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On Purpose

Page 22

by Shaun Smith


  What Paul Willcox is essentially explaining is how he is dealing with two of those three Cs that stop growth, which we mentioned at the start of this chapter: complacency and customer indifference. Nissan doesn’t have a big problem with getting access to capital. The key challenges for a business that is so big, so capital intensive and so diverse as Nissan is to stay agile, hungry and forward thinking. Transforming the way the business operates so that the customer-focused purpose (brand) is at the centre of everyone’s thinking is a major task. However, the approach taken by Nissan both guards against complacency and ensures that the customer is integrated into every decision, short and midterm.

  Nissan Nismo

  One powerful way in which Nissan keeps the sense of innovation and excitement alive and tests ideas that will be eventually brought to the mainstream market is through the Nissan Nismo sub-brand. Nismo is technically Nissan’s Motor Sport Division (hence the Nismo name). But in reality it is much more than that. Most major motor manufacturers have a motor-sports arm. Traditionally, they were used as a way of providing credentials for their ability to deliver high-performance engineering. Many manufacturers even have teams that compete in Formula 1 such as Mercedes, Toyota and Renault. Rarely, though, are the ‘on-track’ technologies, which ‘petrol heads’ know about, integrated in any meaningful way into the road cars that most people drive. But Nissan takes a very different approach. For Nissan, the purpose of its performance division is not to win a Grand Prix, though it is extremely serious about competing in races; its purpose is to be a laboratory in which maverick engineers can create exciting ideas that will find their way into mainstream road cars eventually. Moreover, it transfers the excitement and the maverick edge of innovation that it builds into the Nismo sub-brand directly into on-road vehicles. The Nissan Juke, for example, which is another highly successful crossover vehicle, has a Nismo grade – as does Nissan’s sports car, the GT-R.

  Image 9.2 The Nismo DNA

  But Nissan Nismo is more than product. It is an attitude that affects everything, including marketing and consumer experience. Darren Cox is the head of Nissan Nismo globally and he explains why and how it helps to fulfil the purpose of Nissan’s brand, making innovation accessible and useful to the many, not just the few. He also conveys the sense of urgency, of restlessness that brands who refuse to stand still display.

  Brands have written down on pieces of paper bullsh*t that no one believes in, unless you are living that brand. In our case it is innovation and excitement for everyone – and Nissan NISMO is the maverick edge of the brand statement. We are pushing the envelope, doing exciting stuff like garage 56 at Le Mans, ZEOD RC, GT Academy, Juke R and LMP1, which will show that we live the brand.

  The best example is GT Academy. There is an established way of doing things in motor sport; the whole business model is built on it but it’s not fair and it’s not for everyone. Nissan’s brand is about including people, so we set up GT Academy as a way of doing that. We get the widest selection of people to do their dream job, which is to become a racing driver. It’s completely different to anything that anyone has ever done. Innovation is uncomfortable when you start doing it and lots of people didn’t want to do it, but now everyone looks back and says that, of course, it was a brilliant idea! I keep saying that GT Academy was 2 per cent inspiration, 98 per cent perspiration. It was all down to the bloody-mindedness of knowing this was a good idea and not giving up. And that’s what you have to have – single-mindedness. However painful it is.

  We use Nismo as the test bed, trying things out that others wouldn’t; not just in product and technology but also in approach, in marketing. We can do stuff and it can fail but it won’t hurt the mother brand because we are a bunch of mavericks in an innovation hub and we are prepared to fail. Accepting that every now and then you will fail is something that no one ever talks about, which is amazing. I remember we spent quite a lot of money on something called Free Race. We had success with GT Academy and thought ‘Okay, where else can we take this?’ We thought we could do a mixture between Fight Club and Fast and Furious using social media. We wouldn’t even talk about the fact that we were Nissan, we would just talk to drivers and get them along to an event, such as an underground rave at night. We had cars burnt out upside down, we had oil drums with fire coming out and people were filmed racing around those in disused car parks and airfields. The idea was great. You were the best driver, in a raw way – you just turned up to this underground society and the best driver would win a race, a proper race. But it didn’t work. Because social media wasn’t as advanced as it is today. We wanted it to create a natural buzz that built momentum, but in the end we needed a push behind it, we couldn’t do it just on social media. And it ran out of steam.

  But that helped us with what to do next with GT Academy. There, we had a ready-made audience base in gamers – we were not trying to create a new base of fans, because there was already something that existed. So we concentrated on them and made them feel special by using gaming in a way that no one else does. We believed, like them, that gaming is a very rich experience and not just child’s play. The guys that were playing on Gran Turismo One are now buying Porsche 911s, GT-Rs and Aston Martins. Those 18-year-olds are now 40 and 45. So we don’t underestimate who is using these tools now – whether it be social media or gaming or Twitter, or even that some sites we work in partnership with look very childish – because the way they promote themselves means they have a huge following of the right kind of people who will be driving our cars in the future.

