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CUSTOMER-FOCUS STRATEGY 5: DISREGARD STRATEGIES 1 THROUGH 4

WHAT MAKES YOU GREAT today won’t necessarily keep you great tomorrow, unless you and your strategies evolve with your customers. That applies even to strategies 1 through 4 in this book. Continuing to follow them even when your customers’ needs change could be your undoing. Everything depends on your customers and how much attention you pay to their needs. As those needs change, your strategies may need to change, too. Some of the companies profiled here, like GE, IBM, or Coca-Cola, or in behemoth business bestsellers like Good to Great or In Search of Excellence are struggling or are on the verge of dying because they took their focus off their customers and stopped reinventing themselves.

Jeff Bezos said, “If your customer base is aging with you, then eventually you are going to become obsolete or irrelevant. You need to be constantly figuring out who are your new customers and what are you doing to stay forever young.”¹ Great companies focus on their current and future customers’ needs. Delighting current customers is not enough. You have to wow them in the future—and your new customers, too, whoever they may be. Unless you’re continuously evolving, you’ll die. That’s why so few companies (less than 1%) founded more than one hundred years ago still exist today. They didn’t evolve with their customers.

It’s hard to predict the future in anything, especially when it comes to customers who keep changing what they want. The only way to do it is to become skilled at creating strategies that support your customers’ needs—and then to keep updating those strategies. You can only do that if your whole organization is set up to identify and respond to customers’ needs as, and even before, they arise.

The strategies discussed so far in this book won’t work if you follow them only once. You need to keep revisiting and revising them—and have the courage to start over completely to keep delighting your customers. This is hard for most companies. They don’t change, even when they are losing large numbers of customers. Only a few companies have mastered the art of evolving with changing customer preferences and doing it consistently.

Consider Disney. Mickey Mouse, Donald Duck, and Disney feature-length cartoons like Cinderella were hugely popular in the 1940s, 1950s, and 1960s. But even by the late 1950s, kids were not as into these cartoon characters, so Disney developed movies like Old Yeller and The Parent Trap, and they too were popular (and remain popular with boomers). And as tastes continued to change, Disney changed right along with them, winning over Gen Xers and millennials by purchasing Pixar in 2006, Marvel Entertainment in 2009, and Lucasfilm, with its Star Wars and Indiana Jones franchises, in 2012. Marvel and Star Wars became the two highest-grossing movie franchise of all time. And Disney was also careful to keep Disneyland up to date, not only by adding new attractions but also by executing well. Seventy percent of those who visit Disney theme parks return.

Very few companies evolve as well as Disney did. As we’ve mentioned, only 1% of U.S. companies survive for one hundred years or more. And even the survivors are having a hard time maintaining momentum and appealing to the young. Disney is unique in its ability to keep reinventing itself and to keep delighting its customers.

To see if your company is like Disney in this regard, ask yourself these questions.

•   How does your company plan to delight future customers? What needs will you address and what strategies will you use?

•   What organizational capabilities do you have that will help you identify and respond to customers’ future needs?

If you can’t immediately start listing answers to both questions, your company will eventually lose customers and market share—no matter how successful it may be now. Whatever products or services you provide, the only way to stay successful is to keep delighting customers, and to do that you need to keep evolving strategies and to make everyone in the company aware of their importance.

To execute those strategies, empower your frontline team to do right by your customers, and pay attention to detail throughout your organization. That’s what Disney has always done. It understands future customer needs enough to keep delighting both old and new customers, empowering teams to help customers and paying attention to detail everywhere.

Unless you change your mind-set and do these three things, too, you won’t evolve—you’ll die.

UNDERSTANDING FUTURE CUSTOMER NEEDS AND DEVELOPING STRATEGIES FOR THEM

Customers today are quick to develop new needs and to let old ones go, and it’s tough to keep up, to see not only what they want but what they will want. What’s hot today is never so hot tomorrow. If they’re still buying the same general kinds of products and services you provide, you can respond quickly enough, as we showed in chapter 5. But what if your customers change and want something completely different—something you don’t even offer?

