E58 - Staff Loyalty & how to get it - Interview with Craig Cherry
Customer service expert Craig Cherry shares the fundamentals of employee loyalty and engagement:
- How playing the smile game got one business noticed in the media
- Fundamentals of what people need to enjoy and be committed in their work
- Critical skills leaders need to build buy-in and engagement
- What the daily setup meeting is and what to include
- How to create rewards and measures for staff
- How even the trickiest of remuneration schemes, like those in legal firms, can access insights into individual contributions for better rewards
Craig is the Managing Director and founder of The Loyalty Zone and has 25 years experience in improving business productivity. His award-winning 'Leaders as Coaches' training program has been run in 28 countries and translated into 11 languages. He has achieved significant success with his sales and service programs. He has worked with many major Global and Australian companies including Shell, McDonalds, Rolls Royce, MTU, Tattersalls, Coateshire and Australia Post as well as major franchise businesses in Australia like Chemmart, Kwik Kopy and Howard's Storage World.
Narrator: Welcome to the Zoë Routh Leadership Podcast, you source of strategies and insights to make you a better leader. Influence, Improve, Inspire.
Zoë Routh: Hi, this is Zoë. You wouldn't believe who we have on the podcast today. I'm so thrilled. It's Craig Cherry, and he is the Managing Director, and founder of The Loyalty Zone. Now, Craig's been around the tracks a bit. He's got 25 years experience in improving business productivity. His award-winning Leaders As Coaches Training Program has been run, in get this, 28 countries. That's like a third of the planet, I'm sure. And translated into 11 languages. That's amazing.
He has achieved significant success with his sales and service programs. He really is about helping businesses do better service and better business as a result and I know he's very passionate about getting results for his clients. Really keen to mine his expertise today.
He's worked with many major global and Australian companies including Shell, McDonalds, Rolls Royce, MTU Tattersalls, Coates Hire and Australia Post, as well as many major franchise businesses in Australia like K-Mart, Quick Copy, and Howard's Storage World.
So, oh my goodness, I am so thrilled to have you. Welcome, Craig!
Craig Cherry: Thank you very much, Zoë. Pleasure to be here.
Zoë Routh: So, 25 years experience roaming the planet improving business productivity, how did you get to that point? Tell us a little bit about your leadership and customer service journey.
Craig Cherry: Well for me it actually started when I was a teenager. My father was quite entrepreneurial and had service stations, and we had an amusement park. So when I was 10 years old I had to run the trampolines when people come. So, we got taught service early on. Back in the old days ... this was back when petrol was a dollar a gallon and you had no revolving numbers on the thing, not any electronic things on the pumps. I had to be at the door of the car before they turned their engine off. So, when they looked up you were ready to serve them. So, for me some of the customer service I've lived by started back in those days.
I was a teacher for 10 years and actually got-
Zoë Routh: Really?
Craig Cherry: Yeah. So, that was my first career was a teacher. I loved teaching. I'm still a teacher now really. As I moved from teaching I went to work for a place in New Zealand called the commission. But, the great thing about that was we had we had model shops of all of these businesses around the country. It was the largest.. it had 500 stores. So you got to work with all these different businesses whether it was a supermarket, a pharmacy a book shop, whatever it might be. I developed global training for them. The average increase in sales was 22% once people come and did the program.
So, we started to see this is making a difference. We did lots of research. I really invested into customer experience and loads of training. So, back in those days I was a national training manager. This is going back 20 years. I had a million dollar budget.
Zoë Routh: For training?
Craig Cherry: Yeah. Which is just about unheard of, but the return on investment was massive because we were getting 500 stores to improve. So that's where I cut my teeth. Out of that experience, one thing we would do on a Thursday night, we did a five day workshop, we did a thing called franchise management program. On the Thursday before the last day we'd take them out to dinner. Many of them would approach you on the side and go, "Look, could you do this with the rest of my business?" Because it was a tiny little part of your income. They make seven cents on the dollar. But they had hundreds of staff. So I ended up quitting my job and starting my own company. That's where it really started for me. It was called the productivity increase group in those days. We were all about improving the performance of the business through its people and driving great customer experience. That ended up being ... yeah sure.
Zoë Routh: So, customer experience seems to be a bit of a buzz word these days but judging by your experience it's been the fundamentals of business since forever. What's different? If there is nothing different about customer experience and the focus on people these days?
Craig Cherry: The big change is now that people are cutting back staffing. It's all about how much the cost is and the wage is. We don't have as many people serving people as we used to. It's all getting a bit leaner and people are expected to do more and more. I know we're going to talk about staff laws in this conversation. There's a relationship between those things. I think it's getting tougher. The expectations are higher. So, I do a lot of work now with restaurants and clubs. People watch all these programs and they have very high expectations of what food would look like. So, I think with the media and people's increase in understanding their expectations are going up all the time. The great companies can keep delivering that. The ones who can't don't quite realize the impact until some point it's too late. So I'm passionate that you improve your customer experience. You will improve your revenue.
