by Shaun Smith
Many times people are put in little boxes and many times society doesn’t allow them to do things. You’re not allowed to do this or you are just allowed to do that. Here, as long as we explain to our people where we want to go, how they get there is actually part of the journey and is up to them. We have created a micro-society and we know what the values are, and we know that we need to be respectful and playful.
The words we use, the way we use them, when we use them, how we use them, and the joke that you can make with one person that is absolutely not the same joke that you can use with another – it’s about values and common sense.
It helps that our team are part of the generation that we target. They like travelling. They are young, or of the younger generation, so they are really into media. They like nice, expensive things and luxury items, but they don’t earn that much in comparison with others to be able to afford it, so they all believe in the affordable luxury concept… you need to believe in what you sell.
We’re looking for somebody who is outgoing, somebody who is not shy, somebody who wants to engage with others, who likes people, who likes to help people, from the heart.
I am not that interested in previous hotel experience. I think that if I were to hire somebody who has been in the hotel industry for 10 years he or she would not be as productive, because this person would have to erase everything they had learned. Sometimes to change behaviour is more difficult than to learn behaviour in the first place.
Our ratio of ambassadors to guests is about 1 to 10. A typical luxury hotel is 1 to 3 or even lower. For example, a formal restaurant within a hotel needs to have waiters, busboys; you need to have the chef, the assistant chef, the dishwashers, so you’ve got already a minimum of 10 people, easily. At the front desk you have the front desk manager, the front desk assistant manager. You have too many chiefs and to run it you have metres of front desk that requires four people to man at the same time. We don’t. We just do it with one or two ambassadors, because the guest is the one who checks themselves in. We assist them, and that is where we connect because by taking away the desk we take away the distance between us.
Our people stay with us because of the culture of the company and because of the way we treat them, because of the way we allow them to be themselves. For example, we don’t mind if they have a tattoo as long as it’s not offensive to anybody. And I think that my biggest role is encouraging them to flourish and open themselves. There is a girl who works at citizenM who, when I was interviewing her, was terrified. But I said, just let go and she became a bit more relaxed and started to come out of herself. And I thought to myself, she is going to be great because of her kindness, because of her smile, because of her friendliness. Everything else we can teach her. So we hired her and she opened up like a blossom, like a beautiful flower. Months later I came in and she was literally dancing along helping somebody to check-in; it was a beautiful thing to see.
One thing we do not tolerate is when somebody is not respectful. We were training one of the assistant managers, a young guy, who was a bit naive. One of our best ambassadors didn’t agree with the decision that this young guy took. He pointed at him with his finger and told him to learn. That ambassador was really one of the best people I had, but he crossed a line. So we sat down and I said, you don’t need to agree, but he is the assistant manager. He is running it. And if he says green, it’s green. You may see it blue, but it is green. And at the end of the shift, if you don’t agree you can sit down and say, ‘Can we talk about it?’ I finished by saying ‘Now we’re cool, but if it happens again we’re not going to be cool.’ And then he said, ‘Well, if you want to fire me, just fire me.’ And I said, ‘Okay, the conversation ends right now.’ He was one of the pillars of my team but I let him go because he was disrespectful. He crossed that line.
We’re here for a purpose and that purpose is the guest. We are very important but there is somebody else who is even more important: the guest. We focus on the guest’s satisfaction. We are measured on guest satisfaction. The financial numbers at the end are, of course, important. However, you can have fantastic numbers but if the guests are not pleased that is not going to be a sustainable model.
The difference between us and the Holiday Inn across the street is not the building, it’s not the technology – it’s the citizenM culture. And if we keep that in mind then whatever we do is going to be the right thing. I always say there’s no wrongdoing when you’re doing the right thing.
We interviewed Francisco and heard his comments. But to what extent are they accurate? To find out we stayed in the citizenM at Schiphol Airport and had a chat over a beer with one of their most regular customers to find out.
Michael ten Hove, mobile citizen
I first experienced citizenM in autumn 2010. I was coming to Amsterdam for one or two nights a week and was recommended by colleagues of mine who were commuting like myself, and spoke very favourably about the brand.
I describe citizenM as ‘affordable chic’, because they are trying to have more of a vibe, a groove to their place than just a standard hotel and they do it all in an affordable way. So you feel like you’re in a boutiquey kind of place without them having made a great investment in ridiculously expensive furniture. But it still achieves the vibe that they are going for. And they are consistent. In the three years I’ve been experiencing the brand they have always been very consistent with that.
It really comes down to two things: the first thing that comes to mind is the people. The people here are really extraordinary. I’ve rarely experienced this level of service-mindedness and attention to detail in any category. The second thing is the concept of the rooms themselves. Either you love it or you hate it. I think there are very few people who are in the middle ground. I hear people at the bar or at the restaurant who say ‘Gee, I just checked into my room, can you imagine how small it is?’ There’s no closet as such, there’s no real private space to go to the bathroom. For myself, I find it a lot more comfortable than many hotels.