That’s what happened to dairy farmers who focused on organic milk. You would imagine that organic milk products would be popular with millennials, and they were, at first. Health-conscious customers drove the consumption of organic milk, and sales volume grew by 22.5% from 2010 to 2015.² This led producers to expand capacity and increase prices. But then customers decided that almond and coconut milk were healthier and cheaper. The market became glutted with organic dairy products, and the price per hundred pounds declined from $40 in 2016 to $27 in 2017. And consumption continued to fall. In the fifty-two weeks ending November 25, 2017, organic milk sales declined by 2.5% while sales of specialty milk and milk substitutes increased by 10.5% and 2.9%, respectively (figure 25).

Customers all over the world are making the same kinds of sudden shifts in what they want. Of the top one hundred Chinese brands in 2007, as reported by Fortune, only forty-six remained top brands in 2018.³ Some companies manage to keep up with customers’ changing tastes and thrive. They do that by identifying future trends and developing strategies to deliver on them.

However, most companies and leaders are not good at recognizing what their current customers want, let alone what customers’ future needs will be. Companies may use market research and in-house discussions to come up with new strategies, but few of those connect with actual customer needs. Many companies make the mistake of creating an online presence rather than trying to figure out what their customers actually need or what will wow their customers in the future.

FIGURE 25 U.S. milk sales growth for the fifty-two weeks ending November 25, 2017. Source: Neilsen, embedded figure, in Heather Haddon and Benjamin Parkin, “Dairies Are Awash in Organic Milk as Consumers Jump to Alternatives,” Wall Street Journal, January 3, 2018, https://goo.gl/nG97eV.

However, some companies get it right. Haier, a Chinese manufacturer of home appliances and consumer electronics, has been identifying their customers’ future needs for decades.

Zhang Ruimin, once a poor boy in a rural Chinese village, took over the company in 1984. Zhang challenged the status quo every few years and has completely reinvented the company several times since then.⁴ He began by improving the quality of the products, because he understood that customers were unhappy with shoddy goods and that Haier desperately needed to become a quality leader. But he also understood that, for the company to succeed in this, his employees had to feel as ashamed of the shoddy goods as he did. So he had them smash seventy-six defective refrigerators—in public, in the street outside the factory. That was the first reinvention.

The second focus was on innovation driven by customers. Zhang realized that many segment-specific needs were not being met by what the company was selling, such as generic washing machines and refrigerators. Zhang decided to identify specific segments’ unique unmet needs and to sell customized solutions to each.

The third reinvention focused on meeting customers’ changing needs quickly. Zhang believed that Haier’s lack of customer awareness was leading to delays and guesswork about new product manufacturing volumes. He created empowered teams that worked directly with customers and had the authority to manage resources.

When Zhang realized that customers were looking for products that could learn about and adapt to their environment, the company’s fourth reinvention began. Haier introduced products like heating and cooling systems for children’s rooms that change the temperature based on the child’s activity (such as whether the child is playing or sleeping).

Each reinvention has been hugely successful, and Zhang’s efforts completely transformed a small-town, bankrupt company into a global giant. Haier has had the largest market share of global household appliances in the world since 2011, and enthusiastic customers almost everywhere. From 2009 to 2017, Haier’s share of the global household appliances market increased from 5.1% to 14.2% (figure 26).

FIGURE 26 Haier’s share of the global household appliances market. Source: “Haier Tops Euromonitor’s Major Appliances Global Brand Rankings for Seventh Consecutive Year,” Haier, January 22, 2016, https://goo.gl/xxsEY2.

As the transformation of Haier shows, successful businesses keep reinventing themselves as their customers’ needs change. Identifying future customer needs is the most challenging part of this process. Since most companies don’t look beyond what customers actually tell them, identifying future customer needs is difficult for them.