Zoë Routh: Yeah. It seems like such a basic thing but it's amazing how many people get it right. Any one of us could have huge anecdotes about poor customer service. It's just gobsmacking that you do experience this. It's like, "Are you serious?" Often these young kids who have got no idea what they're doing. I'm sure you run into that a lot too, do you? Young inexperienced staff representing the business and that's sort of the starting point of how things go pear shaped in a business, or is there other factors?
Craig Cherry: I think there's lots of things. I think that's one aspect. But, that's all leadership driven. That's a leadership decision. I fundamentally believe that great customer experience is leadership driven. So, you can't really blame those young people. Back in even to my days one of the big things about motto in New Zealand was 50% of the sales were done on a Saturday and guess who they had working on Saturdays?
Zoë Routh: The kids.
Craig Cherry: Yeah, the youngest people. So we had to really drive education through the leaders going, "You're putting 50% of your revenue in the hands of an 18-year old or 17-year old."
"But, I want to have my weekends off."
"Yeah, well you shouldn't be in retail." You want to have your best people. So again it's the decision. It's not the financial one. They're not making the right decisions. They're not training people enough to do the job. Because there's many, many ... I was one of those people and I really worked hard. I had to learn attitude I wanted to be here. So my experience of training thousands and thousands of people. If most people want to do good job, are they given the resources to do it? Are they given the training? Are they given any feedback? Or do we just expect them to turn up on the smile on their face every day no matter what's happening in the world, and not really get into something deep.
So, I think young people is a point. Not doing enough as leaders to drive their behaviour and put standards in place. There are so many things we can do. And giving positive feedback. So generation Y they get a hammering "Well the young people ..." but look at what the leaders are doing. And I go, "Yeah well you've done nothing to make it any different."
Zoë Routh: I think you're right. The ability for leaders to give effective feedback is sadly lacking. Most people shy away from doing it. Either the constructive or the positive stuff. It does have a huge impact on morale. So one of the things I wanted to drill down on with you is this whole idea of staff loyalty. Customer loyalty is what every business wants so that your customers stick around and continue to buy from you. Staff loyalty. How does that connect with employee loyalty? So tell me your thoughts on staff loyalty.
Craig Cherry: There's a correlated link between the two. So, I'm going to dive in here but you had mentioned three intersecting circles like a vin diagram. The customer, the leaders, and the team. If the team's not engaged the customer's not going to be engaged. If the leader's unengaged the team won't be engaged. So everyone's got to inspire people for everyone to do the best job they can. One of the things I do is I do a lot of research. One of the things that's changed for me is compared to my old days where I sort of did my own training and things like that. I'm now going and talking to customers too. So I now go and research the team and find out what they want.
If I was to find and research a team member and ask them, "How likely is it that you'd recommend this business as a place to work to a friend or a colleague?" Because if they're recommending their friends come and work for you they normally really like it. Because it's your reputation. So if you get high scores on that 10 you'd definitely recommend, zero you definitely don't. If they're giving you nine and 10 scores you've got pretty high customer engagement. So to me research is one of the ways to help find out where people are at. But, you have to be very careful. In fact comparing research of customers to team. Confidentiality is really important if you're going to do team research because they're quite wary about saying what they really feel. If they feel like they're going to be known. So in the small business it's quite difficult. Because there's only five staff and who said that?
So if the leaders are doing it for the wrong reasons, going to use it for evil not for good, then that's going to be difficult. Then what you can identify from that is what are the things that drive them. So what you said before about giving feedback. I remember working in a supermarket and we're working with the deli part. I think we really created some fantastic moments. We had letters in the newspaper. I don't know what's happening in the supermarket but all the staff are smiling. So we had a small game. We used to measure how many people smiled. I'll come back to the deli in a minute. You know the check out. So we measured how many people smiled. When we started this program in this supermarket 22% of customers smiled at any point while standing getting their groceries through the scanners and served.
Once we started playing a game with the staff, "Let's see if we can improve it." We set an award in the aisles of the supermarket. We were averaging 80. The only difference was is they got interested in the reaction of their customer to them. So if they don't smile they would go, "How's your day?" You know? They go, "Oh it's good you know." Smile.
If you smiled at your daughter standing next to you it counted as a smile. It doesn't even have to be at him. They just had to smile. But, the difference was massive. It was simply the focus is that ... imagine that job you're doing it all day you just get into this transactional way of being. How do you get people out of that? So to come back to the story about giving feedback.
