The Clean and Green Club

Guest post by Dave Esler and Myra Kruger

[Editor’s Note: I review Esler and Kruger’s book as this month’s Recommended Book, elsewhere in this newsletter. –Shel Horowitz]

Our new book, The Pursuit of Something Better, tells the unlikely story of how a little-known, mid-sized wireless carrier – U.S. Cellular – transformed itself into a competitive terror admired by customers, employees, and investors alike on a platform of values.  In an industry not known for its high ethical standards, U.S. Cellular made ethics its calling card; over the past nine years, at a time when much of American industry was in a profits-at-any-cost mode that would ultimately prove disastrous, this company has demonstrated that acting ethically can be a powerful competitive advantage.

It wasn’t easy – but U.S. Cellular’s experience shows that any company with the will and the heart can become an ethical icon.  The story began in 2000, when Jack Rooney became its CEO.  Rooney believed that both employees and customers would respond to a platform of simple (but rarely experienced in business) values like customer focus, pride, respect, diversity, empowerment – and ethics.  His company was initially skeptical – that wasn’t how successful businesses normally operated.  Rooney was immovable, and gradually, through three distinct stages, moved his 9,000-employee organization onto a whole new plane.

The first stage was to insist that the organization “just do it,” with zero tolerance for those who would not comply.  That made for some painful moments, but within a year or two, it also led to some eye-opening discoveries:

• Customers liked dealing with a company where they didn’t have to watch their backs, where they could be confident that the company really did have their best interests at heart; their compliments confirmed for skeptical sales people that an ethical approach just might work.
• Sales and service associates realized how much easier it was working in an environment where they could just tell the truth.  Lying to customers is complicated and can come back to bite; being straightforward is far less stressful and allows them to go home with a clear conscience.
• Employees throughout the company learned what a pleasure work could be when they didn’t have to worry about internal back-stabbing or political maneuvering; their leaders found out how much more effective teams could be when there were no ulterior motives to deal with.

A few years later, U.S. Cellular had moved into stage two of this transformation, when its high ethical standards had become a self-conscious point of pride.  Its employees were very aware that their company was different than most – and they took great joy and comfort from that knowledge.  They started to describe the behavior of their executives and colleagues as “impeccable,” and to refer to their company as “the most ethical in America” — and they understood the importance of maintaining that reputation.  As an engineer wrote on one of U.S. Cellular’s annual surveys of the state of its culture, “One of these days a cell phone company is going to get popped for cooking the books.  It won’t be us.”

The final phase of this process was the gradual expansion of the meaning of the ethics value from not doing something wrong – breaking a law or violating a company rule or standard – to a much broader expectation of “doing the right thing” under any circumstances.  By then, company accountants were marveling that executives always seemed to choose “the right thing ahead of the business thing” – although by then, it was becoming hard to tell the two apart.

For example:  a company service rep was caught making a change to the account of a friend, an ethical no-no.  The friend happened to be a local public official, and U.S. Cellular was at the time bidding for the city’s wireless business – a fact that the service rep tried to use to evade disciplinary action.  Wouldn’t it just be better for all concerned to sweep the problem under the rug?  Instead, the company called the mayor to explain why it felt compelled to withdraw its bid.  At the same time, the offending employee was terminated for violating the company’s Code of Ethics.  The city was so impressed with the company’s forthrightness that it insisted on doing business with it anyway.  Hundreds of such anecdotes have become part of U.S. Cellular lore.

By last year’s survey, employees were describing how the company’s example was making them better spouses, parents, citizens.  We have read thousands of comments like this:  “I believe I’m becoming a better husband, father, son, brother, and friend because I work here.”  And this:  “I feel a strong internal drive to work hard within this company.  I do not know where my career path will take me, but the values and beliefs of this company inspire me at work and in my personal life every day.”  And this, over and over:  “I am a better person for working here.”

And here’s the best part:  U.S. Cellular is thriving, as the last mid-sized regional carrier left standing in an industry dominated by four national giants.  It has won five J.D. Power Awards in a row for customer satisfaction.  It has been honored as the best place to work in dozens of the states and cities where it operates.  And it has remained profitable through the recession.  The good guys win.  Ethics pays.

