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Consortium for Service Innovation

People Are People First

Ritz-Carlton Credo people.png

“We are ladies and gentlemen serving ladies and gentlemen.”  Employees at the Ritz think about and treat each other exactly as they would a guest.  They live the values independent of the role they are playing. This level of respect helps them deliver an outstanding experience for their employees as well as their customers!

People considerations – initial thoughts from the group

  • We are running out of people
    • 75 million Americas will retire of next 5 years

    • 70% of staff is not engaged (not aligned, not bought in) (difference is between “ a willing teammate” (ie someone wishing to avoid punishment) and “and eager teammate” (ie someone eager to assist and improve”) from John Wooden

    • New hires not aligned with employees near retirement or mid career

    • Improve hiring and retention

    • Can we tap educated/experienced/talented retiree’s, immigrants?

  • Be accountable for ourselves and our people
  • Loss of control over people /perfection (giving up the illusion of control)
  • Geographics/diversity – global workforce
  • Motivation for use of products
  • How to create value for people, they will do a good job if they love their job
  • Pay attention to heart and soul - people should be in the right job, need to take social responsibility for the people
  • Knowledge Orientation / Generational Differences
    • Breadth vs depth
    • Related to skill set
    • A ‘whole’ new mind set
    • How to you target/train/serve these people
    • Interrupt driven vs generative
    • Content vs context
    • Oriented around any information at anytime and anyway
    • Entitlement vs privilege
    • New generation vs Boomers
    • For the new generation – PC’s, PDA’s and the Web are native and integral to lifestyle
    • For boomers (many in position of authority) – The web is new and still being learned
  • Expectation setting flexible offerings form outside boundaries
  • We design processes to manage the lowest common denominator and as are result give up creativity
    • Be accountable for ourselves and our people
    • Loss of control over people /perfection (giving up the illusion of control)
    • Geographic’s/diversity – global workforce
    • Motivation for use of products
    • People “In Work Vs at work”
    • Freedom of choice, freedom to act
    • “Encourage People to Think”
    • Create ownership and passion
    • Loyalty and capability Vs seniority/tenure
  • How do we make support sexy?
    • Company image, support image
    • Recognition of achievements
    • Clear path for success and advancement
    • Celebrate shared success and learning
    • Recruit and retain “eager” teammates and winning support teams
    • Balance organizational and individual goals
    • How to create value for people, they will do a good job if they love their job
    • Pay attention to heart and soul - people should be in the right job, need to take social responsibility for the people
    • Make support  “cool, and successful, and socially conscious”

Who wants us to support them and how do they want to be supported? (this is a Zuboff question for the 2005 Executive Summit) – are we supporting our customer in the way they want?

OK = Golden Rule – Treat customers as you wish to be treated
OK but better is a Platinum Rule =Treat customers as they wish to be treated Can best achieve Platinum Rule if we have a relationship with customers and we show up and listen fully to unfiltered truths.

  • How do we accelerate building of trust (viewed as the critical element in the list)
  • Trust builds over time
  • Shared understanding
  • What is reasonable
  • How can technology help enable
  • The role of integrity

Revolutionary Change in the Structure of Our Relationships

Traditional Organization

Why it Once Triumphed

Why it Fails Now

What Replaces it – Networks

People *

Hierarchical chain of command

Brought simple large-scale order


Bosses brought order by dominating subordinates

Cannot handle complexity


Domination not best way to get organizational intelligence

Visions and Values


Lateral coordination

Informal networks


Free Intraprise

Self Managed


Eager, trusted, and loyal teammates


Shares - both positive & not so positive results



Organization by function

Produced efficiency through division of labor


Focused intelligence

Does not provide intensive cross-functional communication and continual peer-level coordination

Multiskilling specialists and networks


Organization in market-mediated networks

Native to network, comfortable finding and participating in adaptive/intelligent networks


Continuously learns and mentors

Uniform rules

Created a sense of fairness


Clearly established power of bosses

Still need rules, but need different rules

Guaranteed rights


Institutions of freedom and community

Balance personal and organizational goals


Has full rights, honors responsibilities and privacy

Standard procedures

Provided crude organizational memory


Able to use unskilled workers


Overcame old ways

Responds slowly to change


Does not deal well with complexity


Does not foster interconnection

Wide access to knowledge


Local self-direction and self-management


Force of the market and ethical community and knowledge management

Believes in doing the right thing, has natural alignment to org and team


Welcomes new challenges and responsibilities


Is accountable to self and team

A career advancing up the ladder

Bought loyalty


Furnished continuity of elite class of managers and professionals

Fewer managers needed and more educated workforce expects more promotions; therefore, not enough room for advancement

A career of growing competence and value


A growing network to get more done and learn


More pay and recognition for more capabilities and sharing

Recognition based on capacity and capability

Advances because of value creation,  mentoring and sharing of value

Impersonal relations

Reduced force of nepotism


Helped leaders enforce tough discipline and make tough decisions

Information-intensive jobs require in-depth relationships

Strong whole-person relationships


Options and alternatives


Strong drive for results

Active, positive communicator, superb listening skills


Empathy, curious, fun valued citizen


Views everyone as equal

Coordination from above

Provided direction for unskilled


Furnished strong supervision required by rapid turnover in boring jobs

Educated employees are ready for self-management

Self-managing teams


Lateral communications and collaboration (IT enabled)


Customer knowledge

Loyal to team and organization goals/values


Led by customers


Eager to venture into unknown


Trusted and valued by customers

From “The End of Bureaucracy and the Rise of the Intelligent Organization” P30, Gifford and Elizabeth Pinchot p 37  *(Last column added by CSI Feb 2007)

The question of control…or not?

In thinking about people be it; employees, partners (outsourcers), stockholders, customers or potential customers (markets) is it really helpful to segment how we think about them? 


Issues of control – lets assume we don’t have any…

  • We don’t have control of people, technology…
  • Have we given it up or has it been wrenched away from us?

Giving up the illusion of control…and embracing a role of influencer

The customers have more to do with brand image than the marketing department.  In a highly connected world it is the customer conversation that results from their experience with our products/services that defines brand image.

Next generation has a strong sense of entitlement –

Framework to create attractors – part of the new model

Balance of power has shifted from the institution to the individual

Control “Give it up to get it”, control is illusion… Google example they gave up control to get it.

Customer is designer – vendors create the experience 

Web 2.0 and  Ajax
    Web 1.0 – delivering content, providing access
Web 2.0 – facilitate participation and contribution, different style of applications eg. netvibes, flicker – enables users to be in control. Folksonomy – a way for “folks” to create the taxonomy (or tags) for content based on how they interact with it. 

Companies have an obligation to stockholders – to create value/wealth how does this play in the “no control” model? –

Support organizations have not been able to articulate the value they contribute…
•    Value of support is not about closing cases it is about creating value.

The power of alignment – resonance vs dissonance

An example:
As customers, how many of us enjoy negotiating with the VRU/IVR systems? The friendly greeting “please listen to this message as our menu options have recently changed” and the “push one for this push two for that”. Personally, I hate them and it seems most of the people I talk with find them, at best, annoying. And yet, how many of our companies invest heavily in this technology as a way to interact with customers?

Resonance vs dissonance:


  1. When we do things as a company that most of us dislike as customers it creates dissonance.
  2. When we have value statements about being customer focused and being dedicated to customer satisfaction, but are willing to compromise the customer experience for internal efficiencies and cost savings it creates dissonance.
  3. When our attitude toward our employees or partners is different from our attitude towards our customers it creates dissonance.


Dissonance - a definition:
Dissonance is created when executive behavior and operational practices do not align with stated values and goals.


Resonance – a definition:


Resonance is created when organizational (executives in particular) behavior and operational practices align with stated values and goals. Resonance leads to trust and a sense of security.

In a world where employee loyalty and pride directly influences customer loyalty we need to create resonance and a sense of pride in people (employees and customers) about being associated with “the company”. The alignment of goals and values to behavior and practices is a matter of integrity. Integrity is apparent (or not) through alignment.

An example of dissonance can often be found in our value statements, most of which include some statements about teams, teamwork and caring about people.  These statements usually set expectations of equality yet we allow even encourage executives to travel on private jets, have drivers and reserved parking in the name of efficiency or safety.  

Do we care if the employees care?

It is hard to care about something that lacks integrity or creates under currents of dissonance.

Why do we care?

“All knowledge workers are volunteers” - Peter Drucker

“Knowledge can not be conscripted, it can only be volunteered” - David Snowden

If we buy into the above observations and the fact that people do their best work when it plays to their strengths and it is something they care about, then what should we be thinking about and doing?  After reading the following story about Malden Mills, take a moment and think about how Malden employees feel. 

One of the first issues of alignment is corporate and executive credibility.  We must be believable, it is not what leaders say that counts but what they do and how many gaps are tolerated between value statements and reality.  One of the best examples of alignment of values and actions is Aaron Feuerstein.  Aaron is CEO of Malden Mills the folks in Massachusetts who manufacture the wildly popular Polartec® and Polarfleece®  fabric. On December 11, 1995 a fire burned most of Malden Mills to the ground and put 3,000 people out of work. Most of the 3,000 thought they were out of work permanently. A few employees were with the CEO in the parking lot during the fire and heard him say “This is not the end.” With these words began a saga that has made Aaron Feuerstein a legend among American leaders and a hero to his employees. Quotes are from Parade Magazine 9/8/96, pp. 4-5.