The woman who was the head of the deli. She didn't of course know how to give specific style of feedback. But, she kept telling us, "But I always give my staff feedback. I always tell them they're doing a good job." When we surveyed the staff about this they said, "She says every day guys you've done a great job. She says the same thing every day. It doesn't matter what we do." So they knew that it wasn't authentic. She would say the same lines every day and give them positive feedback at the end. But they knew they could do a crap job and she'll say it. So it didn't have any meaning. It wasn't about them as individuals. So she saw herself as this God's gift to giving feedback and in fact they saw through her straight away. So I think it's really important not to just give feedback but giving feedback about people's personal behaviour. Not just saying you're doing a good job. But what is it you did well. I know you know things like this.
You looked at the customer. You used their name. I loved your tone of voice. You sound like you're really enjoying your job. That's what keeps people fired up and going. There's lots of things to this. There's many key areas that drive staff loyalty. Fundamentally feeling honoured and respected. They don't mind getting feedback about how to improve. They don't mind getting told of not doing a good job. In fact, they respect it if they get held to account like they respect good teachers and good parents. In the research I've done they don't like it when they can get away with stuff. They're actually quite critical. It's interesting. You think it'd be the opposite. They'd be critical if they can get away with stuff.
Zoë Routh: Well because people enjoy boundaries because it sets a standard to which they can work towards or within. Otherwise, it's like no one cares. That sort of message there.
So the smile game. That lifted ... the desire for that was to lift employee experience as well as customer experience?
Craig Cherry: It was probably the intention of customer experience but it actually achieved both because what happened is I remember getting an e-mail from the owner going, "What are you doing to me Craig?" I go "What?" He goes, "I'm having so many rewards. We're averaging 80." We thought only a few people would hit it. So it was a lot. He was sort of joking. But they got so much more acknowledgement. The leaders were watching to see how that was going. They were looking at the customer's reactions. So the flow out effect was really amazing. You we framed they've got the trolley boards that have the employees and their time. They would take the trolleys. They were the first impression. Some of these people were not very well educated and some of them had some learning disabilities. We just empowered them about you're the number one person. We gave them umbrellas if it was raining to help people. Again, we had people taking photos of this person carrying their things, putting it in their car, going I've never had a trolley boy actually help me pack my car and hold that umbrella over my head. So they felt like they were now important. Not the lowest of the low because if you think about a customer's experience often the first person you see and the last person you see is someone in the car port.
It seems like small things but you get the whole lot right. That's the secret I think to customer experience. It's what happens in every part of it. Not just one part. It's not rocket science. That's what people always say when they do our programs. This is pretty basic. I go, "Yeah it is isn't it?" Simple things work.
Zoë Routh: So let's talk about that. Simple things work with staff loyalty. I guess first of all though I'm curious, how do you actually measure staff loyalty? Is it the number of years people stay with you? What criteria have you got for that?
Craig Cherry: Mine is sort of what I was saying before because I'm a big believer in research that I would measure staff about two or three times a year. So we would measure where they were at and then we would understand if they are really loyal to the business we understand what the main reasons are, why they are. And if they're not we identify the most important things we can do to improve. So that would be our main test and measure of that. Yes of course it comes into things ... add-on effects after that like you're going to have people a lot longer, they're going to do a better job for you, you're going to have less sick days. All of those measures come out of that as a direct relationship to the higher your score in the research the less you'll have of all of those other areas. That's why my big thing is measure, act on it, and measure again to make sure. But if you look at a lot of team research they'll be lucky to get that once every two years.
Zoë Routh: That's true, yeah.
Craig Cherry: You actually have to have a frequency of interaction.
Zoë Routh: So around this you asked them, one of the key ones, is how likely are you to recommend this place to work to your friends or colleagues? Is that the only question you ask? What other kinds of questions do you ask?
Craig Cherry: We'd ask good questions. We would ask them how they would rate their direct supervisor. We'd ask them feedback about how they feel the business is being run because often team have great feedback about things they can see, but there's never an avenue. There's a lot of other questions. But that's the primary question. But underneath those they will be asking those questions. If there was some particular thing they were doing like we just done one two weeks ago. I got a thing called above the line, below the line, which is above the line is being responsible, being accountable and taking ownership. Below the line is blame, making excuses, justifying, things like that. So we actually did a thing on how do you feel the company is living to this? Is it just talk or are you actually really seeing that experience?
The questions would sometimes be designed on things that their company is doing and other things. But we would generally always give them direct leadership because that tells us a lot. Take this company we just done. We had some concerns, but we couldn't see. We had done the customer research but we hadn't done the team and we can't see ... we have some gaps in there. Now we've done the team and we seem to identified the leaders who are not coaching their team. They say they are but they're not. So we would ask, "How often are you getting feedback? Are you having daily sit-out meetings?" That's one of the key things for us.
