that didn’t cost us anything, we just did something genuine and we got massive PR from it.
Decrease in refunds and discounts, more profit; make price secondary. Our venues, we’re not cheap, but we’re not scared to say that it does cost money to come and dine with us, but we support that with a great customer experience, to have people make price secondary.
On the employee side, less turnover, which means manageable training costs, more profit, employee loyalty, team alignment, higher productivity, less mistakes, higher sales, more profit.
But the thing is, is we have to be patient. I hope we’re trying to build businesses for the next decade, rather than just for the next 10 weeks. And I know, sometimes, it’s a tough conversation to have within our businesses, because we have to produce our quarterly results.
I get my P&L every single week. One of our venues has four P&Ls, because its that complex. You don’t think the first thing I’m looking at is straight to the bottom, and then I worked my way up? Are you sure you’re not a finance guy?
All right, might be my disguise. So guys, this is it, this is it. When I host workshops for companies and speak at their events, I say “We need to operate like our grandparents did when PPC and SEO weren’t anything.” The way that my grandfather learned how to grow his business in Lima, Peru, and he sold fish … My family has actually a funny history about … Like I was a garbage guy and he was a fishmonger; it’s not very sexy businesses.
But the only way he knew how to grow a business was by building genuine relationships with his employees and his customers. And I think with the launch of the internet, PPC, SEOs and things like that it kind of made us disingenuous. Because we were like “Hey, we can acquire more customers by using this internet thing.” And our resources went to that, and they were taken from people initiatives.
But now I think it’s coming back, largely because of social media we gave everybody a voice and we’re like “Oh crap, we have to care again.” That’s hard for some companies; but I think we’re all getting better, but we can’t stop. That’s the thing, why this might be exhausting for some people is human behavior never changes, expectations are always changing; therefore, we must change before they do.
We have a service level agreement within our business, three people first initiatives must be launched within our business every single quarter. It could be something like our net promoter score’s down, or response rates to net promoter score are down. Let’s get some better copy for our email subject line so that we can increase that rate.
Or it might be we are revamping our learning and development program; that’s a much bigger initiative, of course. But nevertheless, create a service level agreement within your business to ensure that you were always people first. And it’s not a campaign; this isn’t a campaign or a platitude, it must be embedded into the DNA of the company if you’re truly going to be authentic and be a people first company.
When it comes to customer experience, I follow three rules: we design it, we discover it, and we deploy it. When we surveyed 1,000 customers in Toronto to understand their hospitality behaviors, what we learned is they want this: they wanted value, they wanted a seamless experience, they wanted solutions, they wanted confidence.
They wanted to consumer confidence, and in my world it’s me and my wife don’t get to go out a lot, let’s say, you have this couple that goes out because they have a newborn child, perhaps; they barely get to go out anymore, maybe once a month. They want the conference know that if they select my venues, that they’re going to have a fantastic night and a great experience. Because it would really suck if they had a bad experience, because they have to wait till next month, perhaps, when they can get a babysitter.
They want to consumer confidence in your brand. What do you want your customers to think and feel when they see your employees in their uniforms, or when they see your logo? It’s upsetting to me when a company spends more money redesigning their logo, but the pain is within the business, within the employee.
Look, I’m not admiring your logo and being like, “I wonder what hue of green they use?” I don’t care, it could be like an emoji of poop and I’d be okay with that, sort of I think unless you share food and that’d be weird, but anyways. You get it.
When you ask your customers “What do you need?” It’s extraordinarily difficult, because customers don’t know what they need until it’s been presented to them; customers don’t know what they need until it’s been presented to them.
I’m going to share the story in a way that you’ve probably never heard of before. Before the iPod, which resurrected Apple as an organization, which led to the iPhone, what did we listen to for our music listening pleasures? Mp3 players.
To get from song one to 50, what did we have to do? 1, 2, 3, 4, 5, 6 or hold until your thumb turned a different color; that was literally a painful customer experience. So if Johnny Ive, Steve Jobs, and the Apple engineering and design team had come to us and said, “Ramon, what do you want from your music listening pleasures?” Maybe Ramon would have said, “Let the mp3 player hold 5,000 songs and have a bunch of different colors.”
