business Archives - Page 8 of 9 - understand-culture

Harry’s Razors

Harry’s makes shaving equipment for men. Two American MBAs with experience in strategy consulting bought a German manufacturer in Thuringia (Thüringen in former East Germany), founded in 1920. Their goal is to challenge the world’s dominant products.

“Our team in Germany has been grinding high-grade steel into some of the world’s sharpest blades since 1920. Today, more than four hundred German engineers, designers, craftsmen, and production workers build and operate sophisticated, custom equipment that produces millions of precision blades per year. We’re excited to partner with our new team to innovate and continue to make the fine blades you deserve.

Our blades will get even better. Your shave will get even better. We’ll listen to your feedback about what makes a great shave and create products that deliver you that experience. In the end, we hope you’ll enjoy shaving even more.

We spent over a year meticulously crafting our first Harry’s line. Our blades are made by German engineers with decades of experience honing high-grade steel. Our handles were designed to blend timeless simplicity and modern ergonomics. Our shaving cream comes from the same chemists who make creams for high-end brands. The result: a set of modern shaving products made with respect for the tradition of a good, clean shave.”

Quality product combined with respectful marketing.

And John Otto Magee – creator of understand-culture – is a very happy Harry’s Razors customer. So happy that he recommends Harry’s to friends. All the time. Thanks, Harry’s. And special thanks to those great Germans in Thüringen !

United Breaks Guitars

In 2008, United Airlines baggage handlers damaged Dave Carroll’s guitar. After the airline refused to pay to fix the damage to his instrument, he and his band wrote a song called “United Breaks Guitars” and put it on YouTube.

Within two days it had more than 24,000 views (and more than 14 million views by 2015), and it was estimated that the bad press cost United Airlines around $180 million the following year (2009).

This incident also inspired Carroll to co-found Gripevine – a company that helps customers use social media to expose their complaints and convince companies to give better service.

Customer Reviews

Customer reviews can make or break a company in the US. Especially now that the internet gives customers a way to instantly compliment or complain about service (and to make sure that their opinion is available for anyone to see) one good or bad review can drastically change the number of customers a company has.

In 2012, after Brandon Cook from New Hampshire posted a Facebook story about a Panera manager named Sue making a special order of clam chowder for his grandmother and giving her a free box of cookies as well. The restaurant became much more popular. Several people who would not otherwise have eaten at this restaurant went there, and commented about it online. Some of the Facebook comments that people made were:

Cyrus Twirpwhirler: “My family is eating at Panera tonight because of this story. Way to go Sue and Panera! Snow Case: That is so cool, I’m a customer already, but I like them even more now. Daniel Julian: That is so cool!!! Have to visit Panera soon.”

Processes provide clarity

Processes provide clarity. They allow employees to concentrate on core activities. They lead to cost reductions by identifying and eliminating unnecessary work steps. Thinking in terms of processes – how the work should be done – strengthens conscientious work and allows for quality control.

Well documented processes are critical for orienting new employees. Processes make transparent, make understandable, each and every segment of complex work methods. They are the basis for optimization, for reducing mistakes, for root cause analysis of systemic errors. All of these benefits lead to increased product quality. Work processes, however, must be understood and accepted by those doing the actual work.

In Germany it is critical that processes do not take on the character of laws, but instead remain guidelines. German workers expect a certain level of freedom in terms of how they perform their daily tasks. Processes should not become a kind of straightjacket.

How the work is done

Germans are results-driven. The strength of their economy underscores this. For Germans work results and work processes are synonymous, inseparable, integrally linked with each other. Germans focus on the details of how the work is done.

Processes are, therefore, results. They are how the work is done. If something does not function properly, if a product has an imperfection, the Germans analyze rigorously how the work was completed.

All problems, product deficits, signs of diminished quality are from the German perspective a failure in work processes. If something new has been developed, Germans not look first at its benefits for the user, but how it is made. How something is done, processes, craftsmanship, approach is always the focus of Germans.

The Fractal Factory

In 1995 Hans-Jürgen Warnecke, Head of the Fraunhofer Insititute in Munich from 1993 until 2002, published the anthology Aufbruch zum Fraktalen Unternehmen: Praxisbeispiele für neues Denken und Handeln – loosely translated as Breaking out into the Fractal Company: Concrete Examples of New Thinking and Acting.

