A CEO I was coaching received an emergency phone call during one of our sessions. A customer was distraught. His order had just been delivered and it was damaged.
He’d ordered half a truckload of frozen tarts for his small grocery store chain. He’d run a seasonal special featuring these tarts.
It was scheduled to start the next morning.
The tarts had arrived on a refrigerated truck that had a broken cooling unit. Due to that, combined with the unseasonably warm weather, the load had defrosted.
I heard the customer say, “Bill, you promised me that once I place an order with you, it’s as good as in my showcase the day I need it. This is a disaster. How can I count on you again?”
The CEO was embarrassed and angry. This was a good long-term customer. The customer was right. Bill had promised that once an order was placed, it would be delivered – on time and 100% accurate.
The CEO made it right. He overnighted three quarters of a truckload – all the customer’s freezers could hold – the extra quarter for free – directly to the stores. He juggled other orders to do it. He called for an extra run of tarts at the factory, and went out to investigate what had happened.
Bill took his promises seriously – more so than his people did. He was angry as he toted up the cost of this disaster for me. He was angry that his company’s name and his reputation had been treated so badly.
We talked the issues through and decided that the financial cost was a symptom. The deeper problem was that he was making promises that his people didn’t support.
Bill decided to share the results of his investigation with the staff of the distribution center in question. Later, he’d take his message to his company’s other four distribution centers.
He called a Saturday morning meeting with the entire center staff. He paid them for their time. He told them that he wanted to talk to them about the incident as a critical business problem that had to be solved, and he needed their help to do it. Here’s what Bill said:
“I asked you all to come here on your day off, because I believe that we have a problem that could seriously hurt our business over time, if we don’t take decisive action. I want to share the story of what happened, and then I want to ask for your ideas about how we, as a company, should act.”
Bill wasn’t angry in his presentation. He realized that venting his anger would simply make the guilty people feel defensive and pass the blame, while those not involved would feel no responsibility. He didn’t mention anger and only indirectly alluded to the money it had cost to fix the problem. He focused on deeper issues.
“I’m worried. I can see the seeds here of real problems that can threaten our business, our jobs, our livelihoods. The implications of the threat are serious enough that I wanted to get your help as soon as possible.”
“Sam Powers, of Powers Groceries, called and was distraught. He’d counted on our, “You can count on us - 100%” promise, and we’d let him down.” Bill told the story of the unfrozen tarts, and the problems caused for Sam with his advertised sale. He described Sam’s distress as he worried about his business, because he had trusted their promise.
“I felt so embarrassed for us. We had hurt a good friend. Sam had stuck with us as his supplier when our competitors made a run at taking his business away. Sam had told me that he just didn’t have the same level of trust in those other guys. Our products were good. Their products were good. We’d kept the business, because we also delivered peace of mind along with our products. Ladies and gentlemen, we’ve shattered his peace of mind. Now we are no different from our competitors.”
Bill then told the story of his investigation, as if it were a detective story. The order had been taken and processed appropriately. It got to the warehouse floor in plenty of time.
The second shift supervisor knew that the truck had a spotty refrigeration unit, but it was scheduled for maintenance the following week, and so he decided to take a chance and kept the truck in the queue. The router put the load in question onto the truck first, as it was going the farthest.
He didn’t realize that this truck had a problem. He filled the rest of the truck with numerous smaller orders for other customers along the truck’s route.
It seemed that the loading crew noticed that the truck seemed a little warm, but they decided that it wasn’t too bad. They sure didn’t want to unload this truck and start over on another truck, if they could even find another refrigerator truck.
By the same token, the driver needed the run, and if his truck was out of action, he knew there wasn’t another truck for him to drive and he didn’t want to spend the day working in the warehouse.
With frequent stops and the time spent with the doors open unloading the other orders, the refrigerator unit died. The driver was embarrassed when he arrived at the Sam’s, but he unloaded the product and figured that some of it could still work.
Bill said, “There were at least five people who made decisions not to raise a red flag. As a direct result of all of those assumptions and individual decisions, we broke our promise.
No one decided from the company’s point of view.
We all missed it, being focused on getting our individual jobs done. Nevertheless, we broke faith with the customer. Our company’s reputation is on the line. It’s my name on the promise, but the people in our company each have their own individual parts that contribute to our being able to keep our promise. I need your help. We can only do this if we are working together. What can we do?”
The audience broke up into teams and discussed the dilemma. There were several recommendations generated, but one stood out. One team recognized a problem from the story.
They labored anonymously and really didn’t think about the company, if their part went OK. They also realized that the lack of communication that resulted in the whole situation arose, in part, from the way things worked in the distribution center; orders were filled by whomever was available.
A young woman with a digital camera offered a solution. The warehouse would break up into consistent work teams that would be dedicated to particular customers - from the order takers to the drivers - and would work together over time.
The picture of the team that handled a customer’s order would be scanned onto that customer’s invoice, along with their names and the brand promise as their pledge. In effect, they’d sign their work.
Their names would be out there, along with Bill’s. The logistics of this solution turned out to be pretty simple, and team consistency was helped by the low turnover this company enjoyed.
They got it. The story helped them to see the issues in their proper perspectives, and it enabled them to generate a solution for the “right” problem, rather than one of the symptoms of the problem. Accuracy went up.
Morale soared, and occasionally, people from the team got to follow up with phone calls to “their” customers, to make sure that everything was going well. The idea quickly spread to the other distribution centers as the story made its way across the company.
This story demonstrates how a leader can use a story to build business. There are several points that are worth noting.
Bill could have expressed his anger and exasperation at the distribution center people for “screwing up.”
He could have gone into the meeting and pointed out to everyone how much the unfrozen product had cost the company. He passed up that temptation and chose to draw people in rather than to alienate them by treating them like children.
Using the story he helped them see the real issue, which was that the whole team needed to commit to the company’s promise in a meaningful way.
In turn, the workforce came up with a better solution than Bill would have thought up on his own.
They signed their work. They personally stood behind the company’s promise. They recognized the importance of being partners with Bill in the success of the company. This enthusiastic commitment from the work force never would have surfaced as the result of a tongue-lashing.
The customers were delighted with the results of the new enthusiasm demonstrated by the teams. People in the warehouse kept track of when it was their turn to call their customers and check on their satisfaction. They were no longer anonymous.
The customers felt a closer connection to Bill’s company because they came to feel they “knew the family.”
The increased customer satisfaction resulted in increased sales. The commitment of the warehouse crew led to fewer mistakes in order fulfillment, less damaged product, and a level of care for “their” customers that hadn’t existed before.
The story resulted in a financial return that quickly recovered the costs of both the original mistake and the training day, and it kept returning dollars to the bottom line.
Finally, this event spread through the company by word of mouth. The other distribution centers joined in. Other people came forward with other ideas for improvement. It became Bill’s role to continue to support the groundswell created by the company’s response to the mistake.
By the way, these folks were typical distribution center workers. They had not been outstanding before this. They were everyday working Janes and Joes---just like your people.
