Joseph A. Michelli: First Interview, by Bob Morris

Joseph A. Michelli

Michelli is an internationally sought-after speaker, author, and organizational consultant who has been described as “catching what is right in the world and playfully sparking people and businesses to grow toward the extraordinary.” In addition to writing best-selling books about enduring business principles, he hosted an award-winning daily radio program in Colorado Springs, Colorado, for over a decade. He transfers his knowledge of exceptional business practices through keynote presentations that explore ways to develop joyful and productive workplaces with a focus on the total customer experience.  His insights encourage leaders and frontline workers to grow and invest passionately in all aspects of their life. Michelli’s books include When Fish Fly: Lessons for Creating a Vital and Energized Workplace which was co-authored with John Yokoyama, owner of the “World Famous” Pike Place Fish Market in Seattle; also, The Starbucks Experience: 5 Principles for Turning Ordinary into Extraordinaryand The New Gold Standard: 5 Leadership Principles for Creating a Legendary Customer Experience Courtesy of the Ritz-Carlton Hotel Company. Michelli earned his bachelor’s degree from the University of Denver and his masters and doctorate degrees from the University of Southern California. Revealingly, he believes his greatest accomplishment is his ability to learn from the laughter and humor of his children, Andrew and Fiona.

Note: Since I conducted this interview, Michelli’s new book, Prescription for Excellence: Leadership Lessons for Creating a World Class Customer Experience from UCLA Health System, has been published by McGraw-Hill (May, 2011).

Morris: Before discussing your books, here are a few general questions. First, as you already know, recent Gallup research indicates that 29% of the U.S.  Workforce is engaged (i.e. loyal, enthusiastic, and productive) whereas 55% is passively disengaged. That is, they are going through the motions, doing only what they must, “mailing it in,” coasting, etc. What about the other 16%? Are they engaged? Yes. However, they are doing whatever they can to undermine their employer’s efforts to succeed. If true, how do you explain these statistics?

Michelli: Alas, the 16% actively disengaged group are the toxic element of the workforce. I liken the Gallup engagement groups to categories of property dwellers. You have “owners” – the engaged group, “renters” – the passively disengaged, and “squatters” – the actively disengaged.  Owners build equity in a company and are concerned about a business’ sustainability.  Renters don’t create problems because they want a quality experience while they are at the job but ‘it is just a job” so they aren’t concerned about building equity in their employer’s brand.  The group you are asking about, the squatters, are often just taking up space.   If getting things done crosses into their space they can be actively involved in undermining progress. They often are the core gossipers, the severe underachievers, and the most opposed to change.  More importantly they are a group that can’t be ignored as they weigh down management resources and undermine morale.

Morris: In 1924, William L. McKnight, then CEO of 3M, observed, “If you put fences around people, you get sheep. Give peoples the room they need.” In your opinion, why do so many organizations enclose the hearts, and minds, and souls of their people within “fences”?

Michelli: If you want sheep, fences are good.  There was a Harvard Business Review article a couple of years ago that talked about the value of a Machiavellian leader.  In essence, the article asserted that in some jobs you just want people to follow the rules, take no risks, and avoid innovation.  While those types of jobs are in decline in an information economy, unfortunately a residual notion exists that operational excellence requires compliant workers not free spirits. For me the fundamental shift in leadership is to manage outcomes not details.  Given people what you want them to accomplish, give them training so they know how it can be done, give them some boundaries they can’t cross to achieve the desired outcome, and then empower them through trust.  I repeatedly see this combination producing exceptional results.

Morris: Given your response, what must be done to create the “room” for workers to which McKnight refers?

Michelli: Room without boundaries or a sense of direction can lead to chaos and works against innovation and calculated risk-taking. My friend Terry Paulson says the difference between a vision and an hallucination is “how many people see it.”  To create productive “room”, a leader defines a vision that is seen by those they lead.  They offer desired outcomes, select their talent well, develop that talent, and then stay out of the way.

