CLARIDGES/STARBUCKS BUSINESS MODELS – WHAT MAKES THEM SUCCESSFUL?

 

Years ago, I started on a professional career in the insurance industry as a baby claims adjuster. I went to work for an American giant and was 28 years old. I got three weeks of paid training, a car, an expense account and was on my way.

When I got back to the office and got to know people, I realized that I was surrounded by a phalanx of older employees who had worked for The Farm for many years, the average being about 30 years of continual employment. The older timers were well-respected in the business and were a constant, steady stream of common sense and working advice. It was then, and probably still is, the common understanding that it took two years for an adjuster to know/understand their job and to be any good. I sat and listened to the oldsters absorbing information like a sponge.

All the training and hard work aside, I finally gave up on the organization and that job. Why? The testosterone-driven, male supervisors persisted in the management style of heaping rewards on the heads of a select few and treating everyone else like unimportant cogs in the corporate wheel. The unselect were minions who needed to keep their heads down working and be damn grateful for the job. These Dickensonian attitudes were reminiscent of the sweat shops of the 1800’s and my experience was only 40 years ago.

Ah! You say. It was all those men, that was what did it. Get rid of all those male managers and the problem will be solved! Sounds like a valid conclusion, right? Okay, then. Ten years ago I went to work for another mega insurance company. Here, instead of a phalanx of testosterone-driven men, we had a phalanx of testosterone-driven women who would stab you in the back as soon as look at you. Once again, the organization celebrated a few ‘golden’ employees (women) and subtly encouraged other lesser employees to mind their p’s and q’s and with heads down, be damn grateful they had jobs.

Now, have these businesses flourished or failed? Most insurance companies I have worked for have done well, in large part due to investment portfolios which continue to grow. How about their employees? Well…..

I recently watched the BBC documentary: Inside Claridge’s (2012). One of the oldest hotel’s in Britain, the Claridge continues to be successful to this day and has made its owners’ a ton of money. In comparison, Starbucks Coffee, a relative newcomer on the scene has also made its owner a ton of money. What do they have in common?

1) They greet their customers, each and everyone and treat them like welcome guests. “Hello, how are you and welcome to _____” is commonly heard in both places. Customers are not treated like necessary inconveniences, they are treated like what they actually are; the lifeblood that keeps the organization going.

2) They are highly responsive to customer’s needs. The last two times I was in my local Starbucks I asked the girl if it was possible to have a no-sugar hot chocolate. Both times, the employee made a special effort to create the lowest sugar possible drink for me and did so without complaining or making a face.

3) They treat their employees well and it shows. ‘Our team’ is modern lingo frequently heard in the corporate world. It mostly means that our team stands around while the boss lectures them on what is to be done. They then nod their heads silently and quickly escape back to their respective jobs. This follows the very poorly conceived idea that one or two people or a handpicked inner circle is what makes a business go ‘round. That notion could not be farther from the truth. The truth is that the entire ‘team’ does in fact make the business go ‘round. As is clear in the BBC program, everyone from the doorman, the elevator operator, housekeeping and on up is an important part of the team. Yes, there is one boss, certainly, but unless I miss my guess, all employees are treated with respect and dignity. You can’t pay employees to have truly happy faces, even for BBC, if it weren’t true.

Lastly, the proof is in the pudding. Sour-faced, disgruntled employees always have an effect on their customers and not a good one either.

People love Claridges and go back year after year. Likewise, people love Starbucks and go back over and over. The lesson to be learned: service, service, service to the customer and treating employees like people who are to be valued and respected regardless of their position in the organization.

cew

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