I like the public area very much. I like the fact that it’s cozy, in a homely way, because when you look across there are books that you can just grab and read. There are interesting artefacts. So it’s got a funky, interesting, attitude and vibe to it. If you go to the airport Sheraton it’s just boring; the rooms are kind of, beige. The beds are great, I’ll give you that, but everything else is boring and sterile.
Turning to the people, I’m a special case because I’ve been here for so long, but even early on the staff call you by your first name. Other hotels don’t even know my last name let alone my first name. I call the staff by their first name as well. They’re very friendly. I don’t know how much of it’s in their training. I certainly think it’s in the recruitment because there’s a certain kind of DNA in people that tend to work here. It starts with the management, I think. Take Francisco, he’s somebody who really cares about his clients. He’ll go out of his way to stop and say ‘Hi, how’s things?’ Just last week, in fact, I was walking to my office, and he was walking to his office and he asked me ‘So how are they treating you?’ You don’t feel a sense of hierarchy here. It’s about rolling up your sleeves. It feels to me that that’s part of the internal culture.
The thing that impressed me the most of all my experiences was a couple of months ago I was speaking with one of the ambassadors, Georgia, and I was telling her that my wife was going to come up for one evening and would she be around, so that she could meet her.
I checked in that next week. I walked into the room. There was a beautiful bouquet of flowers for my wife and there was a message for me. I like to write music and songs, which I record, and post on the internet. They had taken the trouble to listen to the lyrics of my songs and find a song – I have this one song called ‘Home’ – and relate it to the fact that I was coming back to citizenM.
Image 8.1 citizenM at Schiphol Airport
All this goodwill has
translated into additional business for them because there have been people who I’ve recommended who have stayed here. Whenever I’ve organized things in Schiphol I’ve said we’re putting everybody in the citizenM. Forget about the Sheraton, put them in citizenM.
Note
1 The service profit chain was conceived by James L Heskett, Thomas O Jones, Gary W Loveman, W Earl Sasser and Leonard A Schlesinger.
Chapter Nine
Never stand still
‘In this very real world, the good does not drive out the bad, the energetic displace the lazy.’
BILL BERNBACH
‘The common question that gets asked in business is, “why?” That’s a good question, but an equally valid question is, “why not?”’
JEFF BEZOS
That Berber moment…
The year is 1885 and the British and Egyptian governments are facing a major uprising in the Sudan. The revolt, a bloody and sustained onslaught, has been raging for a number of years, led by the fearless al-Mahdi and his followers, the Mahdists.
General Gordon, one of Britain’s top military commanders, having been sent to evacuate the region, has been under siege in Khartoum for over a year. Despite being cut off from supplies, surrounded and outnumbered by a hostile force, he has managed to keep the Mahdists at bay.
Sensing the urgency of the situation, a British relief force, led by General Wolseley, has been despatched to Khartoum. Having swiftly made its way to Africa, defeating rebellious forces along the way, and making such good progress down the Nile, Wolseley decides to rest his men at a place called Berber, rather than continuing at the pace already set. They stop for a day before carrying on to Khartoum. Their purpose can wait.
Alas, they arrive too late. One day too late.
Less than 24 hours beforehand, Gordon has been killed and Khartoum has fallen, along with all of its 4,000 inhabitants.
The subsequent inquest into the debacle of Khartoum concluded that Wolseley had ‘inexplicably delayed at Berber on the Nile’.
Businesses cannot afford to have their ‘Berber’ moment
In business, stopping is not an option; consolidation is no longer a sensible policy. Businesses of all shapes and sizes that are performing well are possessed with a sense of urgency, a desire and the capacity to keep the momentum going. Innovation is part of this, of course. But it is only part. Momentum is about constantly delivering value to your customers and clients, about moving swiftly to execute plans, about being possessed with a sense of urgency. Joseph Cyril Bamford, who lent his initials to the manufacturing company he founded, JCB, believes that it was this impatience for action that was the hallmark of success. As he put it:
‘The world is full of very competent people who honestly intend to do things tomorrow or as soon as they can get around to it. Their accomplishments, however, seldom match those of the less talented who are blessed with a sense of the importance of getting started now.’
Get started and keep going
Getting started is only the start – obviously – you then have to keep going. This restlessness is so important that we feel it deserves a chapter to itself. It embodies some of the principles of innovation discussed in Chapter 5 but it goes way beyond that. Nokia was innovative, so was Pan Am, so was Blockbuster but it wasn’t enough to stop them disappearing. True innovation is not just the ability to come up with new ideas; it is the restlessness that means you can never sit still.
Over the many years that we have worked with and talked with business leaders, consultants and academics all over the world, we have identified three reasons why businesses stop moving forward:
Complacency: the business settles into a comfort zone; it loses its entrepreneurial culture and becomes managerialist. It attempts to turn the dynamic but risk-led growth that led to its success into predictive, risk-free growth. People come in expecting an infrastructure to support them in doing what has always been done before.
