Knauf Fiberglass, headquartered in Shelbyville, Indiana, makes insulation and other building products for residential and industrial/commercial applications. Knauf's strategic accounts are its distributors. In the early 1990s, Knauf began to get rumblings from these distributors about product and service quality issues. Knauf executives, though, did not want to allocate resources for fixing things until they could prioritize their largest distributors' expectations, needs, and what they thought needed to be fixed.
Knauf arranged for six videotaped focus groups (two each in three locations across the United States) to assess its critical distributor relationships. The focus groups helped determine (1) what distributors expected from a world-class fiberglass manufacturer, (2) which Knauf/distributor interactions were critical, and (3) which of Knauf's interactions it performed effectively and which Knauf did not perform well. At this point, Knauf had 12 hours of raw customer video, much of which Knauf executives watched. Knauf then had a 50+ question, in-depth survey designed, based on the critical distributors' needs and expectations—as stated in the video focus groups.
Jeff Brisley, vice president of residential sales, managed the distributor assessment project in a way that helped Knauf's culture become more aligned on the distributors' needs. Historically, Knauf suffered from the common split between sales and other functions. Because Brisley knew that the assessment results would impact many areas outside sales and marketing, he asked executives from other departments to join the customer satisfaction steering committee. This decision, as one Knauf executive said, "was the single best we made in the whole project—and it was a very successful project." The steering committee included decision makers from finance, marketing, manufacturing, logistics, and sales. It is another example of a firm that turned a sales initiative into a business initiative, breaking down internal and external barriers as it did so.
Knauf mailed the in-depth survey to its distributors and received a phenomenal 90+ percent response rate. It showed that Knauf had an excellent relationship with its distributors and also prioritized those areas that needed to be improved. When the survey had been both qualitatively and quantitatively analyzed, the conclusions were presented to the Knauf executive team. Knauf then returned to the video focus groups and had two 20-minute edits made—one targeted at plants that produce residential products and one targeted at plants that manufacture industrial/commercial products. Knauf then sent joint teams of marketing and manufacturing people to each plant (to show both areas supported the study). The Knauf presentation teams gave the overall conclusions and then showed the appropriate video focus group to each of the four shifts (three shifts and a swing shift). An open discussion followed. Knauf paid all employees for their time, another signal of how serious the firm was.
In the last two decades, we have again and again seen employees who are more willing to change their behaviors for customers than they are willing to change behaviors for their supervisors.
We have again and again seen employees . . . more willing to change their behaviors for customers than . . . for their supervisors.
Employees want to do the right thing. In many cases, though, their firm has not told them what the right thing is because it lacked objective customer information. In the absence of that information, employees will simply do whatever they are rewarded for—which may directly contradict what the customer wants. Or, just as common, the right thing in sales is substantially different from the right thing in operations or manufacturing or billing, etc. Knauf creatively used a traditional market research technique that allowed customers to speak directly to its employees, telling them what was right and what was wrong. Knauf then challenged all employees to do the right things more effectively.
To help its customers and employees, Knauf set up cross-functional multilevel SWAT teams to attack the problems the assessment had isolated. Some of these problems could be fixed quickly; others required 12 months or more. The critical point is that, at a time when Knauf was stretched thin (needing a new plant to meet increased customer demand), employees dived in and fixed the issues the distributors had identified. And the fixes were not temporary. When Knauf repeated its assessment in 2000, there were almost no overlaps between problems uncovered in 2000 and those discovered in the early 1990s. And of the few overlaps identified, the gaps between what the distributors expected and Knauf's performance were significantly smaller than those found in 1993.
The assessment/alignment process was so successful that Knauf considered it important to develop a mission, vision, and values statement that reflected what the company was and what it wanted to be. In the mid-1990s, Knauf developed the following mission, vision, and values statements:
What are we here to do? (Mission)
To manufacture and market fiberglass insulation products that customers prefer.
What do we want to be? (Vision)
The best national manufacturers of fiberglass insulation products as measured by product quality, service quality, and financial performance.
What are the rules? (Values)
To accomplish our vision, we must . . .
Create an atmosphere of continuous improvement;
Create an attitude of customer satisfaction from the inside out;
Create a sense of dignity in all positions; and
Operate under the priorities of safety, quality, and productivity.
Knauf then carved those statements down to specific objectives and performance goals for employees who interact with the distributors. Through politically savvy project management, the active buy-in of multiple executives and their departments, the direct voice of the customer, and what it admits was more than a little luck, Knauf created a mission, vision, and values statement and developed better internal and better customer relationships. By communicating deeply within the firm, Knauf moved many employees from compliance to customer commitment. And an unintended result of the assessments and SWAT teams was that Knauf's employee satisfaction rose dramatically.
Yet another way to align your organization comes from a firm known for its global customer focus—Marriott International. Marriott is famous for hiring for and continually reinforcing customer focus in its culture—even with the traditionally high turnover of its industry. Marriott's alliance account directors are able to leverage that customer focus with employees around the world by creating global and national teams dedicated to those customers. What makes the case special is that team members receive no direct compensation for serving these accounts—and the results are outstanding.