Two methods for identifying customer needs have worked well for my clients: 360 triangulation and partner workshops. Which to use depends upon who is directly involved in delivering goods or services to customers. If all responsibility lies in-house, 360 triangulation is best. If a third party will be responsible for any good or service delivered directly to customers, partner workshops are best. Even when partners lack strategic knowledge, they still can provide unique and valuable insights. Whether you triangulate or hold workshops, participation from partners, suppliers, and customers is crucial.

360 Triangulation

Those from outside the company—customers, suppliers, and stakeholders—see things from a different point of view than those inside the company and thus are a big help in figuring out future directions. When a leading coffee retailer hired our team to help them decide which kind of plastic cup to use, we worked with everyone involved, including the company’s suppliers, to see what the customers really wanted and what would work.

As a first step, we needed a deeper understanding of the challenges faced by the retailer. We started by interviewing the leadership team, key partners, and suppliers. It became clear that the plastic cup suppliers couldn’t deliver what the coffee company wanted (the supplier lacked the capacity) and that the coffee company’s customers didn’t like the fact that the plastic cups couldn’t be recycled. It was obvious to us that the current plastic cups were never going to work. We had to find another solution.

Next, we spoke with researchers and experts in the field. Such people can provide excellent, and more objective, insights into where the market is heading. Our discussion showed that there were significant supply issues with the current cups and that alternative products could meet the retailer requirements just as well, if not better.

So we spoke with suppliers, who are an excellent source of information and insights. Because they spend time with competitors and other companies in the industry, suppliers can provide valuable insights into where the market is heading. In addition, because they are the ones who will have to support the changes, they’re an excellent sounding board for different proposed solutions. Discussions with them revealed that they had a different plastic cup in development that might meet the retailer’s needs. The new cup wasn’t recyclable either, but it would significantly reduce the landfill impact as it contained less plastic.

However, when we circled back with the client team, the marketing organization came out vehemently against the new cups. They said that since the new cups weren’t as clear as the old ones, customers would think they were dirty. They said their market research showed that customers wanted clear cups that looked like glass.

So we showed customers both cups and interviewed them. The customers saw no difference in the two cups’ clarity but loved the environmental story of the new ones. As a result, the retailer launched the new cups—quickly, with a big marketing push. They were a huge hit, and even ten years later, the retailer is still using the cups for its summer beverages.

An approach like the one we took with the coffee retailer usually works well (though not always, as we’ll see). Customers in general may or may not be able to guess at their future needs, but if they are asked the right questions, they usually can articulate their current needs. They may not be able to imagine what product or services will meet those needs, but they usually can say something simple about what they want—healthy foods, safe travel, or easy-to-use apps, for instance. They certainly can tell you how satisfied they are with the products or services currently available, and what they say about that gives a good perspective on what might succeed in the future.

Sometimes you need to look at changing customer preferences in other parts of the world, too. For example, when Japanese consumers started using their Sony phones to play music and watch videos, Nokia should have noticed. Their U.S. partners did—the wireless companies kept telling Nokia that people wanted music, videos, and cameras on their phones.

But Nokia—once number one in the world when it came to mobile phones—didn’t see that the popularity in Japan of phones with data predicted their popularity in the United States and Europe, even though the Japanese had been the first to adopt other new apps and devices that later became big elsewhere. Nokia completely missed the increasing popularity of the data applications that later drove smartphone innovation. If Nokia had triangulated with their partners, they would have noticed. But they didn’t; they kept focusing on what had been so successful for them in the past: voice calls and miniaturization. And so they lost out to Apple. They never recovered.

360 triangulation is a powerful tool for visualizing customers’ future needs, but it’s far from a one-time exercise. The market changes so often, and so quickly, that companies need to triangulate every year. Only then will they have accurate ideas about whether they should stay on course, tweak their approach, or change direction.