If you want motivated people you got to sit them out every day. You can't just expect someone to be excited the same as the day before. We wouldn't expect a sports team who plays and then has to play another game. You wouldn't expect them to be just as good as last time with no more practice, no more setup no more preparation. But we seem to expect our people to do that. So one of our key things I shaving a daily setup. Getting them fired up ready to go. Let's have goals today. What are your key objectives today in your job? What are you going to do to deliver 10 out of 10 today? We get all those words out of their mouth. So of course if their leaders not running those session it's going to be lost. It gives us a view too of what is actually happening.
Zoë Routh: So that's a daily setup meeting. I'm just thinking about all the businesses I work with. I'm pretty sure that is not a daily experience for most leaders and their teams. Do you think it's more relevant for direct customer service engagement? Or do you think, for example, one industry association I work with they don't necessarily ... all the people who work there don't necessarily have end point connection with the membership. They have other functions within the organisation. Is it still important in your perspective for team loyalty and team performance to have those daily check ins? Those daily set up meetings?
Craig Cherry: Yeah. It doesn't have to be long. It does depend on the business. Some might do a weekly just because not everyone's even there. So one of the companies I work with in South Africa, their exec team they do two a week. They're Monday and Wednesday. Doesn't matter where they are in the world they have to link in to this telephone call and let's do a setup. So they may not do it every day because it's just logistically too challenging.
With a frontline service team it would be daily. I think the other point even when you say people are not in direct customer roles I would argue that everyone's in customer service. Everyone impacts it in some form. In a finance team they would have ... but it's all about ... again, you don't have to have it long. You don't want it to be a big half an hour. It's just like, "Where are we at? What are we going to do?" It could be one to one, it could be one to five. It's just a quick check in and that's also being interested. People don't care what you know until they know that you care. So as a leader are you checking in and seeing how are they walking in today? Staff will tell us. Man we know what days to talk to the boss and what days don't. You can see when they walk in. So everyone's assessing and everyone's making judgements about people. So are we doing anything to help them? It doesn't have to be a ra-ra thing.
We've developed a thing called fired up ready to go which is a thing from Obama's campaign when he stood for President. It's more about just being interested and checking in and clearing someone if they're not good. You know?
Zoë Routh: There's nothing like a bit of ra-ra. I'm not averse to that. Being Canadian enthusiastic.
Craig Cherry: I was in the states last week and we did this. I was actually being warned because I show this video about Obama's campaign. It's a great story about fired up ready to go. I was in Trump country I was in the middle of Arizona. Gun-toting they told me, "Oh don't show that video." Well I did show it and they loved it because it wasn't really about him. It was about a little lady he met. He drove about three or four hours to go to this meeting and only 20 people turned out. It was raining, blowing a gail. They didn't look like they wanted to be there, he wanted to be there. They didn't look like they wanted to be there. And this little tiny lady said, "I knew I had to do something." She started doing this "Fired up" and people said, "Fired up" "Ready to go." "Ready to go."
And he said, because they tell the story together in a way, he goes, "I thought she was stealing my thunder. I looked at my team what am I going to do here?" They just shook their shoulders, "I don't know what to do." But he said, "After two or three minutes I started to feel fired up and I felt ready to go." That took off. It's a great story for someone who hasn't seen it. Google it. But after that this whole thing became his campaign slogan. People had posters, "Fired up. Ready to go."
Every day his team would go to him, "You fired up boss?"
Yeah I'm fired up."
"You ready to go?"
"Yeah I'm ready to go." Just created this energy. It's funny we've done it in every company. We do it in China. They do fired up ready to go every morning. So the service team ... because this is a company that makes and services big engines. They have their team standing around. They have their setup meeting. They have a big one of 20 or 30 people. Others have two or three. But I just think it's important. We just don't think about things. We just expect ... it's like expecting a teenager to tell you how school was. And how their day is.
Zoë Routh: Yeah you don't get much out of that. Okay so ... I love that. I love that story. It's great. Fired up ready to go. I love it. So we've got giving constructive, useful, behaviour related feedback as one of the key parts of building engagement with staff. Which flows on to customer experience and loyalty. We've got the daily setup meeting. What else would you recommend for building loyalty with your staff?
Craig Cherry: Everyone needs to know what's expected of them. So standards. There's a great Gimming principle if you've ever heard of Gimming. He was responsible for helping rebuild Japan after the second world war. And Toyota. Tiki Rim came around for him. He talked about 94% of problems in a business are system related and 6% are people. So when you think about people are a direct correlation to your system. So if people don't know what's expected of them and haven't been trained in the standards, in the feedback as we mentioned before. So that's one of the biggest things I've found that most companies do not have specific measurable standards. They have intentions. "Guys make sure you're friendly." That's not a standard. How do we answer the phone? You don't want them wrote. You don't want wrote standards. I've done a lot of research on this and customers have said when they talked about greeting for example, one of the standards we put for greeting is you greet them and hold eye contact throughout the statement.
