S4e9 The People Before Profits Edition with Annette Franz

James Nathan  00:54

Hello, and welcome to The Only One Business Show with me your host James Nathan, and I have a fabulous guest for you today. She has over 30 years experience in the customer experience profession, is founder and CEO of CX Journey Inc, and is an internationally recognised customer experience thought leader, coach, keynote speaker, and author of Customer Understanding: Three Ways to Put the Customer in Customer Experience (and at the Heart of Your Business). And, and this is the new one Built to Win: Designing a Customer-Centric Culture That Drives Value for Your Business. She’s a certified customer experience professional, and an official member of the Forbes Coaches Council. Please welcome Annette Franz. Annette Hi, how are you?

 

Annette Franz  01:38

I’m good. Thank you so much for having me. How are you today?

 

James Nathan  01:41

Oh, I’m fabulous. Thank you. And we’ve got the sun out here. So I can pretend I’m in SoCal, with you.

 

Annette Franz  01:47

Yeah. And it’s not even sunny here right now.

 

James Nathan  01:49

Oh, that’s good to know. It’s so lovely of you to take some time to chat to me, so thank you. Thank you so much for doing that. And yeah, even in our little preamble there. Before we went on line, there’s so many questions I have for you. And so excited to kind of get to the heart of your thoughts and understanding. Because you started your CX journey a long time ago, didn’t you?

 

Annette Franz  02:14

I did. Yeah, you know, I’ve been in this career, this profession for 30 years, I started at JD Power and Associates back in 1992. We didn’t even call it customer experience back then. We talked about customer satisfaction and customer loyalty back then. But yeah, you know, I’ve seen I’ve seen that evolve over the last 30 years. And it’s interesting to see where we are today versus back then. So a lot more, a lot more…..It feels like anyways, a lot more interest in what what it is and what it means for the business.

 

James Nathan  02:44

And JD Power, and forgiven me if I’m wrong but that’s about how people feel about the purchase they’ve made and the business they work with.

 

Annette Franz  02:51

Yeah, I mean, we did both syndicated research and then and then custom, you know, custom to the client research and it was really about the…. they’d have their different indexes where it’s you know, post purchase its service, it’s, you know, satisfaction with the, with the product or the service or whatever. So, yeah, and a whole host of, whole host of products but the big focus back then was on the in the automotive industry but when I joined that involved and I was actually part of the non automotive part/

 

James Nathan  03:25

Yeah, cuz when you say JD Power to me, I think Oh, right. Well, who’s who’s enjoying their Toyota? And you know, built a great name with that, but you also with fidelity and Mattel as well, weren’t you?

 

Annette Franz  03:35

That’s correct. Yeah, I was, I was.

 

James Nathan  03:37

Mattel must have been a fun place to be.

 

Annette Franz  03:39

It was a fun place to be. But I, you know, after five years at JD Power Associates, I went to Mattel. And I was, like, you know, like, I need to get over on the other side, I need to get to the client side and do some interesting things. And it was, it was a lot of fun, because we spent a lot of time with kids and researching how they play and what they, you know, why they play and all of that, but it was right at the cusp of, of the internet, right. And I had ideas, I had ideas, and how we could do things differently, especially the research that we were doing and how we could interact and engage with kids differently. And, you know, back back then they were like, well, you know, we’ve always done things this way. We’ve done done it like this for last 40 years. We’re not going to change right now. And you know, it’s like, well, that’s no fun.

 

James Nathan  04:29

Yeah, the most dangerous words in business, aren’t they? This is how we do things here.

 

Annette Franz  04:32

Exactly. Exactly. And you know, sadly they’ve had a pretty rough rough ride, rough road over the years as well, so….

 

James Nathan  04:41

which is a shame because it you know, a lot of these businesses I guess there’s a lot we can name aren’t there where they’ve had a really great product for a very long time and, you know, put their head in the sand when the internet appeared and thought, well, you know, that’s going to be a passing fad. Yeah, really interesting passing fad that’s actually the core of our lives and the only reason you and I can talk now. So what were the things that you were thinking back then what? How were you thinking about things changing?

