We started out in Dallas, TX with a visit to Southwest Airlines – this business has won every award there is for service, business savvy, outstanding company culture and safety. Operating in one of the world’s most regulated, lowest margin industries, they have set the standards for customer service and sustaining a ‘great place to work’ culture. They remain the only airline never to have made a loss or laid anyone off!
Throughout the visit (which included sitting in on their weekly new employee induction session which was great) the recurring theme was that their biggest differentiator was their people. They spent a huge amount of time on the hiring process (last year they had over 200k people apply for just 4k jobs) and they had high morale and engagement and consequently high productivity and business performance – not rocket science!
Phrase of the day – ‘hire slowly, fire quickly’
The three dimensions by which each employee stands by at Southwest are having, i) a warrior spirit, ii) a servant’s heart and iii) a fun loving attitude.
We spent our second day in San Francisco with The Ritz-Carlton Hotel Company as our hosts – their motto for their employees – ‘ladies and gentlemen serving ladies and gentlemen’. Purely by coincidence our CFO from Bupa, Evelyn Bourke, was able to join us for this part of our tour as she was in the city for an actuarial conference (she jumped at the chance to join us funnily enough).
The Ritz-Carlton group leads the ultra-competitive luxury hospitality market with a remarkable 40% market share and has received all the major awards the hospitality industry and leading consumer organisations can bestow.
In an industry renowned for low morale, poor pay and high turnover we learned how they inspire their people, bring their vision to life and WOW their customers. As their president, Sue Stephenson, told us, their customers in the phrase of the day ‘remember the touchpoints, not the fixtures and fittings’.
They quoted a good piece of research, from the US, that categorised employees into three groupings (with the common percentages in brackets); the first category was the ‘Superstars’ (30%) – you all know who these people are – the absolute gold dust that you try and keep and cherish at all costs; the second category are the ‘Just There’ (52%) – these folk clock in, do a good job and clock off at the end of the day – no harm in that at all; the final category are the ones to look out for though, these are the ‘CAVEs’ (18%) – CAVE stands for ‘Continuously Against Virtually Everything’ – admit it, we’ve all worked with a CAVE at some point – question is, are you working with any now!!
The first of three days in ‘the Valley’ – Silicon Valley – and we start out at Palo Alto at the HQ of Google, one of the world’s most iconic companies – #1 in Fortune Magazine’s prestigious ‘100 best companies to work for’ and one of America’s most in-demand companies for top talent. The business founded by Larry Page and Sergey Brin in a garage rented out by Susan Wojcicki (now CEO of YouTube) now has revenues of $60BN – awesome (as the locals say, often).
We had a range of talks with a range of people across this amazing business; their People Director was adamant that you should NEVER compromise on a hire – if in any doubt they are probably not right. You can’t hire as an individual at Google – each hire is done by consensus, with a minimum of FOUR interviews for EVERY post, usually involving interviews by a superior, a peer and a member of the team (if applicable); each potential recruit has a dossier produced (min 20 pages) which is then reviewed by a further recruitment team of management. FINALLY, if that wasn’t enough, every, EVERY potential hire is reviewed and approved by Larry Page – talk about ‘hire slowly’…
The four key things they (Google) look at for new recruits are (i) their general ‘smarts’ – not the PhDs/MBAs and medals they have but is the recruit wised up and a ‘smart’ cookie; (ii) their ‘leadership’ – have they shown risk-taking, triumph over adversity, guts, have they made something happen; (iii) their role-related knowledge – can’t get away from this one – do they have the technical skills for the job; (iv) finally, their ‘Googliness’ – what are the value systems of the person; do the do they do things for others; do they have authenticity, integrity; are they a team player – anyone that asks, at the end of the interview (and people have) about pay/bonus/office, are immediately removed from consideration.
Internally they try and have as few ‘corporate policies’ as possible (their view being that most corporate policies are only in place in most companies for the ‘naughty 2%’ – love it); they massively major, though, on policies around recruitment (no kidding – see previous paragraphs) and performance management – they are very performance driven but do try to operate a ‘fear-free’ environment – people are rated, quarterly (eek!), and those in the bottom 5% get special attention (seen as a failure of the recruitment process not the individual) and, with careful management and so on, 96% never return to the bottom 5%.
Aside from all the sexy new stuff we learned from a session with ‘Google X’ – the ‘moonshot’ lab area sponsored by Sergey – all about ideas such as high altitude balloons providing internet connectivity to far flung parts of the globe, driverless cars, air-borne wind turbines tethered to the ground, smart contact lens that monitor glucose levels – the best presentation came from Alberto Savoia, one of the early employees, who talked about a concept called ‘pretotyping’ which he devised – it is fantastic – I think we, in Bupa, can use this in everything we do! He gave me my phrase for the day too – ‘Make sure you are building the right ‘it’, before you build ‘it”. The concept is predicated on thinking and innovating like a ‘start-up’ but going to market like a ‘grown-up’.
The pretotyping manifesto is as follows:
- innovators beat ideas
- pretotypes beat productypes
- data beats opinions
- doing beats talking
- simple beats complex
- now beats later
- commitment beats committees.
Day 4 and we’re off to LinkedIn, again in the Valley, and one of most successful IPOs in recent times, they have revolutionised the recruitment industry. With over half the world’s professionals on their site (c.300M) their mission is to help the world’s professionals stay productive and successful.