Morris: Now let’s visit two remarkable organizations in Seattle. What were your initial impressions when you first visited the “World Famous” Pike Place Fish Market?

Michelli: I was struck by Johnny Yokoyama (the fish market’s owner).  He was unusually willing to adapt.   Johnny had a rather traumatic childhood.   His father’s produce business at the Pike Place Market had been taken by the federal government.  Johnny’s family had been interned in Minidoka and Tule Lake relocation camps.  His early life included living surrounded by barbed wire and in tarpaper huts.  He was embittered when he worked at the Pike Place Fish Market and reluctantly took ownership of it.  For years, he was a controlling leader who did not give his people any “room.”  But Johnny encountered a great deal of difficulty with his business and had the insight to realize that many of his problems came from his controlling leadership style.  That insight coupled with his willingness to change led to the breakthrough vitality of his unique fish market.

Morris: What business lessons can be learned from that workplace culture?

Michelli: In a nutshell, love your people and they will love your customer.  If you love your customer, you will become a beloved brand.

Morris: I have been to Pike Place Fish Market, on some occasions with no intention to purchase anything but merely to observe the scene. I think that is a brilliant (albeit subtle) marketing strategy. Do you agree?

Michelli: Alas, the design secret is out!  Yes, most people who go down to the Pike Place Market are tourists.  Most do not go there to buy fish.  They are there to enjoy the flowers, street musicians, and ambiance.  Since people do not have purchase intent to buy fish, the only way you can get them to form that intent is by getting their attention and getting them in relationship with you.   Johnny’s market has become a destination – a human interest magnet if you will.  As people become engaged, they are much more likely to take a part of that engagement with them – thus, a fish is purchased.

Morris: It has been several years since the publication of The Starbucks Experience and much has happened since then in its competitive marketplace.  In your opinion, to what extent has the Starbucks organization responded effectively to various changes?

Michelli: Howard Schultz has returned to the helm of the company with a mission to get back to the core experience that led to the brand’s prominence.    Let’s face it, affordable luxury brands took a hit with less consumer discretionary income and consumer confidence starting in the third quarter of 2008.  I think Starbucks has positioned itself well by thinning underproducing stores, trimming the non-customer facing workforce, developing coffee products at more accessible price points, and refocusing on their prime business coffee -not food, music, books, etc.

Morris: In your book about Starbucks, you identify and discuss five principles  “for turning ordinary into extraordinary.” Which of them seems to have been the most difficult for Starbucks to follow in recent years? Why?

Michelli: I had a principle called “everything matters” which essentially says  “retail is detail” and it is the little things that make the difference between an excellent and an average customer experience.   Unfortunately, for a period Starbucks let some of the details of the customer experience slip.  Instead, they became more focused on the stockholder experience.  As such, return-on-investment (ROI) trumped the customer reality.    They purchased automatic coffee brewers which were more efficient but that detracted from    a  “handcrafted” beverage.  The machines were so tall that customers could not see their drink being made.   The espresso machines were well sealed for freshness but you could not smell coffee in the coffee shop.  In essence, the theater and sensory experience was compromised by well-intentioned ROI decisions

Morris: Now please focus on The New Gold Standard. Until your book, why had none other been written about the Ritz-Carlton Hotel Company

Michelli: I’m laughing to myself on this question. If you only knew how much groveling I went through to write this book you would understand the why. The Ritz-Carlton Hotel Company is a high equity brand.  Many authors have knocked on their door.  I was fortunate enough to pass their high standards and due diligence process.  Leaders at the company had read my other books, so they kindly gave me chances to plead my case.  I am honored to have been trusted to tell their rich leadership story.

Morris: Customer service provided by Ritz-Carlton is consistently of such a high quality that guests take it for granted. Founder César Ritz observed long ago that  “people like to be served, but invisibly.”  Please provide a few examples of that “invisibility.”

