Winning Behavior by Terry R. Bacon David G. Pugh

Creating and Sustaining Behavioral Differentiation 335

try on its head and treated his employees as though they were the most im-
portant people in his business. Each of these leaders had not only a behavioral
principle that would distinguish them from their rivals but also the will to
drive that principle through the fabric of the organizations they led. The lead-
ers’ will in action is the fundamental difference between companies that
know what to do and do it and those who know what to do but don’t. Here are
some other lessons learned from companies that exemplify BD:

You have to be thoughtful about your behavior. It becomes an important
element of corporate strategy as well as the basis for decisions you make
about the people you hire, the jobs you create, the training and education
you provide, the goals and expectations you set, the responsibilities and
authorities you delegate, the rewards and recognition you give, and the
processes you create for running the business on a day-to-day and mo-
ment-by-moment basis. For example, SAS and Ritz-Carlton identified ev-
ery customer touch point and thought about how to behave at those touch
points to serve customers exceptionally well and build a behavioral ad-
vantage. Ritz-Carlton specified those behaviors in its Gold Standards
(shown in Figure 5-1) and reinforces them in daily lineups of employees.
Men’s Wearhouse promoted a clinical psychologist and specialist in hu-
man behavior to one of its most important executive positions: Executive
Vice President for Store Operations.
You have to invest more in employee education and development than
your competitors do. The exemplars of BD spend an extraordinary amount
of time and money training, educating, and coaching employees on their
behavior toward customers. As we have observed throughout this book,
companies like Southwest Airlines, Ritz-Carlton, Hall Kinion, and Men’s
Wearhouse invariably spend more to develop their people than their rivals
do. The corporate universities at Ritz-Carlton, Southwest Airlines, Hall
Kinion, and Men’s Wearhouse are among the finest in corporate America.
Along with a strong commitment to education, you have to build systems
and processes that make the exceptional treatment of customers routine.
These systems include policies for interacting with customers, decision
rules (such as how to handle returns) that enable employees to make deci-
sions that will delight customers, and performance expectations that result
in exceptional treatment of customers. EMC’s rapid-escalation protocols,
for instance, minimize downtime for customers’ systems and behaviorally
differentiate EMC.
You have to enable people who are on the front line with customers to
make the decisions that will result in extraordinary behavior, which means
that you have to trust frontline employees. Clearly, this level of trust does

336 Winning Behavior

not come automatically. To build high trust in their employees, exemplary
companies like Heidrick & Struggles, Hall Kinion, and Southwest Airlines
screen job candidates carefully, generally with teams of employees doing
the screening. Then they give new hires a comprehensive program of ori-
entation and education. They set very high expectations, provide ongoing
coaching and reinforcement of core behavioral principles, and then moni-
tor customer satisfaction closely. Obviously, other companies also screen
candidates, train new hires, and monitor customer satisfaction. However,
in the exemplary companies these functions are carried out with an almost
religious conviction. Companies on the negative end of the behavioral
spectrum often do not trust employees or customers. They offer less train-
ing, have punitive policies (designed to keep employees in line and mini-
mize customer misbehavior), and use managers and supervisors as police.
It is important to bear in mind what Benjamin Schneider and David E.
Bowen observed: “Workers are the service organization to the customers
they serve.”3 When they feel trusted and empowered, positive BD is pos-
sible; when they feel distrusted and powerless, the only BD you may get is
negative.
You have to create a culture that dignifies and respects the individual. We
found it remarkable, although not surprising, that the companies that be-
haviorally differentiate themselves with customers also behaviorally dif-
ferentiate themselves as employers. They have lower turnover and higher
employee satisfaction scores than their competitors. They are consistently
ranked among the best places to work. Since 1997, for instance, Southwest
has been among the top five in Fortune’s list of the “Best Companies to
Work For in America” four times. Men’s Wearhouse has made Fortune’s
list three times in the last three years. Forbes also named it one of the “Best
Big Companies in America” three times in a row. BD begins at home. You
differentiate yourself as an employer first. You create a workplace that el-
evates employees’ self-esteem and makes it a rewarding place to work.
That becomes the foundation for expecting and getting extraordinary be-
haviors from your employees.
You create reinforcing mythologies around differentiated behaviors to-
ward customers. You turn your behavioral superstars into heroes and tell
stories about them in company e-mails, newsletters, meetings, awards cer-
emonies, and other forms of communication and social interaction. We felt
that of all the companies we studied, Ritz-Carlton and EMC did the best
job of this, but all of them found ways to tell stories about exceptional
treatment customers received and the people who treated them that way.
You have to think like the customer and then craft the kinds of customer
experiences you would want if you were the customer. In many of our in-

Creating and Sustaining Behavioral Differentiation 337

terviews with people in exemplary companies, we heard a similar version
of the Golden Rule: Serve customers as you would like to be served.
Maybe it is as simple as this simple rule, yet we have noted throughout this
book that knowing what to do is not the same as doing it, and that most
companies never realize the full potential of this principle. Herb Kelleher
understood both the simplicity of the concept and the fact that most com-
panies fail to do it. “You want them to get off the plane,” he said, “with the
feeling that they were welcome, that they enjoyed great hospitality, that
they were, perhaps, entertained. You want it to be a warm event in their
lives, so that they will come back. And that’s the hardest thing for a com-
petitor to emulate.”

Good players are always looking for ways to make their pieces
as active as possible. Knights need to find advanced support
points, Bishops need open diagonals, and open files must be
created for your Rooks.