They talked about a re-combination of ideas. LinkedIn was not born from an a-ha light bulb moment but rather from different ideas picked up from the founders’ experience in other businesses (including a dating site).
Phrase of the day – ‘Hire great people and get out of their way’
We met with one of the co-founders of LinkedIn, Allen Blue, who told us “Providing economic opportunity is the most powerful thing we can offer. It’s how we can help change the world”.
Interestingly, LinkedIn have monthly ‘hack days’ when EVERY employee in the company has to go and work with a different team.
In the afternoon of Day 4 we visited IDEO – the innovation engine behind some of the world’s biggest brands and regularly cited as one of the most innovative companies in the world; their repertoire includes the Apple mouse, the first laptop computer, the Polaroid iZone instant camera, the Palm V, the soft-handled gripper toothbrush (Oral B), and millions of other things.
Empathy is a core feature of IDEO’s design thinking philosophy and every IDEO project will begin with the project team observing people in their home environments, the company believes this is the only way to gather accurate insights about people.
We also learnt about the importance of “squinting” – good leaders don’t kill half-baked ideas. Tom Kelley at IDEO talked about the importance of giving ideas the time and space to grow. He described this as squinting – being comfortable with only seeing the rough outline of an idea and not dismissing ideas that are not yet fully-formed.
Finally, on our last day, we spent a day in Silicon Valley, hosted by Andreessen Horowitz, the hottest VC firm in the valley, and met with a range of the leading designers, venture capitalists, marketeers, innovators, entrepreneurs and commentators who all act to keep the Valley at the leading edge of innovation and the digital revolution.
The sheer number of start-ups here is amazing, Silicon Valley Bank fund c.3500-4000 per annum and the top 15 start-ups making, in total, 90% of the revenue generated!
It has never been cheaper to start a company; the ability to build/scale products has increased tenfold in the past couple of years (with open APIs there is no need to recreate/rewrite code); and the overall market size has massively increased (there are 2.5BN of the world’s population on high speed internet).
The over-whelming and over-riding theme from all these folk was to take risks, fail fast and GSD! (the G stands for ‘get’ and the D stands for ‘done’ – if I were to be polite the S stands for ‘stuff’).
Phrase of the day – ‘The ‘perfect’ is the enemy of the ‘good’.
Define, refine and scale – don’t scale too quickly just get to the minimum possible thing you can get then test it.
There were a number of consistent themes throughout the visit; it’s all about the people at the end of the day – there literally is a ‘war for talent’ – each of the big tech giants (Google, Facebook, Yahoo, LinkedIn, Apple and so on) provide free coach travel for their employees to the Valley from the city (San Francisco); interestingly, rental values have shot up 60-70% in the neighbourhoods in SF where the coaches stop (literally in the houses by the bus-stops) – leading to unscrupulous landlords evicting existing tenants for higher rent-paying tech folk – leading to the coaches being regularly bricked and attacked – leading to the need for armed security staff to man all of the coaches – talk about unintended consequences…
Once at work, employees are ‘indulged’ with free food, a range of free restaurants, free bikes between campuses (it is like an enormous university so ‘campus’ is an apt description – bear in mind Silicon Valley companies cream off the absolute cream of the graduate population (mostly PhDs) – they start on six-figure salaries (USD) and they aim to retain them at all costs – travelling to work on a competitors ‘coach’ is strictly taboo), pool tables, table tennis, basketball courts, five-a-side pitches, gyms (of course), pools – the list goes on.
In Southwest Airlines, remember them from Day 1, they have a team (5 FTE) called “mommas and poppas” (we are in the US after all) who recognise employees anniversaries, birthdays, children’s ages, acknowledge bereavements and so on and send personalised messages. In The Ritz-Carlton, employees are encourage to send personalised ‘thank yous’ to fellow employees as a recognition of something special they’ve done to help someone (whether internal or external) – I had the chance to mingle with employees of both businesses and these touches really do matter and impact to people.
After the employees love working here theme (sound familiar?) the next area would be ‘innovation’ – in many respects this can be a tarnished area but it absolutely shouldn’t be – nor should we be thinking about creating innovation departments or chief innovation officers or anything like that either. Simply put, innovation should permeate throughout any organisation – it should be encouraged, rewarded (what get’s rewarded get’s done!), and actively applauded. Whatever we do, wherever we operate we should be creating the landscape for our people to speak out, to offer opinion, to offer up ideas, to have a view – LinkedIn have an ‘incubator’ scheme every three months – feed in ideas, their people vote on their favourite idea, the most popular gets resources and worked on – simple!
So, if anyone’s made it this far, getting the right people (and taking your time to get them) and giving them the space to do what they do best, anchor around WOWing the customer, promoting innovation – what could be easier! It’s a challenge (opportunity!!) a lot of businesses are facing – let’s take up the cudgels – we can do it!!
Steve Horton, Transformation & Business Services Director, International Development Markets, Bupa
Participant on Wavelength USA 2014
STEVE ON BUPA
At the start of the week, on the Sunday, each business represented (attending the programme) had to talk about their own company’s vision and mission – having Bupa 2020 so clearly articulated gave me a huge sense of pride and, in the delivery, allowed me to demonstrate, genuinely who Bupa are for people who either had incorrect pre-conceptions, or more commonly, little or no knowledge of who we are – affordable, accessible health and wellbeing to millions of people around the world – it doesn’t get much better than that.