But it's not this is the greeting you must say. Because customers go I don't want the same greeting every day. It reminded me of being and the customer's going down the aisle and doing the drink service. I asked for a bottle of water. He held the bottle ... if you can imagine how a person would hold a wine bottle serving a wine bottle he held it under his arm and goes, "Here's your 2016 spring water" I thought, "Oh that's quite funny." Right? The only thing was ... I was sort of in row four. As I heard him go down the plane he said the same line to every seat. It just changed the feeling to be like it was a line. It was a strategy more than real. People need to be themselves. They need to have the ability to be themselves. I've done a lot of work with Shell many years ago. We famously improved their revenue by $100 million over five years.
One of the first things we did ... we looked at the service station business. We looked at the service standards and they had standards like, "You must say four words in your greeting."
Zoë Routh: What say four words?
Craig Cherry: Yeah. That was their only standard. They mystery shopped it and the staff said less than four words they got marked down. So you can imagine they thought this was ridiculous. You go, "Hello!" Or "How are you?" You get crossed off. Now the intention was ... I found out the person how wrote that, their intention was to get them to do more than just say hello. But, if they didn't do their research. Again customers said I don't care how many words you use. I just want you to mean it. Look at me when you say it. I think you mean it then. Right?
So of course we changed it then. The staff they loved it. So they've got to feel it can make sense to them. Once you get that so they know what's expected of them. They get set up. People actually care about how they are. They get rewarded if they perform. Again we made them that $100 million. Shell was cutting back their ... They had terrible trouble with finances back in that time. Petrol was being sold for less than they were buying it for. It was a really tough time. When I started they were having four or five staff in the end they were two staff and they would have a two hour cross over where they had two people on. We still managed to do it. Even under those conditions. If you got that people saw that. Any time they'd serve you as fast as possible. We also had a little sales approach that we were doing. Still worked well. I wouldn't say it's perfect well but the results were clear. So I think standards are one of the fundamental things. That is how they're done. Are they done through customer research?
Zoë Routh: Buttock research?
Craig Cherry: Yeah. So that's when you pull it out of your backside like a four word greeting. There was buttock research. Someone made it up. Go and talk to people. You have to ask your customers, "How would you want us to do this?" They'll tell you. It's such a simple way of doing things. People tell you. Let them tell you. So you see they're working it out. That's the problem. Everyone hated it. They were demotivated because they got negative feedback on their mystery shop because they said, "Good morning."
Zoë Routh: That's crazy. So you mentioned also about rewarding for performance. So that's an interesting aspect of staff loyalty and it's convoluted. I'm wondering what your thoughts are around, A: how you actually track and measure performance and Two, how you set up those rewards and what kinds of things would you include?
Craig Cherry: Yeah. It's a good question. I think I've done many things where there's been no real tangible reward apart from feedback. I think one of the biggest things is people need to know that they're succeeding. They need to know that they're improving. So if they can't see any measurable improvement it's very hard to keep them motivated. No matter who you are or what you do. If you're doing a weight loss program and your scales rent dropping the way you ... or your belt can't go in any further, then it's going to be pretty hard to keep the motivation up, right? So that's where you need to measure. Having some measure in terms of score or things like that. One of the things I do in one of my leader programs is we actually play. We have a sit. I've got to go to the maker of this sit because I think it's the most troubled sit in the world. So we play and we do that three or four rounds. Lots of energy, high fives when people get a strike. Then we put a curtain up. So when people are bowling they can no longer see the pins and we remove the scoreboard. So you can imagine what happens to the energy.
Zoë Routh: You wouldn't care. It's like, "Well I don't know." You throw the ball and it's like whatever.
Craig Cherry: Yeah it's like what's the point. In fact, I think I played this in I don't know how many countries. 26 or something. Someone always says, it doesn't matter what the language is they go, "I don't get the point. It's stupid. What are we doing this for?" So I said, "Well that's interesting isn't it that you are playing a game and what do you want to know right now? You want to know how you're going." So I would even negotiate with them and say, "Lets say I put the score in the computer and it's in the office. You can go down the hall in the office, open up the computer and then see your score. Like a lot of companies do." It's going to take too long I want to know now. Oh okay. So of course ... hopefully as you're listening to this you're thinking, "Well what happens in business?"