Partner Workshops

If companies are dependent on suppliers or other partners to deliver goods and services directly to customers, then those partners need to be involved when a company is contemplating any change. Internal managers often push back on the idea of including outsiders, because they think suppliers lack strategic perspective, but partner inclusion is crucial because the partners will have to execute any strategy devised by the company. It makes sense to get their input sooner rather than later. Besides, if partners are involved in identifying future customer needs, they’ll be far more likely to buy in to future strategies. Whether or not they agree with the need for change or its urgency, their inputs—especially their insights into the implications of change—are valuable.

For example, our firm was engaged by a large Canadian bank to restructure its IT outsourcing relationship. The outsourcing firm managed day-to-day customer interactions and played a crucial role in customer satisfaction. Customers routinely complained about not being able to access their accounts and about how long they had to wait on the phone or in branches. Both stemmed largely from the bank’s reluctance to revamp its IT infrastructure, due to the significant change and financial commitments that entailed. However, if the bank did not make a substantial change, it ran the risk of losing customers.

We decided to use a series of workshops to share with potential IT outsourcing firms the challenges facing the bank, to solicit proposals, and then to select the firm that would best meet future customer needs.

The purpose of the first workshop is for managers of the company to give potential partners a complete picture of the current situation. Giving this picture may well involve tours of facilities, visits to branches and call centers, and sharing data on customer complaints. At some point, there needs to be an open forum during which partners may ask questions about the company’s current state, the challenges it’s facing now, and where it’s expecting to go in the future. Internal attendees should ask questions about the potential partner’s capabilities and solicit their perspectives on fixing customer’s problems.

As a follow-up to this first workshop, partners should be encouraged to submit their own proposed solutions and guidance on costs. By end of this process, the company should have a high-level understanding of how they and their potential partners are envisioning their future direction, and some ideas about how they will get there. After the first workshop at the bank, some IT outsourcing firms proposed revamping the technology at the branches and call centers, while others suggested focusing more on apps and reducing reliance on branches.

At the second workshop, company and partner teams work together to assess the viability of each of the partner’s proposed solutions. From the company’s perspective, this workshop highlights different solutions that could potentially lead to an excellent solution for their customers. From the partner’s view, the workshop provides an opportunity to gather feedback about their customer and the current situation, which helps them refine their thinking.

When the bank and their IT partners had their second workshop, it became clear that the bank first needed to think about which service model would work for customers and then decide about the supporting IT infrastructure. The service model had changed. Branches and call centers were no longer customers’ preferred way to interact with the bank. Thus, the bank realized, it should be investing in smartphone apps and conveniently located ATMs, and its IT investment would have to be prioritized to support changing customer needs.

After the second workshop, the internal team gathers to critique various solutions proposed by the potential partners and to narrow the field to the ones they think are viable. Then the team shares these ideas with different stakeholders and the leadership team for feedback and refinement. At this stage, the team selects one or two partners for further discussion.

When the bank’s internal teams met, they agreed that their current IT partner probably wasn’t a good fit for the new direction. However, because the IT firm had legacy knowledge, they decided to invite their old IT partner to the third workshop, along with the potential new IT firm.

The purpose of the third workshop is to jointly refine the narrowed-down solutions based on feedback from stakeholders at both companies. At the workshop, nitty-gritty issues like the delivery plan, roles and responsibilities, and the governance model are refined. A partner is selected at this stage and is asked to provide final pricing for the refined solution.

After the third workshop, the bank decided to invest in apps and ATM infrastructure while reducing investment in branches. It chose to work with the new firm for this while using the current provider to maintain current branches and call centers. Eventually, as the bank reduced its branches and call centers, all the work would move to the new provider.

It often works out this way. After—or during—the workshops, a company and its current partners may realize that they can’t work together on future solutions. If that happens, they can then work out a transition plan that allows a new company to enter into the mix while the current partner retires or takes a smaller role. Doing this as part of a joint, open process can make the change less emotional and painful for everyone involved, as the reasoning behind the decision should be clear to everyone. At the bank, for example, everyone worked together to develop a transition plan for the current IT provider.

