Countless opportunities exist for short-term gain in serviceoriented industries. But how do you build sustainable competitive advantage? In today’s fast-changing world, products and services evolve so quickly that any quality or cost advantage may well be fleeting. New and better products and services will likely appear shortly, and an organization that takes time to rest on its laurels will soon be left behind.
Building a sustainable competitive advantage requires creating an organization that constantly strives to provide the best service or product at the lowest cost. This is a fairly obvious maxim that most business leaders already recognize. Sadly, however, many businesses merely pay lip service to the most critical ingredient to such continuous improvement: dedicated employees who truly understand the mission of their company and embrace it as their own.
It clearly shows when employees love and believe in their company. Employees who think like owners and entrepreneurs will look for ways to improve the business and keep costs down. These employees will want their company to succeed, and they will create customers who love the company.
Customers who love a company will likely forgive an occasional mistake or lapse in customer service, or even an occasional price disadvantage, if they feel that the company and its employees have historically given them good value and treated them with genuine concern. This combination of dedicated employees and loyal customers forms the basis for a truly sustainable competitive advantage.
CULTIVATE COMMON SENSE
Most businesses live by rules. Rules and standards are, of course, essential in any organization. But theyare not enough. I was proud during my tenure as CEO of Southwest Airlines to see our company named the most admired airline, and one of the three most admired companies in America byFortune magazine. I was equally proud that our airline alone remained profitable after 9/11 and protected the jobs of all of our people, even as our largest competitors lost hundreds of millions of dollars and furloughed more than 100,000 people.
I never believed that these distinctions were earned because of our written rules, policies or procedures. Rather, they came from our secret ingredient: our dedicated employees and loyal customers. Personally, I thought the most powerful rule we had came from simply telling our people to use the sense God gave a goose, and, when in doubt, to simply do the right thing.
You cannot make people enjoy their jobs or do the right thing. You can pass all the rules and regulations you want, but it seems like there is always a way around a rule people don’t want to follow. You can pass a rule making people smile, but if they hate their jobs the smiles will be transparently phony, and their real attitudes will show through in their work.
A more compelling approach requires building a culture in which people want to do the right thing because they love their company, embrace its mission and enjoy their jobs. There is no six-point program for creating such a culture. There is no checklist or flow chart for it. It is not a matter of throwing a big party to honor your employees if people still hate their jobs when they go to work the next day.
It is simply a matter of working every day to create an environment in which people feel valued, where they understand the mission of their organization and know they are important to its achievement, and where they want their company to succeed.
APTITUDE AND ATTITUDE
It helps, of course, to start with good people. At Southwest Airlines, we put considerable effort into the hiring process. We used to say that we hired for attitude and trained for skill. Of course, this was a bit of an exaggeration. When you are hiring pilots or mechanics or lawyers or accountants, for example, you obviously want people with great job skills.
But we never had a shortage of applicants who had the requisite skills. The point was that we were looking for more than that.
We were looking for people who wanted to be part of a great customer service organization. We were looking for people who wanted to be part of something meaningful, who wanted to use their brains and personalities, and who were “other-oriented” rather than “me-oriented.”
But picking the right people is only the start. If you take great people and put them in a bad environment, they will be lousy employees. People are, to a great extent, products of their environments and cultures. If you put a good person into a culture filled with sloppy performance, authoritarian personalities and an absence of fundamental integrity, or where good customer service is not valued, then those are the qualities that this individual will internalize and accept as the expected standards of behavior.
But if you put a good person into an environment that surrounds him or her with high levels of performance, and where customer service and people are valued, then you will likely have a great employee.
Dedicated employees truly do create loyal customers and large profits. So if you’re looking to build a sustainable competitive advantage, remember to take a long look at the culture and work environment you’re creating for your people. The quality of each will directly reflect in the performance of your employees and the satisfaction of your customers.