Generally we're finding out our score by the end of the month. If you're using sales and financials as your main measures like driving your car using your rear view mirror. They need to develop scores so that people can see how they're going in the moment. That's what keeps people motivated. Then if they are a really good performer we do need to reward them. Because if you just reward on teams I'm not a great believer on doing team rewards on their own. Like, "Hey we've all done this achievement. Let's give everyone a reward." Because I've never seen a team where people aren't hiding out. It's a few people who are creating most of the result. So if we're not giving those people acknowledgment we're going to lose our really good people and they're going to go somewhere else because they go, "I'm actually the one who's doing most of this. So I think you need to ..." it's nice to reward teams for team things. But, I think you need to have individual acknowledgement. I've always been good at sales. So I would find that hard to keep my motivation if I did 80% of the result and everyone got the share and I knew some people didn't do anything.
That's hard. We're just humans. These things make a difference.
Zoë Routh: Let me ask you this complex one. I work with several different legal firms. With partnerships, it's quite complex in terms of divvying up the spoils if you like, or the profit. So, one of the only measures they have is on billables. That fails to take into account the different roles that people have in the organisation apart from actually doing the work as directors. So they might have delegations in charge of marketing. You have delegations in charge of staff and morale. You have other people in charge of IT. Overseeing different aspects of the business. So some of those workloads are higher than others, but they're not necessarily the immediate revenue generating activities. So how do you tease out and set performance standards when there's multiple variables at play?
Craig Cherry: It's a good example. This is where doing research helps because you can use the customer score. The team score. If there's a leader like how's your team working? Rating you. So it's not just the individual dollar because it's not everyone people impact it. They might not be the influencer of it. I remember doing real estate research and the people ... the scary thing for a lot of companies who did it, the person they thought was their number one best person the customers hated them. They rated them zero they said we would never come and work for that person again. But that might be a sales person. Because if you think about the mentality of a sales person in real estate they just want to get the deal. They just want to get you signed up for the house. Their next part is managing the relationship. Often they would tell you whatever you wanted to hear and then sign you up and then they'd come and do your auction. I'm not saying they didn't do a bad job at the auction, but people said "I had to chase that woman all the time. I always had to find out ... they never told me who came to the open home. All these things they promised they didn't do. Never use them again." So now we go, "Well I can't sack these people."
I go yeah but maybe I can understand you saying that, but they're killing your loyalty. What we actually came up with was why don't we partner them with someone who's really good at relations and so on? And put them together. So then you had this wonderful team. So that's just an example for me. Once you find out the customer side you get a whole different view. Same in the legal field. Someone might be doing great billable hours but the people hate them. The team doesn't enjoy them. The customers find them very arrogant or whatever. So if you've got another way of measuring.
Also, I find often in teams they are really good at coming up with ways of measuring themselves. Give them accountability for, "Okay we want a way to measure those teams effectiveness. What do you guys think? How do you think we can do this?" So they're often good at coming up with their own little score card of whether it's in finance decreasing the amount of money owed, what are the things you can actually input? They don't drive revenue. They measure things.
In south Africa one of the problems was all the teams had to do their ... you know, people would go out on the road and they've got to put in the ... to get paid big money for spending.
Zoë Routh: Reimbursements.
Craig Cherry: Yeah reimbursements right? The problem was there was a system there that was supposed to help them, but they didn't hold people to the system. So, if you were late they would let you off. So what happens they were spending all this time doing this other work and then not getting other jobs done. So one of the things they looked at was we've got to be tougher on our system. So they started saying no. If you don't get it in this week you don't get anything paid till next Friday. People didn't like it in the beginning, but once they started doing it people realized that they actually meant what they said. They were able to make a big impact and improve. They saved about 20% of their cost because they weren't applying their own system.
One of my clients in India they've got a bus ... these bigger countries with big populations they often bus all of their people in and bus them out because it's too expensive for travel. But guess what would happen? The bus was supposed to leave at 6:00. So what would you predict probably happens at 6:00? There's no one on the bus. They're waiting for people. If you don't leave at 6:00 then people soon realize they can get away with it.
So they started applying their system. For the first two weeks they had a car available for people who were late. Then they'd let them know that you're getting driven but after two weeks this is gone. Now no one is ever late to the bus.
One of those things that we often do but we're not holding people to account they get away with it. So one of my sayings is adults are just children in big bloomers.
Zoë Routh: Adults are just children in what?
Craig Cherry: In big bodies.
Zoë Routh: And big bullies.
Craig Cherry: In big bodies.
Zoë Routh: Oh big bodies. Okay. Adults are children in big bodies.
Craig Cherry: Children work out what they can get away with. Children work out which parents going to be the easy touch for whatever thing. I remember when I was a teacher we had a saying, "In the morning they'll look you over. After morning, they'll talk you over. After the lunch they'll do you over." If you let them and they would. They wanted teachers who control them. Sorry I'm getting side tracked here.
My point is that you would look at a team and how you would get team performance. It's holding people to account and sticking to agreements allowing people to come up with measures for themselves and giving them accountability. But the holding them to that accountability. If there's no consequence ... consequences are a really big thing. If there's no consequence negatively or positively then what's the point?