Dave Esler and Myra Kruger combined their 30 years of corporate communications, human resources, and consulting experience as Esler Kruger Associates in 1987.  Their consulting firm focuses on culture change, organizational surveys, and executive counsel on effective leadership. They are based in Highland Park, Illinois and can be reached at www.eslerkruger.com

In a business as bureaucratic as the airline industry, Southwest Airlines has always impressed me with its willingness to go against “normal” policy in order to do right by its customers. Not surprisingly, this positive attitude extends to doing right by its employees as well. And was probably one of the factors that led Southwest to maintain profitability–alone among US airlines–in the aftermath of 9/11.

We fly Southwest as often as possible, for a number of reasons:

• The company is very flexible if we need to change our plans; while most airlines simply void an unused ticket, Southwest lets you reschedule the same flight on another day
• It’s often the cheapest or close to cheapest option, and has brought down the cost of flying out of Hartford, our closest airport–before they came in, it was often as much as $600 to get a domestic flight, and we would have to go to New York or Boston to get anything affordable–now we can often find flights out of Hartford on Southwest and other carriers for $200-$300 round trip
• Their best flight attendants actually make it fun to fly again
• Last but certainly not least, when my sixth book, Principled Profit: Marketing That Puts People First came out, the president of Southwest Airlines actually bought 1000 copies, making the book profitable the day it was printed <vbg>

In January, we were booked on an early morning Southwest flight from Hartford to Tampa, where we were supposed to catch a cruise ship. However, due to snow conditions in Hartford, our outbound flight was canceled the previous night, and the next one wouldn’t arrive in Tampa in time to board our ship. Fortunately, we had once again chosen Southwest.

From our hotel room near the Hartford airport, Dina got on the phone with Southwest while I used my laptop to rent a car.

The airline wanted to simply put us on a later flight to Tampa, but we politely and calmly explained that this really wouldn’t help us, since we’d have no way to catch up with our cruise ship. Without a huge amount of fuss, we got switched over to a flight into Fort Lauderdale, and from there, we rented a car and drove four hours the next day to meet our boat at its first port of call, Key West.

This itinerary shift would have been impossible or nearly impossible on most airlines. At Southwest, it was part of the customer satisfaction culture; there wasn’t even an extra charge.

Dina wrote a letter of commendation for the employee who had handled it, and this week we received a wonderful form letter from Southwest, along with a copy of the note from her supervisor thanking the employee directly and enclosing our letter.

Their letter said, in part (capitalization as in original),

Southwest Airlines is foremost a Customer Service Company, and our Employees are trained to always think of our Customers first…There is nothing that could please us more than to know that you and your husband enjoyed a dose of SOUTHWEST SPIRIT from one of our outstanding Employees. It is apparent from our records that you were assisted by Tamika, and am happy to share your kind words with her.

Thank you for sharing your heartfelt compliments with us, and thanks especially for your patronage and friendship. You and your husband are very special to all of us here at Southwest, and we anxiously await our next opportunity to make you smile.

Wow! I don’t think I’ve ever received a letter like that from a major corporation. A generic, bland thank-you, maybe, but nothing like that.

And the letter to the employee said,

I want to take a moment to add my voice to Ms. D. Dina Friedman’s in the interest of giving your outstanding Customer Service skills and SOUTHWEST SPIRIT their due recognition.

Just remember–every one commendation; every one act of kindness; and every one extra effort combine to make Southwest Airlines stand out above the rest. Thank you for being the ONE!

And all three letters (including the one we wrote) were copied to the two senior executives in charge of customer services and support, her team leader, and of course, the commended employee.

What do you think it does for employee loyalty, as well as customer loyalty, to do something very right but extremely out of the ordinary and get a commendation like that, with copies to two of the company’s vice presidents? This is a company that takes seriously its rhetoric of employee empowerment. Behavior that might have gotten her fired elsewhere is rewarded here.

Yes,  I recognize that Southwest is far from a perfect organization. But it stands light-years ahead of so many others in its industry. I’m proud to feature them as the Positive Power Spotlight of the month.