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

The Pursuit of Something Better: How an Underdog Company Defied the Odds, Won Customers’ Hearts, and Grew its Employees Into Better People, by Dave Esler and Myra Kruger (Esler Kruger Associates, 2008)

Can a mediocre company (whose main USP is dominance of markets too small for others to bother with) transform into something truly great? If U.S. Cellular’s experience is any indication, the answer is a very strong yes. It isn’t easy, quick, or cheap–in fact, as of the book’s publication late last year, it had been an ongoing 8-year process–but under the right leadership, in this case, the remarkable CEO Jack Rooney, a squirmy little company with little concern for either its associates, its customers, or its business practices can actually reinvent itself as a highly ethical, customer-focused company that not only makes its employees really proud to work there, but actually begins to make a positive impact in the family and community lives of those employees. It’s not surprising that it now has twice as many associates and three times as many customers (meaning not only is the company growing rapidly, but productivity has also grown; each associate handles more customers)

This is an insider’s story; Esler and Kruger are the culture consultants that Rooney brought in at the start of his tenure, and they’ve played an ongoing role in shaping the transformation. Yet they don’t gloss over the rough stuff, and there’s plenty of it along the way.

But they and Rooney–and thus, U.S. Cellular–drew lines in the sand, fired people who didn’t share the dream, and made it work. In the early years of this decade, U.S. Cellular was widely expected to be swallowed up. Instead, they’ve shored up existing markets, built new ones, won numerous awards both for their customer focus/workplace culture and the reliability of their technology, and are well-prepared to hold their own even in the current recession.

A couple of core principles dominate:

• How comes before what, and nothing is morally neutral: if you get the numbers you want through the wrong methods, it doesn’t count; go back to the drawing board
• Truth is less stressful than deception

A key insight: marketing is important too. In many companies, the grim reality doesn’t match the sunny marketing/advertising/public relations picture, and that’s a problem. At U.S. Cellular, the problem was in the other direction: the company refused to take credit early for what it was accomplishing (Rooney felt they weren’t ready yet), and so the sunny and glorious reality was vastly better than the public picture; the company could have grown faster, perhaps, if their marketing had lived up to their culture. (This is exactly why I show, in my award-winning sixth book Principled Profit, that the ethical and social commitments must be accompanied by effective marketing that harnesses and highlights these achievements.)

A bonus: this is one of the better-written business books I’ve read recently, as you can see from this passage below, at the very conclusion of the book.

Jack Rooney and his slowly-expanding team of believers challenged the long-prevailing assumptions that business is a blood sport, that the advantage inevitably goes to the ruthless and the greedy, that the only way to win is to hold your nose and leave your values at the door He has proven beyond question, once and for all…that a values-based model works, that it can raise both a company and the individuals who are part of it to undreamed-of heights, to peak experiences that will last a lifetime and change the way those lives are lived. He has shown that there is indeed a better way.

Couldn’t have said it better myself.