  Image 9.3 Nissan’s global advertising features Usain Bolt as Director of Excitement

  We have a strategy that we call ‘the regular and the spectacular’. You have to put something up every three or four days that will drive people to Nismo TV, so they subscribe to the channel. We build it organically, we don’t buy views, we don’t buy followers because in the end that’s just numbers, and it isn’t authentic. But our average view time on Nismo TV, for example on the LMP1 video, is 180 per cent. In other words, people are watching the video twice! They are not robots just starting the video then stopping again. In the end the engagement matrix will be the one that everyone will talk about, not the number of followers you’ve got or subscribers or whatever. That’s why I say that it is our job to be storytellers. We have to find and tell the best stories that already exist in the company and we have to go out and create new stories – the regular and the remarkable.

  www.youtube.com/nismotv

  We have more YouTube subscribers than any other motor-sport brand. From a minimal budget. We’re bigger than Renault who has got a Formula 1 engine, we’re bigger than Honda, and we’ve got more subscribers as a motor-sport brand than anyone else. Why? Because we’ve got good guys who just love what we’re doing. And because we never stop. We never give up.

  Some readers of our previous books have told us they enjoy the stories but wonder if they can be applied to their own situation. Despite the fact that we have written about almost any type or size of business, for some people the impression remains that only brands that are consumer focused or that have big budgets can be bold, can stay true to their purpose.

  So we finish the chapter with a case study that is about as far removed from a consumer brand as we can think. It’s a B2B, it’s a manufacturing company, it’s based in an unprepossessing business park in Letchworth, England, and what it does is ubiquitous and unglamorous. At least, that’s what some people might think. But this business is possessed of a great sense of purpose, has a bold vision and is focused on growth that is driven by integrating customers deeply into its plans and processes. The company is called Altro.

  Image 9.4 Nissan’s GT Academy

  Altro

  Altro is one of the most successful specialist manufacturing brands in the world. You might not have heard of it but you will have walked all over it. In 1947, Altro pioneered the concept of safety flooring – making floors t
hat were inexpensive, hygienic and stable to walk on for large surfaces in big public areas such as factories, hospitals, schools and on public transport. It replaced the expensive and hard-to-clean ceramic tiles that had previously been used. They remain proudly independent, committed to manufacturing and innovation. A multiple-award-winning company with a turnover of £120 million per year, it has offices around the world, including in the United States and Asia. It is passionate about its people, having been voted one of the Sunday Times 100 Best Companies to Work For for eight consecutive years (as of 2015). And it is driven by a commitment to customer insight. Its pioneering ‘Voice of the Customer’ programme integrates the views of its customers directly into the processes of the business. Its values are succinctly expressed as ‘valuing our customers, valuing each other’. If Timpson champions upside-down management, Altro is an advocate of and evangelizes outside-in thinking.

  The company is always in pursuit of the new. It understands that it cannot stand still and it has a bold vision of its future, which will deliver its purpose of ‘safety, hygiene and sustainability’ to people’s homes throughout the world.

  Richard Kahn, CEO

  ‘Am I good enough to run this place?’

  That was my first thought when I took over the organization.

  Managers had come through the business and reached a senior level, but then came the question ‘Okay, so what are we going to do with these people…? We’ll put them on the board.’ So we had a UK sales director and overseas director, we had a manufacturing director, a technical director. In fact, we had almost double of everything and it was more difficult to make those harder decisions. Also, everybody was sitting there waiting to be told what to do at every level.

  I was sitting there thinking, ‘I can’t bloody do all this.’ And so I had to turn it upside down.

  Turning the organization upside down

  We reduced the board (it is now five people); we gave a clear direction and we empowered more people in the business to take the initiative, to have ideas. It’s all about leadership and not management.

  My main observation, however, when I took over as CEO was that we had a five-year plan but we weren’t all pointing in the same direction. So I introduced my first attempt at a new style of five-year plan. However, if I’m being completely honest, when I look back to our 2008 goal, which was our first five-year plan goal – it was so catchy in terms of the financial bit, that’s what everyone latched on to. It was financially driven.

  However, now we have inverted that. Now at board meetings we put purpose at the top of the agenda – and then our core values and our vision. Purpose is everywhere. It is driving everything we do. We said ‘If we get this right, the finances should sort themselves out.’

  So whereas we used to have a financial goal right at the top of our strategy, we’ve now got one that is sitting at the bottom. If we get this right, we should have growth in the business of 6.5 times, taking us to $1 billion.

  So we have our purpose to take responsibility for safety, hygiene and sustainability at the top. Then we have our core values of valuing the customers and valuing each other. Finally, we have our vision for the business. We have put in place measures so that the board is monitoring on a quarterly basis how we are getting on, ensuring that the purpose, the core values and the vision are all aligned.

