4. Superior customer service. Enterprises that excel at delighting their customers are masters of an institutional capability for customer empathy that goes well beyond the immediate sales transaction or customer interface. They are maniacally determined to make the customer experience truly unique. Not surprisingly, they are able to command a premium price as well as maintain a virtually unassailable market position. If you ask the senior executives at Four Seasons Hotels to describe their competitive advantage, many will simply say, “The company’s culture.” Four Seasons’ management mobilizes employees at all levels to view customers as kings, no matter how unmajestic they are acting or how pedestrian their requests. This is achieved through dozens if not hundreds of distinctive informal mechanisms that work from the time guests enter the hotel until after they check out — and the standard is the same at every Four Seasons hotel across the globe. Staffers remember guests’ names and preferences (without seeming mechanical) as well as anticipate their needs; state-of-the-art technology makes it possible to manage customer accounts with efficiency and aplomb, much of the management taking place via e-mail. Close personal attention to every detail is the Four Seasons mantra and, as at BCE, top-flight customer service is more informally supported than formally mandated.
5. Collaboration in a flattening world. Most enterprises today are facing some kind of new global reality — in their marketplace, in their operating model, or in their financial or human resources options. Today’s greater need for focused networks of insight and information means that informal mechanisms and interactions must be further developed, refined, and exploited. We can no longer rely on formal mandates plus instinct and chance to make the critical connections — many of those connections are emotionally rather than rationally determined. Therefore, business today cries out for integration of the formal and informal.
No organization wants to merely survive. Unfortunately, as we are climbing out of the recession, many organizations appear to be stuck in survival mode. The hunkering-down mind-set has become a norm, one that is very hard to break out of. More than ever, therefore, survivors need to cultivate a spirit that is not content to drag the workforce along in a quest for transformation in critical parts of the enterprise. Transformation can be achieved only if the informal organization is unearthed to energize and refocus cultural elements in positive ways: accelerating behavior change, promoting peer-to-peer interaction, and ensuring a positive emotional commitment to grow and win again. Just as it is important to have a vision that inspires ambitions beyond next year, it is critical to have an informal organization that supports, energizes, and challenges the formal. Both informal and formal dimensions are important influencers of behaviors that determine future performance and competitive position. We need the best of both worlds.
See “Leading Outside the Lines” by Jon Katzenbach and Zia Khan, s+b, Summer 2010.
- Jon Katzenbach is a senior partner with Booz & Company, where he leads the Katzenbach Center in New York. A cofounder of Katzenbach Partners LLC, he is the author or coauthor of eight books, including Why Pride Matters More Than Money: The Power of the World’s Greatest Motivational Force (Crown Business, 2003).
- Zia Khan is vice president of strategy and evaluation at the Rockefeller Foundation in New York, and a senior fellow at the Katzenbach Center.