Capital (lack of it!): the business reaches a certain size at which it needs access to capital to fund new growth, it can’t fund it from its profits; unfortunately these businesses either cannot or will not seek and make the case for the capital they need to grow.
Customer indifference: they take their customers for granted, paying only the least possible attention to them and not sticking as close to them as possible so that they can anticipate and respond to their changing needs and trends.
Each of these is fundamentally caused by a lack of a sense of purpose driving people on. If you believe in your purpose and feel it is your duty to deliver it to the world, then your hunger will drive you to listen to customers, seek capital, and never, ever be complacent. Think about Amazon: they get criticized for the odd mis-step (such as Fire phone) and for burning through investors’ money, but that is exactly what has fuelled their extraordinary growth and why investors are happy to continue to invest in the brand. They have a purpose to be the ‘most customer-centric company on earth’ and to become the world’s largest online store – when you have a vision as grand as this, complacency is out of the question.
Many of the businesses that we have talked about in this book are succeeding because they refuse to stand still and wait. Metro Bank, which we discussed in Chapter 4, is not only the fastest growing bank in the UK in terms of customer acquisition, they are also the fastest growing in terms of branches. They are not complacent, they have access to capital and they are as far from indifferent to customers as you can get. Their strategy is based on bringing banks physically closer to customers, to get people back into branches. It is a capital-intensive strategy and one that is funded by deep-pocketed investors, and they are showing no signs of slowing down. Momentum and critical mass are vital. As of February 2015, they are opening almost one new branch per month, while the other high-street banks have been closing theirs rapidly. Barclays, HSBC, Lloyds and others closed 470 branches in 2014, a 140 per cent increase on closures in the previous year. Apologists point to the fact that people’s habits are changing and we are moving to online and mobile banking apps rather than a desire to go to a physical branch. There is truth in that. However, Metro also offers online and mobile banking apps but they are opening branches at a rate of around 25 per cent a year. More importantly, in terms of the sense of customer-led purpose, which this book trumpets, the banks who are closing branches are reneging on a promise. Lloyds Bank is only one of many who have gone back on a promise that they would not close a bank branch in a community if that were the last branch in town. So outraged were consumers by this breaking of a promise, that the UK government had to write to the bank demanding an explanation. Metro realize that a physical bank branch remains a potent symbol of and focus for a community. Being local helps in being loved – and being the bank people love is core to Metro’s purpose.
Metro’s financial figures are impressive too: in 2014, deposits climbed from £1.3 billion to £2.9 billion; new customer accounts were up a staggering 63 per cent; new jobs in those branches were up 50 per cent and the free food, balloons, face painting and music that accompany every branch launch increased as well! Moreover, in terms of the momentum of the business, Metro has opened business banking and within one year 64 per cent of total deposits in the bank came from business accounts. Metro’s chief executive Craig Donaldson said: ‘We’re excited to continue innovating and providing a real banking choice to the British people, as well as maintaining our commitment to deliver the best in service and convenience.’ They keep on going.
It’s not just new and challenger brands such as Metro that have this sense of urgency and momentum. No one could say that IKEA, LEGO or Apple are challenger brands, nor Coca-Cola, JCB or Procter & Gamble. They are all large, long standing and yet share a restlessness in their pursuit not just of product innovations but also of ways of staying relevant to their customers and consumers. For a company like Coca-Cola, for example, seasonality and occasion to purchase ar
e vital to understand. When and why are people’s behavioural habits likely to change or to be heightened? For Coca-Cola, a year of momentum will involve planning for everything from religious festivals, holidays, big sporting events and movie launches. It will also include anticipating regulatory changes, social trends, environmental or sustainability concerns. They need to be constantly engaged and engaging with customers, consumers and opinion formers to plan and execute, at speed, campaigns that make people (consumers and shareholders) happy.
One of the biggest trends that companies like Coca-Cola are responding to and beginning to drive is the increased importance of impulse and activation in store, in street, at home and online. In the past, there was a formula of brand building that involved big, expensive TV advertising campaigns, which take time to research, plan, shoot, produce and sign off. Then they require a lot of spend on media spots over time in order to sustain and create a brand image that pulls people into shops. These are becoming less important to brand owners such as Coca-Cola than agile shopper experience campaigns that drive purchase, create buzz and can then be turned into an advertising campaign that amplifies consumer behaviour. This is not innovation; this is about momentum, about responding swiftly to trends.
Brands that are stuck in the habit of spending big on campaigns are being out-thought and out-fought by brands that are creating moments of truth in the customer or consumer’s experience. Many of the successful campaigns that Coca-Cola has run in the past few years have not been big advertising campaigns, they have been packaging and point-of-sale driven: Coca-Cola cans and bottles with yours or a friend’s name on them; a campaign in Germany where Fanta bottles had white space left on the packaging label to encourage consumers to draw their own pictures. Both were driven by insights into consumer behaviour at the point of sale, which then became campaigns that both drove sales and an emotional relationship with the brand. There is no doubt that Coca-Cola will continue to change these campaigns regularly while still staying true to its purpose: