In Search of Excellence

Introduction

The speaker introduces the topic of American business and how it has been managed in the past.

The House of Cards

• After World War II, there was a lot of pent-up demand in America.

• Companies could make anything and the American public would buy it.

• Management techniques were developed during this time period, but they were associated with success when it was actually an anomaly.

Crisis in American Business

• Many industries started losing to foreign competition.

• Unless something different happened, the economy was headed downhill fast.

• A 180-degree shift in management thinking was needed.

New Metaphors for Management

• Old metaphors like manager as cop or referee were no longer appropriate.

• New words like cheerleader, coach, facilitator, nurturer of champions are more fitting for excellent companies.

Walt Disney World: An Example of Excellent Business

The speaker discusses how Walt Disney World is an example of excellent business and how they train their employees to be performers.

Satisfying the Customer

• Walt Disney World's main goal is to satisfy its customers by providing entertainment for the whole family.

• They attract people from all over the world with their magic and make-believe.

Training Employees as Performers

• Walt Disney World trains its employees to be performers in a live show.

• Every detail of their training program is designed to create an awareness that Walt Disney World is above all show business.

Creating a Seamless World of Make-Believe

• To sustain a seamless world of make-believe, every employee must be trained to perform at all times.

• On day one as a new hire everyone is required to take traditions one at Walt Disney University.

The Business of Making People Happy

In this section, the speaker explains that Disney's business is to make people happy and that everyone who works at Disney is a cast member responsible for making guests feel welcome and special.

The Role of Cast Members

• All employees are trained to be friendly, polite, courteous, and helpful.

• Everyone is a host or hostess; there are no custodians or cops.

• Cast members work both on stage and off stage.

• Each player's responsibility is to make guests feel welcome and special.

Training for the Show

• New hires go through three days of operations training in the park.

• Rides are called attractions, and scripts are called spiels.

• Everything is scripted to ensure consistency in performance.

• Even pointing the way requires its own kind of training.

Maintaining the Magic

• Clean costumes are issued daily from the largest theatrical wardrobe in the world.

• The park itself is elevated at ground level with a maze of tunnels beneath it called the under park.

• Off-stage areas like the under park allow employees to smoke, eat, drink, fix their makeup, etc., but once they're back on stage again they're expected to perform.

• Once you walk through City Hall onto Main Street you're on stage.

Custodial Crews and Disney Characters

This section discusses the importance of custodial crews and Disney characters in maintaining the illusion of enchantment at Walt Disney World.

Importance of Custodial Crews

• The custodial crews at Walt Disney World receive more questions from customers than anyone else in the cast.

• They have to be courteous and aware of guests around them, even if they get asked the same question multiple times.

• The training program developed by Disney ensures that every one of its 19,000 employees understands its credo and the importance of their role in creating a world of make-believe.

Importance of Disney Characters

• The most strictly enforced rule in the park is that no one outside the cast shall ever be permitted to see a character with its mask off.

• These players are taught never under any circumstances to break character.

• Watching them learn the steps and gestures that make each one unique is a real treat for visitors.

Stu Leonard's Dairy

This section discusses how Stu Leonard's Dairy achieves success by listening to customer feedback.

Listening to Customers

• Stu Leonard's Dairy achieves success by listening to customers.

• They went around on the customer side of the table and listened to what they wanted, which included better quality products at lower prices and a fun atmosphere.

• Stu Leonard Jr. leads a focus group with customers every other Saturday afternoon to get feedback on what they like and don't like about the store.

• The family's access to customer opinion on a daily basis is an oversized suggestion box that is stuffed to capacity every business day.

Success of Stu Leonard's Dairy

• Stu Leonard's Dairy grosses a million and a half dollars a week with only 750 items, compared to an average supermarket with 16,000 items on its shelves that may do $200,000 of business in a good week.

• Stu styles himself as a monomaniac with a mission - to make every customer feel special.

Customer Feedback and Innovation

The speaker discusses the importance of customer feedback in improving products and services. They give examples of how they implemented customer suggestions to improve their store's offerings.

Importance of Customer Feedback

• Happy customers are more likely to return, so it is important to listen to their feedback.

• Customers will tell you what they don't like about your store, and it is important to react to this feedback.

• Giving customers what they want is key to retaining them.

Examples of Implementing Customer Suggestions

Fish Sales

• A customer complained that the fish was not fresh, even though it was sourced from a reputable market.

• To address this issue, the store set up a fish bar where customers could buy fresh fish right off the ice.

• This resulted in doubling their fish sales from 15,000 pounds per week to 30,000 pounds per week.

Strawberry Sales

• A customer suggested letting them pick strawberries out of big trays instead of pre-packaged quart baskets.

• The store tried this and saw tripled sales for strawberries.

Innovation at 3M

The speaker discusses how 3M fosters innovation by allowing employees time and resources to work on new technologies.

• Every scientist at 3M is expected to spend 15% of their time developing new technologies outside of authorized projects.

• Employees are encouraged to "bootleg" resources from other projects without going through proper channels if it helps with innovation.

• This culture of innovation is institutionalized and supported by upper management.

• The story of Post-it notes is given as an example of how 3M's innovation process works.

The Business of Making People Happy

In this section, the speaker discusses how Disney's main goal is to make people happy and how every employee plays a role in achieving that goal.

Disney's Unique Approach to Business

• McDonald's makes hamburgers, General Motors makes automobiles, Sony makes TVs, but what does Disney make? They make people happy.

• Everyone who works at Disney World is considered a cast member and has a role to play in making guests feel welcome and special.

• The park itself is designed to be picture-perfect with props, backdrops, lights, and everything else that goes into a giant production hidden from sight.

Onstage vs. Offstage

• Offstage at Walt Disney World is really under stage. The park is elevated at ground level beneath it runs a maze of tunnels called the under park.

• Clean costumes are issued to cast members at the beginning of each day with two million items in stock; this is the largest theatrical wardrobe in the world.

• Everyone who works at Disney World is expected to perform when they're onstage again. Masks and costume characters like Captain Hook are performing but everyone else also plays an important part.

Training for Success

• Every employee must understand their role in making guests feel special. New hires go into the park for three days of operations training where they learn about terminology used by Disney such as "attractions" instead of "rides."

• Even pointing out directions requires its own kind of training because employees need to take guests away from reality and put them into the fantasy world created by Disney.

Creating an Experience on the Jungle Cruise

In this section, the speaker discusses how employees are trained to create a unique experience for guests on the Jungle Cruise ride.

The Importance of Detail

• The script for the Jungle Cruise ride is nine pages long to discourage ad-libbing. It includes a list of approved variations and three pages on the philosophy of the ride.

• Employees are trained to take guests away from reality and put them into the jungle. They use different techniques to line up guests' minds with what they're seeing.

Making Guests Feel Special

• Even pointing out directions requires its own kind of training because employees need to make guests feel special. Every employee must understand their role in making guests feel welcome and special.

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The Importance of a Common Vision

In this section, Steve Jobs talks about the importance of having a common vision and how it was crucial to the success of the Macintosh project.

The Power of a Common Vision

• Everyone on the Macintosh team shared a common vision and believed in what they were doing.

• Leadership is about having a vision and being able to articulate it so that others can understand it and work towards achieving it.

• Apple bet heavily that Macintosh would attract converts long before the computer was completed.

Changing People's Perception of Computers

In this section, Steve Jobs talks about how he wanted to change people's perception of computers from being cold and impersonal machines to something fun and approachable.

Making Computers Fun

• The Macintosh project aimed to change people's perception of computers by making them more approachable and fun.

• Prior to the personal computer revolution, computers were generally associated with negative connotations. Jobs wanted to change that by making them cute, fuzzy, warm, and motherly.

• Through the design of Macintosh, Jobs conveyed something intangible through electronics - something that draws people in emotionally.

Designing an Automated Assembly Plant

In this section, Steve Jobs talks about designing an automated assembly plant for Macintosh production.

Automating Production

• Apple invested $20 million in an assembly plant specifically designed for high-volume production of Macintosh computers.

• Designing a state-of-the-art plant for the first time was an overwhelming task.

• After hiring two professional managers from outside the company and firing them both, Jobs gambled on Debbie Coleman, a member of the Macintosh team with no experience in manufacturing, to manage the plant.

The Importance of Unique Opportunities

In this section, Steve Jobs talks about how Apple provided unique opportunities for its employees to prove themselves.

Affording Unique Opportunities

• Apple was a place where people were afforded unique opportunities to prove themselves.

• Every single person on the Mac team had an opportunity to prove that they could write the book again.

• The release of Macintosh was a success, selling 72 thousand computers in the first 100 days on the market.

Two Approaches to Productivity Through People

The transcript discusses two different approaches to productivity through people. The first approach is used by Dana Corporation, which focuses on creating trust and pride of ownership among employees. The second approach is used by North American Tool and Die, which emphasizes honesty, involvement, and ingenuity among blue-collar workers.

Dana Corporation's Approach

• Dana Corporation believes that in order for a company to be viable, it must be competitive and profitable.

• Workers and management at Dana share the same concern of making oil seals profitable.

• To achieve this goal, Dana keeps everyone informed about company affairs and gives them the opportunity to speak out.

• As a result of this approach, productivity gains at Dana have been far beyond the industry average.

North American Tool and Die's Approach

• North American Tool and Die emphasizes honesty in all dealings with employees as well as inside and outside the company.

• Employees are encouraged to try new ideas without fear of failure or retribution.

• This creates a climate of trust where employees feel comfortable taking risks and reaching out for big hits.

• As a result of this approach, reject rates on parts have dropped from 5% to near-perfect tenth of 1%, annual sales have increased from 1.8 million dollars to 7 million dollars, and profits have soared upward to 700 percent.

Overall both companies focus on creating an environment where employees feel valued, trusted, involved in decision-making processes while also being given opportunities for growth.

Automating Rivet Loading

In this section, Dave figures out a way to automate the loading of rivets.

Automating Rivet Loading

• Dave figured out a way to load rivets automatically.

• The machines are spring-loaded and while it's cycling, the operator can put more rivets in.

• The process becomes like a game where the operator tries to beat the machine by putting in more rivets before it stops.

Out-Thinking Offshore Competition

In this section, Malone talks about how they compete against offshore companies by using old-fashioned American ingenuity.

Competing Against Offshore Companies

• They are not competing with job shops in the West Coast or Chicago anymore but against offshore companies.

• They beat them by out-thinking them and using old-fashioned American ingenuity.

Superperson Ceremony

In this section, Malone celebrates his employees' contributions towards achieving zero rejects.

Superperson Ceremony

• When an employee contributes towards achieving zero rejects, Malone makes it an occasion for proclaiming his gratitude at what he calls a superperson ceremony.

• The mood of these celebrations is genuine and sometimes Malone's effusive miss appears to embarrass his employees but they do like and respect him.

• The check given at the ceremony is for $50.00.

North American Tool-and-Die Freezer Award

In this section, Malone announces that Kelly won the North American Tool-and-Die Freezer Award for contributing to the company's goal of zero rejects.

North American Tool-and-Die Freezer Award

• Malone announces that Kelly won the North American Tool-and-Die Freezer Award for contributing to the company's goal of zero rejects.

• The award is given when an employee contributes in any way to helping the company towards its goal of zero rejects.

• Kelly put a part in the freezer to shrink it and then put it together, which helped achieve zero rejects.

IBM Golden Circle

In this section, IBM rewards its star performers with a trip to Hawaii.

IBM Golden Circle

• IBM rewards its star performers from its national marketing division by inviting them along with their spouses for three days of fun in the sun on the Hawaiian island of Kauai.

• These men and women are the stars of IBM's national marketing division who handle the company's entire product line and have exceeded their sales goals for the year.

• The event is designed as major recognition for its sales elite and is called the Golden Circle.

Tradition and Inspiration

The transcript discusses how McDonald's motivates and inspires its employees through tradition and events.

McDonald's Motivation Techniques

• McDonald's motivates its employees through parties, studio tours, ringside seats at Olympic events, and other events.

• The highlight of the trip is a final playoff to be held at a replica of a restaurant used for filming TV commercials. This time the kids will compete in teams against the very best in the system.

• The contestants use custom-fitted spatulas to cook hamburgers as quickly as possible.

• A real live game show host serves as the master of ceremonies for this event.

Judging Criteria

• Independent owner operators judge the contestants based on criteria from a 700-page operations manual that details every step of the cooking process and every gesture an attitude to be used in dealing with customers.

• Judges award points based on quality, taste, heat of product, meat preparation, uniformity of product taste, etc.

Awards Ceremony

• Before announcing the final awards (first, second, third), it is announced that all participants have done a terrific job competing against people from 31 different countries.

• The winners will return to their stores in Texas or New Zealand or Japan with a heavyweight mid title best and fastest Hamburg cooker in the world.

Passionate Leaders Drive Excellent Companies

The transcript discusses how excellent companies are driven by passionate leaders who believe in their products and services.

Importance of Quality

• Quality is the only way for businesses to win in a world where technology is available everywhere and labor is cheap.

• Excellent companies believe in the value of their products and services, which drives them to success.

Passionate Leaders

• The leaders of excellent companies are impassioned, and their passion animates the whole organization.

• These leaders make certain that everyone understands their values and vision. They do whatever they can to get employees involved, taking responsibility, identifying company objectives as their own.

Imperfect Companies

• Excellent companies have labor problems like anyone else and down quarters and deep uncertainty about how to handle foreign competition.

• By responding to customer needs, caring deeply about what they do, and infecting everyone in the organization with their commitment to quality, excellent companies stay competitive and profitable year after year.