Organizations that deliver products of lasting value with genuine service are usually blessed with the leadership needed to bring a serving enterprise to life. Only executives can provide the vision and personal example that focuses a large organization on serving its clients. Home Depot would not be the same without Bernard Marcus and Arthur Blank. The Body Shop is inspired by Anita Roddick. Sam Walton created Wal-Mart.



Xerox executives spend one day each month taking complaints from Customers. The president of Hyatt Hotels occasionally works as a bellhop. Skip LeFauve invited all 700,000 Saturn owners to attend a barbecue at its plant; 28,000 people showed up, making it the "Woodstock" of the auto industry. "It's a good way to say thank you and foster a closer relationship," said Saturn's marketing manager.

Harley-Davidson has organized 700 Harley Owners Groups (HOG Clubs) that hold an annual rally; the highlight occurs when the company's CEO, Rich Teerlink, roars in on Iris own gleaming top-of-the-line Harley. When Teerlink first started this approach, the company was almost bankrupt. The stock has since gone from $1.20 per share to $26, and buyers have to wait years to get a Harley.

Herb Kelleher, the CEO of Southwest Airlines, is a clowning genius who sets such a friendly tone with clients that Southwest personnel often joke mercilessly with passengers. One flight heard this announcement over the PA system: "Good morning ladies and gentlemen. If you wish to smoke, please go to our lounge on the wing where you can enjoy our feature film, Gone with the Wind."

A small Oregon restaurant chain highlights the importance of leadership by illustrating all of the principles discussed in this chapter. After struggling to improve service, the CEO established a policy that all patrons must enjoy a pleasant dining experience. Just as Avis claims "We Try Harder" and Federal Express promises "Absolutely, Positively, Overnight," this company's primary goal was "Your Enjoyment Guaranteed. Always." As the CEO put it, "My company exists to make other people happy."

He then changed operations to ensure that this guarantee was fulfilled. Employees were told to do anything necessary to satisfy a customer-offer free drinks, meals, or special attention-and they were trained to do so effectively. Customer satisfaction was evaluated using a monthly phone survey and by measuring the number of complaints, and the total cost of resolving them was tallied. The company found that many customers had been unhappy but reluctant to complain, so they had simply voted with their feet and gone elsewhere. Under the new guarantee, the costs of correcting complaints rose, making the problems that were formerly hidden visible.

Where most managers would be aghast at seeing costs rise, this CEO recognized that such costs are symptoms of deeper problems, and as such are valuable information. As the CEO said: "Every dollar paid out is a signal that the company must change." As these system failures were found and corrected, costs dropped to modest levels, clients became delighted at the service, employees took pleasure in their work and were better paid, sales increased, and profits doubled.