 

Annette Franz  05:09

Well, the interesting thing was, and I talk about this a lot is is, and it’s such a hot topic right now, too is, for me, it was really…. I remember having conversations constantly with clients saying, hey, you know, this is great that we’re listening to customers, we should be listening to employees too. And, and the constant response from clients was, yeah, that’s fine. But we’re gonna, you know, we’re gonna, we’re gonna focus on customers right now. We’ll listen to employees later, you know, and here we are, it’s later. It’s later and we’ve got the little bit of a mess that we’ve got right now with employees and the employee experience. So there’s that so….

 

James Nathan  05:51

well, there’s such a strong link isn’t there between how we treat our customers? Sorry, how we treat our employees and how they then go on to treat our customers and our clients?

 

Annette Franz  05:59

Absolutely, absolutely. Yeah.

 

James Nathan  06:02

So what what’s changing still, what do you see the the movements with all of this to be next?

 

Annette Franz  06:09

Well, it’s really interesting, because I… there’s still so many things that are the same, I think, I think there’s still more things the same than have changed. Yes, there are some, you know, bells and whistles and shiny objects. And, you know, we’ve got, you know, the AI and we’ve got, you know, all of these, you know, hot topics and trends, that companies that get it and have been doing things right, all along, I can focus on, but most companies are still in that stage where it’s like, okay, we’ve got to really understand what the fundamentals are, what’s the foundation of this work? How do we? Or why is it even important? You know, you, you mentioned my two books, and in both books, and the the very last chapter is, in both books I wrote, they’re similar, but not the same, but letters to the CEO. Really about, you know, hey, listen, if you’re still, if you’re struggling with why we should focus on the customer, and why we should focus on the customer experience, here’s a, here’s a few doses of reality, you know, and so that I think that’s still a big challenge for many companies today.

 

James Nathan  07:18

Why is it though?

 

Annette Franz  07:21

You know, I think what what ended up happening, and this is a, this is a controversial comment, that’ll make after I give a little bit of background, and this, I think that what has happened is in business school, and back in the day, you know, there was that management adage, that was, you know, we’re in business to maximise shareholder value. But the problem is, is that shareholder value is an outcome. What are your means to get there, you know, and you can’t just skip over the means, and think that the outcome is going to happen on its own or, or whatever. And so, I think, you know, a lot of leaders from the past have still have that mindset. And I’ve said a couple times, over the years, maybe it’s time to swap out the leaders, right? Because, you know, it’s, it’s, maybe it’s time for some fresh blood and some fresh thinking. And so it’s probably time, and some business schools do teach it. But it’s definitely time to get in there and change up the leadership courses. And, you know, business classes in general, to incorporate more of this notion of leaders need to care for their people and people first, and customers first and take care of your employees. And you know, those kinds of things. I haven’t been I haven’t been in school in a few years. So I don’t know what they’re teaching in business school today. But I’m just saying if they’re not they need to be, right?

 

James Nathan  08:42

Yeah, I mean, I think that, certainly from the conversations I’ve had with people who have come out of MBA programmes recently, that they are moving and changing. But there’s still a lot of the, you know, the standard stuff, which I guess there needs to be in the beginning. But how we design a business from the ground up to be properly customer, truly customer focused not even properly customer focus is a different thing. Because…..Well, here’s, here’s an interesting question, because we were talking before we went on air about the difference in definitions of service and experience. How would you describe customer experience? What is it?

 

Annette Franz  09:20

I define it as the sum of all the interactions that a customer has with a brand over the life of the relationship with the brand, and then and then more importantly, the feelings, the emotions and the perceptions about those interactions, right. So that’s, that’s how I define it.

 

James Nathan  09:35

Okay, and so I walk into a shop, I’ve decided I’m going to buy a new pair of headphones, and I walk in there and everyone ignores me. And I go and ask for attention and everyone ignores me and I walk out. And then I go and tell everybody, I know how terrible they were. And I go and buy it from another shop where I walk in and someone says, Hey, how can I help you today? I’m looking for some headphones. What sort of music do you like listen to? Have you got your phone there, let’s Bluetooth it over. And the whole thing is very different. Yeah. Is that training? Or is that recruitment? Or why is it that some, some stores are so, so good? And some stores are so, so terrible?