After either triangulation or joint partner workshops, companies should continue to keep an eye on changing customer needs and keep tweaking their plans. Some of our clients have found it useful to have artificial intelligence systems keep an eye on changing customer preferences, update management on a regular basis, and monitor how well the new strategy is working. But it’s important to remember that this follows the triangulation and partner workshops—it’s not and never should be a substitute for them. Companies have to keep doing 360 triangulation or partner workshops every year or two to ensure that they are on top of their future customer needs.

Create New Business Strategies to Support Future Needs

Once companies have defined future needs, the next step is to create business strategies to support them and to thrill your customers. Haier provides a good example of changing business strategies to execute reinventions.

First, to improve the quality of Haier’s products, Zhang created a joint venture with the Swiss company Lieber, to use and adapt their technology and quality practices at Haier. These practices included methods for continuous improvement and linked worker pay with quality performance. The focus on quality went beyond manufacturing; it was expanded to low inventory, short delivery times, and low working capital. The emphasis on quality enabled the company and its employees to develop the confidence to introduce more significant changes later.

For the second reinvention, ten years later, Zhang focused on meeting unmet customer needs through close collaboration among research and development, marketing, and sales teams. Working together, they created products like a vegetable washing machine; a compact, low-energy washing machine that could fit into a small apartment; and mini refrigerators for U.S. dorm rooms.

The third reinvention, in the 2000s, focused on a new program called “create zero distance with the customer.” Zhang reorganized the organization around independent operating units, creating empowered teams to work with, and organizations to support, customers. Haier’s eighty thousand or more workers are now organized into two thousand self-managed teams called zi zhu jing ying ti (ZZJYTs). The teams work directly with customers and manage their own profit and loss, hiring, and operating responsibilities. Employees are encouraged to come up with ideas, and the best are voted on by employees, suppliers, and customers. Those who come up with winning ideas became leaders of new ZZJYTs. Managers become service providers, giving team members both resources and guidance.

Now, for its fourth reinvention, Zhang is trying to use the internet to provide products that adapt to a customer’s home and environment. Haier launched an air conditioner, based on wind tunnel technology, that keeps air cool but not cold, which is what most Asians prefer. It is called Tianzun (Heaven).⁵ The air conditioner can be controlled via smartphone, and it doesn’t make any noise or change the moisture content of the air. This is just one of Haier’s many intelligent home devices. Zhang is determined to lead on that. Haier also makes faucets that set temperature based on facial recognition and wine coolers that alert owners when their vintage stock is running low.

Haier has mastered the art of coming up with new business strategies to keep wowing customers, in the present and in the future. It all starts with identifying future customer needs and then developing strategies to meet them—and to meet them in ways that thrill customers.

EMPOWERING TEAMS

A critical part of delighting customers, often overlooked, is the role that your employees play at all stages. We have said repeatedly that your employees are your most significant assets in understanding your customer needs and thrilling them. Your employees should play a significant part in assessing needs, coming up with strategies, implementing them, and bringing the new strategies to life as they interact with customers.

Most leaders pay lip service to the idea of empowering their teams, especially teams that serve customers directly. Yet most organizations neither trust their employees to do the right thing nor allow them to make mistakes. Few organizations give their employees decision-making authority.

But all employees interacting with customers should have the power to make decisions on the spot—the kinds of decisions that an owner of a small business could make. Employees should be not only allowed but also encouraged to address customer concerns, provide service, and show customers how to use products. Only employees who are empowered to make decisions—who are trusted and are allowed to make mistakes—can do these things and satisfy customers. Unless an organization’s culture supports frontline employees, employee empowerment is a pipe dream and customer engagement is nonexistent.

No one knows this better than Disney. From the day Disneyland opened, it has been staffed by empowered teams trained to communicate well with customers. Sixty-odd years later, the teams still work without much supervision and are encouraged to solve customer problems, without even waiting to be asked to do so. When customers even appear to have issues, the team member on the spot has the company’s encouragement to reach out and find creative solutions. Disney calls this being “assertively friendly.” Team members also are trained in trying to make the customer experience more fun. They all know how to answer questions about most aspects of the park, even if they work in a different part of it. They pass out stickers, FastPasses, birthday pins, and free bags and shirts. Every team member at Disney Parks is trained to be an effective communicator.