  Vision

  Our long-term vision is completely in line with our purpose and our core values. For me, it is absolutely critical that you have all three completely aligned. You need everybody to understand – from the very top through the organization, through to the customers – that it is all completely aligned.

  The vision is to operate on a truly global stage; at the moment 50 per cent of our sales are outside the UK. It is a vision of Altro as a household name everywhere.

  Our products are going to be smart. They are going to be interactive; they are going to be sensory. They are going to provide a service for the customer that is more than just a floor and a wall. They are going to be something beyond what we understand at the moment.

  One of the products we are looking at in terms of smarter products is a floor that when you walk on it would generate energy – energy harvesting. Imagine a hospital corridor with all the lights being powered by all the people walking down the corridor, that’s a very different proposition to just providing a roll of flooring.

  The interactive part is important as well. The wall panel in an operating theatre or on a train or plane won’t just be observed; people will be able to do their work on our surfaces; there will be temperature control or technology that identifies germs etc.

  We also can’t really achieve our purpose without digital. Digital could revolutionize our product range. Think about areas in hospitals, big walls and all the rest of it with people waiting, people working. Imagine if you could interact with the floor or the wall and you use it as your computer – or if the kids could draw on the wall.

  Product development has always been very important within the company but only now – due to our purpose and vision – have we decided to resource the more creative innovation. We have increased the headcount of R&D by 50 per cent, including a dedicated team of five people working purely on innovation for the long term. Our purpose is to take responsibility for safety, hygiene and sustainability. So our products will also have to be 100 per cent recyclable in order to drive towards sustainability.

  We need our products to be sustainable both in the sourcing of raw materials and in their recyclability after use. We haven’t sent any products out of this factory for landfill for six or seven years so we have sorted out the factory waste and we have one of the leading schemes in the world in terms of return material from installation. So we have sorted out the installation waste. Now we are sorting out the post-consumer waste. When flooring is ripped up it brings half of the subfloor with it and is very, very difficult to recycle. So we invented a floor, XpressLay, which can be loose-laid so it doesn’t bring up half of the subfloor with it, which means it can be recycled.

  XpressLay was used in huge quantities for the Olympic Games in London because they wanted a product that they could recycle. After the Olympic Games it was reinstalled in local schools. That for me is leading the industry: to have a product that in terms of both content and post-use is completely recyclable.

  Image 9.5 Altro XpressLay flooring for the London Olympics, reused at a school in Kent

  Core values: customers

  One of our core values is valuing our customers. We want our ‘Voice of the Customer’ programme to be the benchmark around the world. When people are looking at this type of programme anywhere in the world, they will be coming to Altro saying, ‘Wow, how the hell did they do that?’ To take that beyond where we currently are, we have to understand not only the voice of the customer but also the behaviour of the customer. And those behaviours will lead us to develop new concepts and products.

  Valuing customers is not just providing world-class customer service, because lots of people are doing that; it’s getting your customers integrated into your business. So we’ve got a measure that, by 2016, 50 key business decisions across the global business will be taken each year following customer feedback. This should cover products, place, promotion, price and people. In fact, we are already ahead of the target. More than 50 key business decisions were taken last year as a result of customers saying, ‘We think you should do this.’ It is about getting those customers really feeling like they are part of the business and using them to help drive the business.

  We are taking a leadership position and working very closely with customers on their bigger issues in order to understand how to solve the long-term problems. We are focused on transport, health care and education, which are big infrastructure areas so it is worthwhile investing the time to understand our customers’ needs at this level.

  With an ageing demographic, there will no
t be such a clear split between public services in terms of health, education and your private life. More and more people will be looked after in their home. We’re going to have to manage society’s needs right across the community and, obviously, building design is a real key part of that. People’s home environments will need to be more flexible.

  As we listened to customers, one of the things that became clear was that we needed to sharpen our purpose so that we had a consistent language throughout the organization and a common focus through which to make decisions. For example, people would ask, ‘Why aren’t you selling really cheap vinyl tiles that are £3 a square metre? I could sell loads of that for you in the United States.’ I would say, ‘Well, that’s not really what we are about. Other people do that, other people compete on volume and price but we don’t.’ So I felt we needed a clearer way to articulate what we are about and why we are making certain decisions. The customer feedback within our industry was that we were the only ones that even had some level of specialty. So I said, ‘Well, let’s not dilute that, let’s not just be stuck in the middle and let’s remain true to our roots.’ It was a combination of our history, strategy and standing out in the marketplace.

  Core values: valuing our people

  It’s not just about valuing our customers, it’s about valuing each other, communicating well with each other, people understanding a sense of direction, about the teamwork, about taking responsibility, about people having autonomy, people being recognized, people being rewarded. It just so happens that the Sunday Times 100 Best Companies to Work For survey is one measure of that. We are more or less the only manufacturer in the top 100 for eight years in a row.

  I think we were always great at valuing each other and working together but was it always for the ultimate good of the customer? Probably not, which is why we gave equal emphasis to valuing customers.

 

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