Warnecke instantly became known in the production world both in Europe and internationally. The book takes a deeper look at manufacturing processes addressing questions such as: On what principle are production processes based? How does change best occur in material flow processes? How can the quality of processes be improved?

Prof. Thomas Bauernhansl from the Institute of Industrial Manufacturing at the University of Stuttgart underscores the ongoing importance of Warnecke’s work:

“The concept of the fractal factory, which Hans-Jürgen Warnecke proposed in the 1990s, remains highly relevant and meaningful today for manufacturing companies. The visionary power of his organizational model can be seen at work in agile and flexible production structures.”

Klaus-Hardy Mühleck, considered one of the top experts among CIOs, stresses time and again the influences of Warnecke on his work.

“Way to go, Sue!”

Customer reviews can make or break a company in the USA. Especially now that the internet gives customers a way to instantly compliment or complain about service (and to make sure that their opinion is available for anyone to see) one good or bad review can drastically change the number of customers a company has.

In 2012, after Brandon Cook from New Hampshire posted a Facebook story about a Panera manager named Sue making a special order of clam chowder for his grandmother (and giving her a free box of cookies as well), the store became much more popular. Several people who would not otherwise have eaten at this restaurant went there, and commented about it online. Some of the Facebook comments that people made were:

Cyrus Twirpwhirler My family is eating at Panera tonight because of this story. Way to go Sue and Panera!

Snow Casey That is so cool, I’m a customer already, but I like them even more now.

Daniel Julian that is so cool!!! Have to visit Panera soon.

Rules of the Game

Those who write the rules of the game, have the best chance of winning the game. Processes – how the work is done – make up the rules of the game. Within companies. Where the product is critical to success. Where “a better mousetrap” really can, for the most part, sell itself.

Let’s march it backwards. Customer. Product. Manufacturing. Product development. Science and engineering. German. The core is science and engineering. In Germany scientists and engineers are king. They enjoy the prestige. Herr Dr. Soandso. Even better, Herr Professor Dr. Soandso.

Let’s march it backwards. Customer. Solution and profitability. Problem and pain. Relationship management. Sales. Marketing. American. The core is understanding the market, maintaining a constant close relationship with the customer, understanding and meeting needs. The customer is king. Those close to the royal court are king-too. They enjoy the prestige. The insider. The trusted.

Germans want to have the say about process, about how the work is done. For them it is make or break, success or failure. It’s the name of the game. Americans are happy to concede it, as long as the Germans concede to them the customer.

Mistaken thinking, or at most half-thinking. On both sides.

Processes and Communication

In the American business context the communication within and during a process is very important. In fact, the forward movement of a process is dependent on communication. Parties involved in the process must remove roadblocks, anticipate slow-downs. The process may not come to a halt.

Constant communication is the prerequisite for quick response time. Constant communication also secures a common understanding of the process’ goals. It motivates. Feedback within the process is given on a regular basis.

Not to be underestimated is also the value of communicating interim results upwards, to those on the next level of management who exert influence on the process in general, and who might also be the recipient of its ultimate results.

Listening to Customers

Many companies implement customer suggestions when those suggestions challenge the company’s core principles. In response to customer suggestions for a less cluttered store, Walmart cut its total inventory by 15% and renovated stores to feel less cluttered. The changes resulted in immediate decreases in sales that totaled $1.85 billion dollars before Walmart reverted to its previous model of a much wider selection of products at low cost.

A leading manufacturer of bathroom fixtures is perhaps the most traditional example of a company that must collaborate with and understand the needs of its customers. It must constantly innovate and improve its products with its current and prospective customers in mind.

To this end, the company says: “To the customer, it can seem like each faucet was made with them in mind. We listen closely to what consumers want and need, invest in extensive research and design, and apply smart technological solutions that really do make our customers’ lives easier.” In other words, the how of their innovation process is largely defined by their customers.

In a major US-based international construction company, each of its projects is unique and requires a high degree of collaboration and dialogue with the customer. According to the company’s website, “We work with our clients as a team. Mutual respect provides the foundation for our success.”

Customers expect companies to listen to their input about how a project should look or be completed and create a plan in line with those expectations. The construction company’s website summarizes this idea by emphasizing the importance of finding solutions to their customers’ demands: “We are proactive in finding solutions for our clients that best achieve their goals.“