Six Senses, named by the Telegraph the World’s Best Hotel Group for 2015/2016, takes the Disney approach to a whole new level. Employees are trained in what the company calls “empathy.” The Guest Experience Makers resolve customer issues on their own. They are encouraged to actively observe the guests’ likes and dislikes and then to suggest to each guest ways to make staying at the resort more comfortable and enjoyable.

For example, I find snorkeling trying, due to my fear of depth. Our Guest Experience Maker learned about my difficulties and asked one of the resort’s marine biologists to make a private trip with us so that I could snorkel without group pressure. The restaurant manager made a personal effort to offer us Sri Lankan food—not part of the dinner menu—and did this without telling management. This focus on customers through empowering the frontline team to make decisions on the spot, without management intervention, is unique and is much appreciated by all the guests. People from different parts of the world, and of all ages, rated their experience highly and wanted to come back.

Are you empowering your employees to that extent? You can achieve employee empowerment by taking the following steps.

Involve the current team in selecting and training new members. Selecting team members your team can trust is the first step in empowering employees. Most companies’ recruitment process judges applicants on their past performance, but the past is not a good predictor of how well someone can do a new job or fit in at a new company. It would be better to let the current team select new members. This has been shown to produce a team that can trust and depend on its members. It also gives the whole team a stake in and accountability for the new team member’s performance, which is improved when the current team trains new members. At both Disney and Starbucks, the team on the spot trains new members, and these companies are consistently rated highly by their employees and their customers.

Develop a customer-focused, shared purpose. Teams who are all working toward a clearly defined common goal are happier, work better together, and thus can make customers happier. Walt Disney achieved this not only through training but also by calling those who work at Disneyland “cast members” and making it clear that they all are expected to put on the best show possible for customers. Starbucks not only calls its employees “partners” but also gives them stock options.

Create supportive leadership. Empowered teams feel that the managers have their backs and are open to new ideas from them. To empower teams, leaders have to let go of the steering wheel and allow people to make wrong decisions and then learn from them. At Haier, management’s mandate is to support the frontline team. The company is significantly reducing the middle layer of management to speed up decision-making and allow teams to learn from their mistakes.

Give team members authority. Teams feel empowered when they have the power to make decisions on their own. For this to happen in a way that works for the company, employees need to be taught how to make the right choices for the customers. At Six Senses, team members are allowed to fix a problem, whatever it costs. Of course, costs are relevant, but the company emphasizes that the team members’ first goal is to do right by the customers. Profits are not their responsibility.

Recognize success. Positive enforcement for good behavior both empowers teams and encourages them to focus on the company’s priorities. Six Senses gives its employees bonuses for positive feedback from customers on social media. In addition, during weekly meetings, colleagues celebrate one another’s achievements in making a customer’s stay special.

Studies show that empowered teams deliver results even when they have poor to nonexistent leadership. We were not impressed with the Six Senses top leadership, as they made only minimal effort to engage with customers. But we were amazed by their operational lead and staff, which reflected positively on the leaders and their philosophy.

To take a dramatic example from history: In the eighteenth century, German commanders were allowed to give their subordinates a mission but were not allowed to tell them how to accomplish it. This was a tradition in the German military. During the Battle of Zorndorf, in 1758, the German general von Seydlitz refused direct orders from King Frederick to attack the Russians. As he said to the king’s messenger, “Tell the king that, after the battle, my head is at his disposal, but that meanwhile I would make use of it.” At an appropriate time, von Seydlitz charged the Russians and won the battle—and was subsequently congratulated by the king.

The same principle of empowering those who are actually doing the work applies to business. An empowered team can compensate for bad leadership. But good leadership can’t achieve good results without an empowered team.