 

Annette Franz  10:10

Yeah, again it goes back to, you know, those fundamentals and the foundation and then leadership talking about there’s, there’s an interesting way of thinking about this. So you have to be careful what you incentivise, right? If you incentivise selling, and sell more and sell more and do more, that’s what that’s where your people are going to focus. But if you incentivise on, hey, we’re going to take care of our customers and the behaviours around making sure that the customer is satisfied, and they got everything that they need, and they’re having a great experience, then that’s what your employees are gonna focus on. So I think it’s, I think it’s a combination of a few different things. It’s leadership, it’s hiring the right people for your culture, and the way that you want to run your business. And it’s definitely the culture, right, it is definitely the culture, if you have a customer centric culture, where your core values support that type of culture. Your employees and your employees are living and breathing and you’re in leaders are modelling and reinforcing and recognising and doing all of that, then you’re going to you’re going to, you get the culture you design, right, or the one you allow, and so I think that’s, that’s a, that’s a big thing there.

 

James Nathan  11:17

But culture is a difficult thing, because it changes or if I’m, if I’m the new CEO of James Coe, and I inherit the… well, I inherit the culture that’s there. And I have my own opinion of or ideas about how I want to change that culture to drive it into become a customer centric culture. Yeah, where do you start?

 

Annette Franz  11:38

So it’s, it really is around. So culture is core values plus behaviours, right? So you have to, you have to have your core values defined, they can’t just be posters on a wall. So they have to be social and they have to be socialised and operational, socialised and operationalise. In order to do that, to start, you have to define the behaviours, what’s acceptable, and what’s not acceptable when it comes to each one of those core values. So you’ve, you’ve got to communicate that you’ve got to share that out, you’ve got to help people understand what that means you have to as leaders, you’ve got to model that and recognise when people are, you know, behaving in line with, with those core values. And then you have to operationalise, right, so that’s part of the reinforcement to right. So you hire you fire, you promote based on those core values, that you’re hiring, for culture fit, you’re promoting, because people are living and breathing those values and, and, you know, firing if they’re not, right. And you have to, you have to use those core values as the lens through which you design policies, processes, you make decisions, all of those kinds of things. I’m simplifying it, but that’s really where it starts. Right. And, and you have to, you have to educate employees, I mean, going back to socialising, it really is about helping them understand. What, what are those core values? And what do they mean? And what do they mean for me? And what do they mean for the business and how I interact with other employees and how I interact with my customers, you know, those kinds of things?

 

James Nathan  13:16

I laughed when you say that they’re not just posters on the wall, because you and I and everyone else listening, we go to companies all the time. And there on the wall is the vision statement. And there on the wall are the core values, and they are so bland most of the time. And you know, if, if vision is supposed to be well, inspirational anyway, most of the vision statements I read certainly not. But those core values do look like they’ve just been dreamt up by people who think, Well, they’d be good core values, rather than what would at what actually are the core values of this business? You know, I rabbit on all the time Annette about, you know, hiring complementary core values for a business. When we look at bringing people in, how do we find… How do we understand the core values of our business? And then we how do we hire people who have complementary core values? Not necessarily identical core values, and, and people look at me as if I’m crazy. But you’re, you’re saying that’s the starting point?

 

Annette Franz  14:16

Yeah. Yeah, that is the starting point. Absolutely.

 

James Nathan  14:19

So how do you work them out? How do you decide what they are? Understand what they are?