That’s not invention, that’s an iteration of what was currently in the marketplace; that’s not innovation. That’s what Ramon wanted, what we needed was the iPod in one feature alone within the iPod to better the experience; the scroll wheel. That took us from song one to 50, literally like this, rather than like this; and I’m not going to do this until 50, but you get it. Nobody in this room would have said, “Steve Jobs, give me a scroll wheel.” Nobody would have, that’s what we needed. But remember, we didn’t know we needed it until it was presented to us, and that’s why customer experience invention is so difficult.
I’m going to share this story with you, but I’m going to share it in a way that you’ve never heard of perhaps. A lot of people say “Michel, Netflix put Blockbuster out of business because of their technology.” I would never argue that. But for me, Netflix understood the purpose of customers faster than Blockbuster did, and the purposes is, is time. That is where Netflix beat blockbuster was time.
This is what we once went through to go to Blockbuster:
“Hey, sweetheart, want to watch a movie?” “Sure, let’s jump in the minivan with our kids.” Dat dat dat dat dat.
15 minutes to the store.
Park our car which, we probably didn’t find a parking stall right away.
Go into the store, go “Oh, this movie, oh they’re out. Okay, this one.”
Okay, 15 minutes in the store, you’re dodging little snot eating kids, and I noticed because I was one of those kids; so I’m not undermining any kid because I was one of those kids.
Then you would go pay, and maybe you were talking to employee that didn’t really like their job.
And then you drive back home for 15 minutes, put the DVD in, you watch your movie.
Then you drive it back, in time, so you don’t get charged like your arm.
And then you drive back.
That’s like two hours to watch an hour and a half movie; that made no sense. What would you rather do? Do that or sit on your couch naked and just press one button? Netflix understood time was the definition of success for customers; the outcome was better technology.
Has anybody eaten at Sweet Green? Okay, so, for those not familiar, it started by a few Georgetown graduates; eight years ago they didn’t exist. Today they have 100 locations, highly funded and at Sweet Green, they sell a lot of warm bowls and salads. And if they had asked me, “Michel, what do you want?” I would have been like, “Don’t charge me extra for a guac.”
What they’re building, is what I need is a consumer. This year, when you use their app to purchase your pesto chicken salad that might have tomatoes in it, you’re going to be able to find out, in the app, because they’re leveraging blockchain technology, and be like those tomatoes were picked in Arkansas, the owner of that farm was X, Y, Z family, this was the temperature outside when the tomatoes were picked and harvested, this is how long they’ve been in the store for; that is what I need.
Because I know people are becoming more conscious of what they put in their body, but there is zero chance that I would have ever been able to tell them that. Imagine that like, “Yeah, why don’t you leverage blockchain technology to tell me where my tomatoes were harvested and at what temperature?” Nobody would have ever said that, at least not me.
You see the difficulty is customers are really good at … They tell you what they want. But then you’re going to go build it, and they’re gonna want something else. We need to focus on what they need, and that takes some critical thinking with our high performing team that live within the people first culture.
So let’s do this one more time. We recruit and onboard a high performing team, we understand the purpose of the company and create alignment behind that. We understand the purpose of customers, and we share that amongst the organization, everyone on our payroll must understand what our customer personality types are.
And then we understand the purpose of each individual within our business. I’m not asking you to remember the purpose of 10,000 employees, I’m asking you to remember the purpose of the people that report in to you, and those people must understand the purpose of the people report in to them, because we’ve done that, we experienced genuine engagement.
We go out with our project teams to build strategic initiatives and processes, the outcome of that is that we create experiences that our customers have never seen before. And as leaders, we get to take a step back and allow great people to do great work and build a great company.
The reward of all this is profit, not just dollars and cents, but profit by having an admired brand, profit by getting free media, and much, much more. I want you to go back to your place of business and remember this: every company on this planet is going to tell you that they deliver a great experience; after all, why would they say otherwise?
Some companies are going to be able to tell you that they devote as much resources into their employees as they do their customer experience. But the fact of the matter is, only a few companies actually do both, genuinely. If you are interested in an organization and being a servant and benevolent leader, I highly recommend implementing the people first culture within your organization.
Thank you very much.