The story of Malden Mills and Aaron Feuerstein is the story of leadership. Business proceeds in cycles and the most recent cycle is one in which extremely highly paid CEOs are celebrated for cutting costs, downsizing, moving plant to venues of cheap labor and delivering maximum worth to stockholders. Leadership would appear to be synonymous with profit maker.

Aaron Feuerstein spent millions keeping all 3,000 employees on the payroll with full benefits for 3 months. Why? What did he get for his money? Is he a fool? Did he have some dark motive? Here is Aaron Feuerstein’s answer: “‘The fundamental difference is that I consider our workers an asset, not an expense.’ Indeed, he believes his job goes beyond just making money for shareholders, even though the only shareholders of Malden Mills are Feuerstein and his family. ‘I have a responsibility to the worker, both blue-collar and white-collar,’ Feuerstein added, his voice taking an edge of steely conviction. ‘I have an equal responsibility to the community. It would have been unconscionable to put 3,000 people on the streets and deliver a death blow to the cities of Lawrence and Methuen. Maybe on paper our company is worth less to Wall Street, but I can tell you it’s worth more. We’re doing fine.’"

Feuerstein did not throw his money away. It was not largesse. It was a well reasoned and sound leadership decision to invest millions in Malden Mills’ most critical asset, its workers. The contrast between this CEO and the currently celebrated CEOs making 30, 60 or 100 million dollars a year by eliminating jobs and moving plants is simply astounding. How much are you willing to wager that every company that closed a plant in recent years to boost stock prices has a vision statement with words like …we value and respect our employees as our most important asset?

How many of the laid off employees believe that?

What do the surviving employees believe? 

What did the Malden employees believe and feel when they returned to work? 

What can we do (short of burning down a factory!) to capture the feelings of the Malden employees and bring some of it to our companies?

To a leader that has the conviction of his beliefs, words like value and respect must be backed up with hard decisions and actions. The real test of leadership is maintaining that alignment during change and upheaval.


What sets Aaron Feuerstein apart from the CEOs of ATT (44,000 layoffs), IBM (over 100,000 layoffs) is that he is a leader. He has a conviction that employees are his most critical asset and lives by it.  The most important communication is not what you say but what you do.
Another example of resonance might be found in the area of conservation. Most companies want to be efficient and conserve resources, certainly no one wants to be overtly wasteful.  While most companies have some form of recycling in place Timberland in New Hampshire, Google in Mountain View and Hyperion Solutions in Santa Clara have all taken things a step further.  These companies offer significant cash incentives from $3000 to $5000 to any employees to help purchase a hybrid automobile that gets at least 45MPG.  These overt, company wide endorsements to conservation makes corporate integrity more tangible and easier for conservation minded employees to have deep pride in and alignment with their companies.

The power of alignment …

  • To our purpose and goals (what we are about)
  • To values (the guidelines for what is acceptable in our approach)
  • To the customer and their success

To further illustrate alignment, several years ago Tom Peters told a story about a young Federal Express driver.  Late in the day the driver found that he could not open one of the local FedEx drop boxes anchored to the concrete street corner because the lock had been vandalized.  The driver knew that customers had packages trapped inside and knowing his company’s commitment to on time delivery, he raced to a local hardware store, bought a hacksaw and sawed the legs off the box and wrestled the 400 pound plus box into the truck.  He made his way to the airport where the box was opened and all packages made the flight to the Memphis hub. 
In some companies the destruction of company property might have prompted a letter of reprimand or even a firing.  In FedEx’s case the story was celebrated locally and all the way back into the boardroom, and has taken on legendary status to help align employees with FedEx purpose and key goals.

People, networks and innovation

Frans Johansson in “The Medici Effect” talks about creativity at the “intersection” (unpredictable) where two seemingly unrelated disciplines meet and extraordinary creativity is possible.  One example is of the largest office complex, called Eastgate in Zimbabwe where dessert temperatures can vary from over 100 to 40. Yet this building designed without air conditioning maintains year round internal temperature of 73 to 77 degrees and the building operates on less than 10% of the energy of other buildings its size and saved the owners an initial $3.5M in equipment costs during construction.  The intersection of architectural design based and the building of termite mounds allowed this to happen.
Jim Collins author of “Built to Last” collected significant evidence that salaries, stock options, profit sharing and bonuses were NOT the key drivers for executive and organizational success. There was no correlation to success from any of the many combinations of these financial instruments (KITA).  These tangible benefits were important to attract a top executive but once in place the key was internal drive and pride.  The successful executives were eager to do a good job.