 

Annette Franz  14:24

The core values? So often starts with the leadership team sitting down and saying exactly what you just said, Who are we as a business? What are our core values, but it it really has a lot to do with personally too? What are your personal core values? And how do those translate to the business so So oftentimes, we sit down with the leaders and we sit down, you know, and talk about their core values and how those translate to the business and if there are others that they would like to see within the business and then also thinking about the type of culture that you want. So if you want a customer centric culture Then you want to have a core value that aligns with your supports that or you get when you go into the definitions of those core values and the behaviours, you make sure that they revolve around putting the customer at the heart of everything you do. But then from there, the next thing you want to do is bring in a group of employees and sort of test, test them out with the employees and, and get their thoughts and their feedback on it as well. So there’s a whole process that we go through to get that done. And we don’t want to just do it in a vacuum, we want to make sure that there’s involvement from the employees, because one of the things that ends up happening is that we, if we force things on employees, if we don’t, it’s sort of CX 101, if we don’t listen to them, if we don’t, if we don’t take the time to understand them, and what’s important to them, what matters to them, and how these core values make sense to them, then, you know, then we were forcing these things on them. And we really get more with….. how’s the same go, you get more with honey than with vinegar,

 

James Nathan  14:24

More flies with honey than you do with a swat…

 

Annette Franz  15:07

You want to you want them to be feel like they’ve been a part of it, right? And they have part of it. So and that makes it a lot easier to get adoption and get people engaged? And all that.

 

James Nathan  16:18

And certainly I know, well, I’ve just thinking while you’re speaking and saying, Well, you know, in my head, I started new business today, that’s easy. I can design it from the ground up, however I want it to be it will change and things will be right and things will be wrong. But we can start with the plan. When we’ve got a business, you know, like Mattel? That’s quite an interesting one. That example, who which is a board game company really at its heart? How do we adjust the culture in a business that’s so old and so ingrained? In it, it’s a long term problem, isn’t it?

 

Annette Franz  16:53

It’s a much heavier lift for those businesses than it is for a startup or a, you know, a younger company, you know, I work with a couple of clients that are between, you know, five and 10 years old, and going through some culture change there. And it’s yes, it’s much easier in those early stages than than it is when you’ve got you know, 30,000 employees, and you’ve been around and and then as we said earlier, but that’s how we’ve always done things, right, you know, when you have that sort of mindset and sentiment, but it can be done, but it is a longer, it is a longer game there. And it’s also, yeah, it’s you’re gonna go through the same process, but it’s going to be in chunks, right, you know, the chunks… I mean, it’s going to probably be one division, and then another division and those kinds of things. And the leaders play such a huge role in this I won’t even under state the importance of the role of the leaders and how they need to talk about it. They need to, they need to, you know, talk the talk and walk the walk. And it’s so important. It is a longer it is a longer play, though, when it’s a large organisation

 

James Nathan  17:58

I need to embody that change during though

 

Annette Franz  18:00

Absolutely, absolutely.

 

James Nathan  18:02

It’s, there’s a there’s a very famous athletics coach here called Frank Dick. He was the the GB Olympic coach for a long time, and some very famous people tried under him. And his lovely quote from him, which I always think of when people talk like this, which says something along the lines of get the basics, right, or you’ll spend a lifetime putting them right. If we put these things in place to start, we get them lined up, then it’s great, but effecting change when it’s already bad. Really tough. So who’s, who’s doing really great things at the moment, Annette? When you look out into the your client base, or perhaps other businesses that you interact with? Who’s really getting the customer experience right?

 