PAYING ATTENTION TO DETAIL

Customers love products or services that show attention to detail. Though Six Senses resorts aren’t over-the-top luxurious, employees at every level are paying attention to every detail. The music played in a guest’s bedroom, temperature, snacks, and lighting are all chosen to suit an individual guest’s tastes. Even the bikes have individualized nameplates! Of course, guests noticed, and these details even became a topic for conversation at meals.

Similarly, visitors to Japan are usually impressed by the attention to detail everywhere, from the way purchases are perfectly wrapped to the beautiful arrangement of hotel breakfast trays. The Japanese attention to detail is legendary and is defined by two words: omotenashi and kaizen. Omotenashi means “The customer is always right,” but many in Japan will translate it to “The customer is a god.” For example, when planes take off, airport workers bow. When a customer enters or leaves a taxi, the driver always opens and closes the door. Even inexpensive purchases are wrapped with care to look beautiful. The list goes on and on in Japan; everyone who interacts with customers tries to provide the best service possible.

Kaizen means “continuous improvement.” Every member of Japanese society is taught to pay attention to and continually improve upon the work they do. Once anyone figures out a better way, everyone else wholeheartedly adopts the new approach. It’s a way of life in Japan, and it involves everyone from the CEO to the lowliest employee. It’s no accident that Japan became an industrial powerhouse.

All great leaders and organizations pay attention to details. Walt Disney rode the rides in his park himself to ensure they provided the best experience for customers. And the tradition of paying attention to every detail at Disneyland continues, from the placement of trash cans to the food and service in the cafeteria; everything is continuously perfected for the best customer experience.

Steve Jobs, too, was famous for sweating the small stuff. He obsessed over everything, from the icons on the iPhone to the type of materials used in Apple retail stores to the lettering on the logo. He is rumored to have spent thirty minutes debating the shade of gray for the bathroom signs in Apple stores. That obsession with detail percolates down throughout the organization. People have debated and thought through every detail of Apple’s products—whether it’s the design of the Apple Pencil or the iOS flashlight icon. The box containing the first Macs even had a smiling face on the underside of the flap—something customers saw only for a second, when they first opened the box containing their new Mac. But those who noticed it were pleasantly surprised and smiled back.

Attention to detail starts at the top, and it can be encouraged and taught to everyone in the organization by following these steps.

Champion attention to detail. The attention to detail at Disney and Apple started with the founders’ values. That is the only way attention to detail can start—from the top—but it can’t end there. The entire organization has to strive for and insist on perfection, from the design of products or services through their delivery; in their day-to-day activities; and in every interaction with the public, whether online or on the phone or in person. Employees will come to feel proud of their performance and that of their company. The best way for leaders to achieve this throughout the organization is by example and positive reinforcement.

Develop good managers. Managers play an essential role in emphasizing attention to detail. They are the ones who ensure quality and discipline. They’re like the centurions in the Roman army. Good Roman generals knew the value of centurions and selected them carefully. Centurions were responsible for training the troops, and they were on the front lines during battle. They led by example. A good centurion could keep his men fighting—and often could eventually win, even when his troops were outnumbered. Roman generals recognized this fact. Centurions not only were paid well but also received bonuses at the end of campaigns, based on how well their troops had fought. Similarly, today’s leaders, like Roman generals choosing and rewarding centurions, should choose managers for their ability to develop talent and then reward them for the performance of those they manage.

Encourage employees to take pride in their work. Pride inspires people to take ownership of their work and achieve a level of perfection that everyone will recognize. Whether you are a janitor, a design engineer, or a financial analyst, pride in your work shows in the minutest of details. As a new consultant, I was asked to check every detail and every number that was presented to the client. Even a small error reflected poorly on the team in general, and on me. If errors happen often, people will not trust you and may not want you on their team. Moreover, pride is contagious. Once you get one team to achieve a higher standard, every other team will put in its best effort. Everyone in Japan takes pride in their work and in the smallest detail. If they do not, others notice.

Review and ask to redo. Someone should review the work of any new member so that he or she knows how to pay attention to detail and to do the assigned work well. This on-the-job training comes first; team empowerment comes later, once the employee is adequately trained to perform the job.