People Needs

Why Do It

Why Needed

What To Recognize


Better Output From Teams and Secure Individuals

Bring employee heart and pride to work

Not everyone will be in alignment, not everyone should/will stay


Needed for Basic Productivity

Shows company commitment

Employees and teams must know they have freedom to acquire unanticipated tools and resources to address ambiguity

Direction and Expectations

Key responsibility for executives

Empowerment without direction and expectations is chaos

Teams and individuals will need freedom to adjust without bureaucracy approvals


Success, learning, and mentoring are keys to continuous improvements and employee development

Builds sense of achievement and reinforces self worth

Recognition and celebrations must be timely and specific (Someone will always feel left out)


To attract and keep the best people

People produce the best results when secure and happy

The issues with KITA and how to bring joy to the work environment


Some things to try:

  1. Separate expectations of financial rewards from results
  2. Plan for failures and change (Innovation requires significant trial and error)  Research has shown the best innovators almost never arrive directly at their best ideas, instead they have many ideas and try many many more things to learn and to arrive at the best ideas
  3. Recognize failure as output and learning (also as a sign of effort)
  4. Do not reward repeating the same failure, everyone must learn from setbacks
  5. Be suspicious of teams and individuals that never fail
  6. Remove time pressure
  7. Set expectations for:
    1. Success (Recognition)
    2. Failure (Never to be hidden, must provide basis for team learning)
    3. Inaction (Cannot be tolerated)
  8. If we hire or allow formation of homogenous teams, we are likely to have excellent team harmony, but since there is a narrow cross section of diversity we should not be surprised with narrower results and solutions
  9. If we hire for diversity and learn to manage and appreciate wider differences, the deeper more diverse access to knowledge offers a richer environment for innovative solutions
  10. Make sure to bring joy and balance into the workplace
  11. Celebrate meaningful specific success
    1. Keep an eye out for Ha Ha moments of joyfulness
    2. Keep an eye out for Ahhh moments to appreciate simple beauty and success
    3. Keep an eye out for Ahaa moments of innovation and breakthough learning


How to develop trust, loyalty and alignment in a distributed environment?
Reinforced what we already know about people and apply separate from their role.

  • Do they care about your success - Loyalty
  • Global/cultural issues, Accent’s if Outsourced, it goes both ways
  • Understanding
  • Who are you engaged with and why when you Outsource
  • Roles
  • Alignment (employees, customers, partners, sales)
  • Distributed model for resources
  • Tone comes off differently in written communication
  • Must start at home
  • Authentic
  • Transparency and choice
  • Employee satisfaction
  • Personal identity and pride and loyalty to the company
  • Purpose
  • Trust

Experience → Satisfaction (rational) + time =  Relationship (Emotional)

The question of loyalty (a people thing)





Traditional Model

New Model

A resource Human beings

Defined by "job"

Defined by reputation
Simplictic responsibility Multi-dimentional capability
Evaluated by management Evaluated through impact of presence of value


Traditional Organization

New Organization

New Organization Needs People Who:


Dynamic Share vision, values, learning and drive for results
Singular Multiple Are teammates, self-managed, adaptive, have strong laterla coordination, loyalty and trust
Simplistic Complex Are multi-skilled, networked to higher capacity
Confined Connected Are free with wide access to knowledge, resources and customers
One Dimensional Multi-Dimensional Eager to grow network, knowledge, capabilities, and to create shared value

Actions you can take that will help people build the new organization:

  1. Remove as many personal and organizational dis-satisfiers (KITA - both negative and positive) as possible (Ref. HBR article “One More Time: How Do You Motivate Employees?” by Frederick Herzberg. (things to stop)
    1. Communicate and assure alignment
      1. Corporate
      2. Organizational
      3. Individual
    2. Open Access to information and resources
    3. Remove Organizational Boundaries
    4. Reduce  Direct Supervision
    5. Remove Environmental (work place) Impediments
    6. Common understanding for Assumptions, Assessments, and Assertions, and Conditions of Satisfaction
    7. Adjust Compensation and Benefits to an attractive/competitive leve
    8. Communicate, Use all Channels and actively listen
  2. Start individual or create organizational generator (motivators)
    1. Assure Work is Meaningful
    2. Celebrate Meaningful Achievements and Learning
    3. Celebrate Team Achievements (include partners and customers)
    4. Celebrate Value, Sharing, Community Service
    5. Balance Individual and Organizational goals
    6. Increase Responsibility
    7. “Horizontal” Work (not piling on more of the same)
    8. Encourage Learning and Growth and Fun
    9. Formally Budget Time for Individual and/or Team Innovation
    10. Bring Fun to Work and be Joyful
  3. Link Rewards and Advancement to Mentoring, Creating and Sharing Value
  4. Make Diversity and Development a Condition of Promotion
  5. Hire with More Emphasis on Curiosity and Empathy
  6. Three Things to Start Doing:
    1. Verify Open Communications
    2. Make Needed Information Visible/Available
    3. Assure Pay and Benefits are Above Mean
  7. Three Things to Stop Doing:
    1. Employee Ranking
    2. Remove Barriers and Metrics that Encourage Sub-Optimization (Silo’s)
    3. ...?
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