Michelli: You call for a reservation to the central reservation line.  The Ritz-Carlton staff do all the things other hotels do – confirm the dates, rates, and method of payment but they also do the little bit extra by asking “what is the reason for your visit.” You say, “I’m going to New York to take my daughter to see the musical The Lion King.”   Unlike most other businesses, The Ritz-Carlton takes their knowledge of you and leverages it to meet unstated needs.   As such, weeks later when you actually arrive in New York with your daughter, guess what is playing as you enter the room – the theme from The Lion King.   That is invisible service.  I also call it  “Wow service.”  I believe a wow occurs when a customer says “how did they do that, how did they know.”  That how/ wow connection emerges from Cesar’s vision for invisible service.

Morris: The five leadership principles to which the subtitle of your book refers seem to be followed at all levels and in all areas of the organization, not only by senior managers. Is that a fair assessment?

Michelli: I think the Ritz-Carlton’s sustained excellence (extensive awards for operational quality, customer satisfaction etc) come from consistently defining their culture, communicating that culture ferociously, and assuring alignment of every member of their staff with the companies culture and service values.

Morris: You suggest that, rather than competition from other hotel companies such as Four Seasons, the greatest risk facing Ritz-Carlton is complacency.  How so? How does Ritz-Carlton respond to that risk?

Michelli: Well the risk is heightened in a down economy.  Ritz-Carlton has a well-defined target market of the top 5% of business travelers.  If they secure that market their business plan works.  Those travelers not only spend a great deal but they also affect the spending of the companies they represent.  If the Ritz-Carlton were to attempt to trade down to attract a broader market, they would run the risk of diluting the brand for their core clientele.  It would be like the dog that sees a larger reflected bone in the water below, releasing their bone to reach for the reflection.

Morris: Your book includes several examples of Ritz-Carlton service that does not involve a guest. For those who have not as yet read your book, please share the story about Natalie Salazar, then age 12, in Dearborn, Michigan.

Michelli: Natalie came to the attention of Ritz-Carlton staff through a staff member’s involvement in the community.  Natalie had been diagnosed with a terminal illness and had a desire to experience a “prom” before she died.  The Ritz-Carlton staff took responsibility for making her dream a reality.   Many departments volunteered their time to throw a grand prom for Natalie.    Even after the evening was a success, the staff at the Ritz-Carlton stayed connected with Natalie’s family.  In fact, the Ritz-Carlton seamstress who made Natalie’s prom dress was asked to make the dress in which Natalie was buried.

Morris: In your book, you devote considerable attention to Ritz-Carlton’s Global Learning Center.  Briefly, how does it contribute to the company’s legacy as well as to its current operations?

Michelli: A division of the Global Learning Center — The Ritz-Carlton Leadership Center — provides training to business leaders from around the globe.   It is a viable and profitable business entity that also continues to promulgate the legendary service and brand mystique of The Ritz-Carlton Hotel Company.

Morris: Here’s a hypothetical question. If César Ritz were to observe the Ritz-Carlton Hotel Company today, what do you think his dominant impressions and reactions would be?

Michelli: I sense that, because in César Ritz’s day service professionalism was at such a high level, he might be hypercritical. At the same time, service expectations have shifted in the past 125 years from pretentious and stuffy to fresh and relevant.  In either case, I think he would be pleased to see his brand continue to be a service and operational excellence leader.

Morris: Which question do you wish you had been asked – but weren’t — and what is your response to it?

Michelli: I always enjoy looking ahead, so I will simply tell you that I am working on a new book about UCLA health services. I think the “patient experience” has been neglected in many discussions of healthcare reform, so I’m dedicating my next book to talking about how one of America’s greatest healthcare systems transformed the way patient’s feel about their care.  And last but not least, I wish you would have asked how important your   involvement has had on the sales of my books.  If you had asked that, I would have said your reviews and discussions of my books played an essential role   for whatever success I have achieved.  Thank you for being an avid reviewer and communicator.  The world is a better place thanks to you.  I thank your audience and readership, as well, for the time they have invested in being lifelong learners.

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Michelli invites you to check out the wealth of resources at this web site by clicking here.

 

 


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