Zoë Routh: Yeah that's true. So, I want to ask this question about the difference between measuring staff loyalty and measuring employee engagement. Because there's heaps of research out there saying that disengaged employees in crazy amounts of numbers up to 70% of employees are disengaged. Do you measure employee engagement? Or not?
Craig Cherry: Well I think we're doing it just through the way we do it. Sometimes it becomes semantics. If they're not engaged they're not going to probably recommend us. So there really is an engagement survey. That's what you call it. Are your teams engaged? Are they giving you best efforts? Are they willing to come to work? All these things I've been mentioning, all the things help assisting. Obviously it all comes down to getting the right people. If you're not spending time on recruitment and actually working out the type of personality you want. You can teach people skill once you get the right person who wants to be there and wants to do a great job. I think people miss great people because they go, "You haven't got this level of experience." But how do you get it if someone doesn't give you the chance?
I actually do a lot of hotels. Some of the best staff and the ones who just love customers had no previous hospitality experience. But, they loved people. They loved serving. I had to fight to get them to recruit like that. Because they go, "No they don't have any ..." I go, "Yeah you're getting people who have the same behaviours and they're just going to repeat that. And they've got all these beliefs already. If you get the right attitude and the right personality we can teach them how to serve meals and wait behind the bar or whatever you want it to be." So I sometimes think we've got a flawed way of thinking about ... everyday you look at jobs and you think, "Why do they say you have to have that? Nobody has 20 years experience. Come on. Surely someone who's a keen learner and taking themselves on, and developing themselves surely they can ... a 32 year old with five years experience can do really well." But we seem to limit. I don't know. Probably old beliefs I suppose.
I think loyalty and engagement are directly entwined.
Zoë Routh: Yeah okay. That makes sense. So you said earlier that ... you quoted that statistic, 96% of problems in an organisation are systems related rather than people. And there's also the factor of making sure you get the right people from the start.
Craig Cherry: 94.
Zoë Routh: Sorry.
Craig Cherry: But that doesn't mean that people aren't important. In fact, in research about companies they talk about the people the most. So that's not saying that people aren't ... people are normally critical to loyalty and customer engagement. I've worked with companies who sell their products for a million plus dollars. How do you mention the product? They go, "I'm giving this company 10." They always return your calls. They're really helpful. And that company would have sworn it's all about your product and your price.
People are critical but people are direct correlated to the system. So great people become average in a poor system and average people become great in a good system.
Zoë Routh: So one of the key aspects of systems and people is the leader's function. You mentioned your vin diagram at the beginning leaders, teams and I've forgotten now.
Craig Cherry: Customers.
Zoë Routh: And the customer. So with the leaders and your leaders as coaches training program. You teach them how to give effective feedback. What are some other key skills or processes that leaders need to get a hold of if they're going to be successful in building employee and customer loyalty?
Craig Cherry: I think one of the biggest things for leaders is self-awareness. One of the sayings we have is what is the shadow you cast? People have this misbelief about who they are. They think they're this wonderful, friendly person and everyone's scared of them. So, what's the shadow you cast? How do people perceive you? What's coming out of your mouth? The problem for leaders is they cannot say whatever they think. They've got to be thinking all the time, "I'm a model." So for example if you've got service standards the leaders need to be modelling them. Whatever it is that you're doing it's got to be modelled from the top. We teach leaders like the frontline service behaviours. I had the President of Shell retail in the world working behind a counter in the UK serving customers. He loved it because he got it. He goes, "Oh my God you get quite tired don't you? I'm only doing two hours and I'm tired now. I'm exhausted."
I go, "Yeah, but you expect your staff to do this for eight hours." So I think getting people to understand ... even though we did that when I was young and I went through it a bit you forget what it's like to do a repetitive job again and again. So I think them leading by example and being really aware of ... I had a leader say to me. We were doing an exercise with her team and one of the things she shared was you really have to motivate yourself. His whole motivation team I'm going to motivate myself to come to work on Monday.
And I thought, "Oh you do not get modelling."
Zoë Routh: Yeah that's a great message to say.
Craig Cherry: He goes, "Oh, I'm this great leader." You have to be thinking all the time what's the model you want. If you want your staff to be energized are you energized? I can see the impact with me and my company. I'm very aware. But it doesn't mean I can teach this stuff, but I don't always get it right. We have a saying when you're learning your living. Sometimes it's not too much fun learning. It's not just getting feedback but it's understanding the impact that you have. Are you watching people? You can't just sit in your office and lead.
We actually do quite a lot of exercises where we coach people. We coach all our leaders in exercise. One is drawing. They've got to stand to a wall and draw the highest line they can. Toes touching the wall and they all got the same pen. Different colours with the same exact design and they're going to hold the pen exactly the way I show them. I make them repeat those rules out loud so when they tell me the rules I know they know them. Instead of me just telling them, do you understand? Then I do the exercise and I'm standing right there watching them. If their feet don't touch I correct them in the moment.