The person reviewing a trainee’s work must provide useful feedback and ask the trainee to redo each task until the work reaches a realistic level of perfection. Having someone supervise and provide immediate constructive feedback on how to improve can be a great motivator and learning experience during training. It teaches you the details of the work and makes you understand what perfection looks like.

At many consulting firms, every new consultant has to spend hours with their managers to review and redo their work. It doesn’t matter how late it is; no one goes home until the work has received the manager’s approval. The same principle was true when Roman centurions taught their soldiers how to fight. Centurions set the example of what was acceptable for all their soldiers to follow. They lived and died together on the battlefield.

Recognize work well done. Money is not the sole motivator. Whenever anyone in the organization does something well, acknowledge and reward their progress. Provide rewards publicly, with certification, celebrations, and the like. Another way to reward individuals who do well is to give them opportunities for growth by giving them important assignments. That’s a sure way of showing the whole organization the importance of attention to detail. Group recognition can do wonders in getting people to achieve organizational goals.

Culture determines any organization’s values and norms, and if attention to detail is not part of the culture, an organization will ultimately fail. This is as true of countries as it is of companies. For example, despite all the progress made by India, Indians are not known for their attention to detail. The idea that it’s not only okay but even sensible and polite to accept standards, conditions, and performance at work that people in other cultures would complain about is widespread in India. It has kept the peace in a largely poor society for centuries. But this attitude, which Indians call chalta hai (It’s okay), has been detrimental to manufacturing.

Because of chalta hai—and the resulting lack of attention to detail—India still struggles to become a manufacturing powerhouse like China. People constantly take shortcuts. Prime Minister Modi’s ambitious Make in India project, which asked multinationals to manufacture products in India for consumption within the country, has had only mixed success. The program was initially targeted at military hardware, but the Indian military kept finding that indigenously produced rifles offered subpar performance in field tests.⁶ So now it has to import even basic items—because the culture does not value attention to detail.

BUSINESS REINVENTION

Great companies in any culture evolve, keeping their businesses relevant to changing customer needs by adopting the mind-set of continuous reinvention. Disney and Haier are great examples, but it’s not surprising that there are few others, because visualizing future needs and developing strategies for them is difficult. You have to be willing to throw away strategies that aren’t working now (no matter how well they have worked in the past) and to embrace new strategies. We’ve provided several strategies, but you have to be willing to discard them all and find new ones when any, including ours, no longer meet your customers’ needs. Not surprisingly, most companies don’t do this. Instead, they stick to what worked in the past, dig in, and blame customers.

The ability to evolve revolves around three simple things: visualizing future customer needs and developing strategies to meet those needs, empowering teams to thrill customers, and paying attention to detail. These sound simple. They’re easy to say, but they are extremely difficult to do.

Most companies struggle to empower employees to thrill customers. Disney has been sharing its employee training secrets with all and sundry for decades. However, most other companies can’t seem to get their teams oriented toward customers the way the Disney cast members are. This is because you can’t get customer orientation just by telling your employees to do it, or even by training them to do it. You have to empower your teams to focus on customers, and at most companies that means a significant change in culture. It starts with employee selection and goes on to your ability to trust in employees to make the right decisions. This is not an easy task.

Many leaders say they want to delegate responsibility, but delegating responsibility means letting people fail sometimes, and most leaders can’t tolerate failure in other people. Investors trust leaders to make decisions; leaders should extend the same trust to their employees. But that’s a significant change in mind-set for most business cultures, driven as they are by top-down authority and decision-making.

Leaders have to change their mind-set in order to evolve with customers. They must become eager to change their strategies and embrace their employees’ pivotal role in wowing customers. When leaders do that, customers will sing their praises—and their companies will prosper—for generations to come. Even two generations after Walt’s death, Disney is the world’s eighth most powerful brand and was number one on the Forbes 2018 list of the world’s most highly regarded companies—because it has kept evolving.⁷