Annette Franz  18:45

Well, that’s a good question. Because, because it’s a mess right now, you know, if you think about it, you know, it’s so funny, because a couple weeks ago, I was speaking at an event, and I and I, leading up to that event, all I heard from friends on social media everywhere was this happened and that happened, or that was the worst experience. And so I had asked the audience, I had asked the audience to like, how many of you have had more good experiences than bad in the last month or two and very few hands went up, like everybody has had more bad experiences, and it’s really is a struggle, and it really is a proof of that connection between the employee experience and the customer experience, because a lot of the things that are happening right now, a lot of the issues are a result of, you know, what, what we’re seeing with whatever we’re calling it today, the great resignation, right. And, and that push by employees to work under better conditions. You know, I think, I think that’s really what they’re looking for in a in a sort of raw kind of way. But so it’s a challenge right now. But you know, airlines if… when we think about airlines, and that’s such a mess right now to the whole travel nothing but Delta Airlines has always been really… Not always, but certainly of late, you know, the last 10 years, 15 years has been a standout when it comes to the customer choice and the employee experience. I, you know, I always talk about Target. Target has, you know, a lot of companies really, during the pandemic, especially, you know, by late 2020, they were, they had adapted, you know, they’ve gone through a digital transformation. And if they did it right, the experience was really good. And target was one of them. Now, they, you know, their whole app, website, the curbside pickup, the, you know, or the drive up all of that they just made that so easy. So anytime I see anybody who communicates well is proactive makes the experience easy. I’m all about that. Right. So there’s, there we saw some of that, but yeah, I struggle today. When people ask me, tell me about your last good experience, and I struggle because it’s been a while and everything is really challenging right now. You know, even yesterday, I just, I had an issue with a credit card, the credit, the credit card company, kept sending me emails and saying activate your card, activate your card, and I’m like, I didn’t get my card? So I called them. And they said, Oh, we don’t have an account for you here. Because I guess what ended up happening is one bank had sold all the, you know, sold all the cards, and obviously card members to another bank. And I got lost somewhere in the translation. And, and my account was closed back in January, which I didn’t even know. Wow. Okay. So they’re, you know, so it’s like, so then they’re like, Well, you need to call the other bank, and I call the other bank. And they’re like, well, we closed your account at the end of January. And I was like, really? I didn’t know that. And there’s a card that I don’t use very often. And I say, okay, now that I said, but why does the other bank have my information? If my account was closed? You know, this is six months later, why do you why are they emailing me to say? So it was just, it was, it was a little messy. And I don’t feel like I got as far as I know, a card may show up in a month or two. I don’t I don’t really know. It was not very clear to me. What…. I took down everybody’s names and numbers.

 

James Nathan  22:27

It’s so hard to shut a bank account if you want to.

 

Annette Franz  22:31

I know I was like, you have to a letter you gotta get it notarised. You gotta like yeah, exactly.

 

James Nathan  22:36

Yeah, yeah, absolutely. I mean, I know when I changed when I changed my company structure last year and, and changed banks. Goodness me were to carry on that was all I had to do was wait and wait for your experience, it would be done for me, it would have been quite alright. It’s a shame what you’re saying, though, because you know that the great resignation phenomenon is very much an American thing. There’s some ripples of that elsewhere. But, you know, the world is, is rebuilding itself in lots of ways. And now, I mean, I just… now is the time to look after people, now’s the time to really get on board with how do we look after people even better than we did before? How do we make sure that, you know, they come to us, especially in the internet world, where everything’s a click away? How do they come to us first, how do we get them to, to think of us and those little experiences are not hard to put together? You know, really not hard to put together. But yeah, it’s a shame because I mean, I have a very positive outlook on the world. And I like to see the good in, certainly in business and try to understand what we can highlight to learn from the good you know, when people do great things, when they do bad things, you know, my instinct is very much to firstly complain which embarrasses my wife because she’s very English and I’m not. And the second is to is to just not go back. You know? And if someone says, What did you think of that place? You’ll go, really wouldn’t touch them. You know, and that’s… now’s not the time for that is it? Now’s the time to, to change things. Talk to me about your new book Built to Win? How did how did it come about? When did you start writing it? And why should we all go and buy it?

 