I don't say you did it wrong. I go make sure your toes are touching. There's no point telling them later on you didn't do it correctly. You've got to be there with people so you're evaluating then giving feedback. And then I coach and do an exercise. I do it again. I normally will get about a three to six inch improvement. People can't believe it.
Zoë Routh: Really?
Craig Cherry: Yeah. I think a great way of teaching people is getting them to experience it for themselves and then we break it down. So the second time I lifted my energy. I got them to say out loud. I did stretching and all sorts of things, visualization. One of the things I got them to say is, "What are you now? Tall person. Show me that tall person! Yes!" You get them fired up you're suddenly a bit taller.
Zoë Routh: That's why Tony Robins is seven feet tall.
Craig Cherry: Yeah that's right exactly. He's a great model of these sort of things. I think that's really important to leaders. They should know the standards. Live the standards. Be all the time. Doesn't mean they don't muck it up. They have a chance to check in with people. I think all the coaching I've taught one of the biggest thing with leaders is they are tellers. What we would say is you need to get the words out different. You got to ask questions. You can be interesting or be interested. So people who do a lot of talking are all about being interesting.
In my experience I've done this in many many countries now with thousands of leaders. I would say 90% of all leaders I've trained were unconscious tellers and they didn't even realize they were. They would tell everything. "You're going to do this and then this." Then they wonder why people aren't very motivated. I think it's a really good one. Get the words out of their mouth. How could you improve selling? What could you do next time? Great. That's a great solution. Let the people think about these things for themselves.
Zoë Routh: That's awesome. So, tell me do you have your favourite example of how you turned a company around with these kind of interventions? Have you got a classic one to share?
Craig Cherry: One of my first projects I was doing this project in South Africa. I was working for a guy in Australia and he got promoted to become manager director in South Africa. This is a company that basically sells and services big diesel engines like for shipping and trucks and mining. When we went there ... of course if a CEO leaves it's one of two reasons they're upset or they decided to move. This previous one got sacked. Sales were flat mining was pumping in Africa. So the first thing that when I went over there he said show me the research and why aren't customers returning? Clearly if you've got low sales you got a customer loyalty problem. I guarantee you that they're not all returning and they're not promoting you to their friends and colleagues.
So, of course they had none of that so he brought us in. We started doing the research. We put all the training systems and all these things I've been talking about in place. By the first year they grew by 19% that was a $35 million business. In the second year it was a 22%. Now they're part of a global company. Their global sales average was bout 1.5% and people went there. Of course, it got noticed because they're going, "What the hell is going on in South Africa?" People went there and there was an energy. We did the fired up thing. They even have big posters on the garage when you drive big trucks to get at the engines. Had fired up ready to go, 10 out of 10 that's our show. It was on the bottom of their e-mails. They just lived and breathed it but it. He even helped me train because we couldn't afford to bring two people down because the really low currency.
So if you're training someone you need about one to six ratio otherwise you don't get enough person to person practice. So he helped me train for two weeks. The CEO with me every day helping me co-trainers. But of course the impact of that was people thought, "Man this is coming from the boss. This guy's really passionate about this." So we achieved numbers that no one believed possible. It continued to grow. Now it's just like another level. They're one of the two largest merchants in the world in the last 20 years. I think it was 280 engines. $55 million. It's transformed who they are now.
Zoë Routh: That's so exciting.
Craig Cherry: Yeah it's cool. I now work in about eight countries now with this country because of it.
Zoë Routh: Yeah. Fired up ready to go Craig.
Craig Cherry: That's it.
Zoë Routh: I am so motivated to do that with my team now. That's great. Awesome.
Craig Cherry: Well make sure you watch the video just Google it. It's a really, really cool story.
Zoë Routh: I will Google it. I will put a link on the show notes, which will be at zoerouth.com/podcasts/loyaltyzone and we'll have a link to that wonderful little video clip there as well as a link to Craig's website as well. Anything else you want to share with us before we wrap up?
Craig Cherry: I think as I've said it isn't actually as hard as we think it is. It's just what you're doing every day. I use a lot of posters. Another saying is it's everybody every day, every time without fail no exceptions. So near enough is not good enough. If you're willing to do that you can actually achieve things quite fast.
Zoë Routh: That's awesome. That's a great message. You're a real pleasure to talk with. I can see why your customers are loyal to you because you are so dedicated to this whole concept of people matter. That resonates with me too because people do matter for me too. Thank you so much Craig. I really love your work and I love hearing your stories and your insights. It was fabulous.
Craig Cherry: Zoe, it was my pleasure.