Annette Franz  24:20

Yeah, sure. So last, last year, in April of 2021, Advantage Forbes Books had reached out to me and said, hey, you want to publish your next book with the publisher and I had already been hemming and hawing and not wasn’t sure if or when I was going to do my next book. And so we had some good conversations. And by the end of May, I had signed the contract and had 122 days to write the book. The manuscript was due at the end of September of the busiest, busiest year, the business summer I’ve ever had with my business and so so it was, it was an interesting summer. That’s for sure. But I wrote the book because, you know, the content, the contents of the book, it’s basically the 10 foundational principles of customer centric culture, and I had been speaking about them a lot, actually, I’ve only had eight when I was speaking. And I corrected that in the book and added to others that were really, really important. But I had been talking about cuz, you know, the foundational principles a lot, and it resonated with people, everybody just, I just was continuously getting great feedback about that. And one of the things that I had learned was that people don’t really know what it means to be customer centric. So that was the first first reason that I wrote the book. Because, you know, I would see things like, Oh, we send out customer centric messages, or we have a customer centric leader, or we have a customer centric department. And it’s really not a message or a person or department. It’s, it flows through the DNA of your organisation, right? It’s enterprise wide. It’s everything you do. And so. So it was that. And then the second reason that I wrote it is because I really wanted to inspire leaders to think differently about how a. think differently about what it means to be customer centric, but also to think differently about how to design a culture that really does put people first, you know, a customer centric culture is one where we put people first because we know the employee experience drives customer experience. And, and so we need to put our people first always, and so that was that was really the gist behind it. And so, yeah, so the 10 foundational principles are really the reason people should read the book, right? Because it’s… let’s help people really understand all that is involved in being customer centric. It’s not just, you know, being good to the person in front of you, it’s so much more and like I said, it’s, it’s it flows through the veins of the organisation. And it’s, it’s, it’s not an easy lift, right, it’s a heavier lift, to make that transition.

 

James Nathan  26:58

So give us a little taster. Maybe talk about one or two of those principles…

 

Annette Franz  27:04

Sure. Sure. Well, I’ve talked about a couple of things are ready because in the course of our conversation, I you know, talked about the importance of culture as the foundation of the organisation and the importance of leaders and their roles in the business, we’ve talked about employees and putting in the employee experience and putting employees more first because we know that they drive. So I’ll talk about three, I’ll just mention three that we haven’t talked about people come before products, people gone before profits, and people come before metrics. Maybe we did talk a little bit about the products and the profit, or I’m sorry, the profits and the metrics when we talked about maximising shareholder value and not being an outcome. But, but those are, I think those are really important. It’s it, you know, if we put people before products, that really means that we’re a good example of that is, you know, I have a lot of startup tech companies that will come to me and say, hey, I want to show you what we’re doing. And we got some new customer experience tag or whatever, you know. And the first question I’ll ask them is, what problem does it solve for your customers? Oh, that’s a really good question. I don’t know. You know, and so that means that they haven’t put the… Seth Godin says they have found, they’re finding customers for their products. They’re not finding products for the customers, right? We need to we need to make sure that we’re always solving problems for our customers. Because why would they need your product? If it’s not going to help them do something, right?

 

James Nathan  28:33

There is so much that isn’t there. If you watch, you know, it’s called Dragon’s Den here, and it’s called Shark Tank there. These guys rock up with a new product. And you look at it and think, what’s the point of it? It’s really cool. But why would I want it? And that’s not that’s not reserved just for Shark Tank? That’s for sure.

 

Annette Franz  28:51

Yeah, agreed. Agree. So we see that a lot. Yeah.

 

James Nathan  28:56

So when we’re thinking about things, if I was your listeners out there today, listening to you talking and thinking this sounds really interesting, actually, I want to start looking at what I’m doing. I think we need to take a step back and just maybe redefine or readdress the way we are working today. What will be the one thing what would be the big golden nugget from you? Annette, something that they can do today to make their business better for today and better for the years to come? What would that be?

 

Annette Franz  29:22

Yeah, I’ll go back to your core values. I think that’s such an important place to start. Everything stems from there, right? When we talk about culture, culture is how we do things around here. It’s what everybody does when nobody else is looking right? You know, and so if we have those core values defined, go look at your core values. Are they are they just posters on a wall? Or have you socialised and operationalized. They’re such an important part or foundation to your business. That… That would be the one place that I would tell people to to get started. Is there absolutely

 

James Nathan  29:59

Annette, fantastic. That’s a really great place to wind up. And thank you so, so much for all your thoughts and all your time.

 

Annette Franz  30:05

Thank you so much for having me. Appreciate it.

 

James Nathan  30:07

Real pleasure.