—Jeremy Silman, The Complete Book of Chess Mastery

The Secret to Creating and Sustaining Behavioral
Differentiation

What is the secret to creating and sustaining behavioral differentiation?
It’s just this: You have to manage your customers’ experiences from start to
finish. You have to think about what they are experiencing at every touch
point and then design interactions that surpass what they experience when
they interact with your competitors. For your company to achieve this, you
may need the operational discipline of an EMC or the strong service-oriented
culture of a Ritz-Carlton. You may need the creativity and willingness to take
risks that Kim Hansen showed at General American Telecom, and the com-
mitment to employee training and education we saw at Southwest Airlines,
Hall Kinion, and Men’s Wearhouse—or the professionalism and disciplined
mentoring of a Heidrick & Struggles.

It takes skill and will to create and sustain BD. Both are important, but
without the will, the skill won’t matter. So, although training and education
are crucial, simply training people to behave well won’t make a lasting dif-
ference in how they treat customers. Behavioral differentiation does not hap-
pen serendipitously. It must be led. It won’t happen if leaders pay only lip ser-
vice to it, and it won’t happen if leaders don’t walk the talk themselves. It

338 Winning Behavior

won’t happen with signs and slogans alone. It requires a constant infusion of
energy, focus, and direction from the leadership of the organization. In Chap-
ter 9 we wrote about the three engines that drive BD: leadership, culture, and
processes. To behaviorally differentiate yourself from your competitors, you
need all three of these engines running smoothly.

We suspect that many leaders understand this but are unable to overcome
the inertia of a culture in which people just do what it takes to get the job done
or to surmount the resistance of entrenched managers who are too focused on
internal matters to grasp and commit to behavioral differentiation as a way of
being. We also suspect that many leaders themselves don’t get it. What makes
most companies common and undistinguished is that it’s easy to become dis-
tracted by the day-to-day problems, the immediacy of the telephone ringing,
and the urgency of yet another meeting to attend. Gustav Metzman, who was
once president of the New York Central Railroad, observed how the tyranny
of the here and now prevents us from doing what we really should be doing
to build the future: “Most business men generally are so busy coping with im-
mediate and piecemeal matters that there is a lamentable tendency to let the
long run or future take care of itself. We often are so busy putting out fires,
so to speak, that we find it difficult to do the planning that would prevent
those fires from occurring in the first place. As a prominent educator has ex-
pressed it, Americans generally spend so much time on things that are urgent
that we have none left to spend on those that are important.”4

To create or increase BD in your company, then, you need to avoid being
sidetracked by the minutiae and distractions of the day-to-day business life.
If you do not behaviorally differentiate yourself now, then a change program
to develop BD is likely to require a significant effort, in part because behav-
ioral changes are difficult and in part because the behaviors you may need to
change are ubiquitous, involving not only direct interactions between your
employees and your customers but also every indirect touch point. In At
America’s Service, Karl Albrecht observed: “When the customer sees an ad-
vertisement for your business, that’s a moment of truth; it creates an impres-
sion. Driving by your facility is, for the customer, a moment of truth. Enter-
ing a parking lot, walking into a lobby and getting an impression of the place,
receiving a bill or a statement in the mail, listening to a recorded voice on the
telephone, getting a package home and opening it, all of these are events that
lead to an impression of your service. The sum total of all of the possible
moments of truth your customers experience, both human and nonhuman, be-
comes your service image.”5 Albrecht is focusing on customer service, but it
should be clear that his argument extends to the overall behavioral impression
your company creates.

Creating and Sustaining Behavioral Differentiation 339

It’s important to keep in mind that you cannot avoid giving behavioral im-
pressions to customers. You are always signifying by your behavior that you
are either distinctly better than your competitors, or no different from your
competitors, or distinctly worse than your competitors. Whether you like it or
not, customers are always coming to one of those three conclusions about
you. If you choose to ignore behavior as a potential source of competitive ad-
vantage, then at best you are likely to fall into the bland, undifferentiated mid-
dle hump of the behavioral bell curve (see Figure 3-1), and you will be out-
distanced by your competitors who do differentiate themselves behaviorally.
At worst, you will lose customers by falling into the negatively differentiated
left side of Figure 3-1. Or you can be thoughtful and strategic about your be-
havior toward employees, customers, and other stakeholder groups and use
behavior to differentiate yourself and gain competitive advantage. The choice
is yours.

Why You Should Care About Behavioral
Differentiation

If we take the most uncomplicated look at business, we see that business
leaders can really manage only three things: the products or services they pro-
duce; what they charge for those products or services, which is a function of
the ability to control costs; and how they behave toward customers. Every-
thing else in business management is a function of these three things: prod-
ucts, price, and behavior.

Products
Businesses devote considerable time and attention to what they produce

and how they produce and distribute it. Companies normally strive to differ-
entiate themselves on one or more of these functions of business manage-
ment: innovation, product/ service design, production, distribution, market-
ing & sales, or the design of after-sales service systems. Although these are
reasonable avenues for differentiation, competitors with the resources and
will to copy them can easily do so. In the highly competitive and entropic
markets most companies face today, product and service differentiation has a
short half-life. You can perhaps gain some temporary advantages through in-
novation, but your competitors will be motivated to eliminate those advan-
tages as quickly as possible.

340 Winning Behavior

Price

Price can differentiate you if your products cannot. However, to sustain
price as a competitive advantage you must have the internal systems and ex-
ternal controls necessary to remain the low-price leader. Your competitors
will envy your cost controls and will try to emulate them, so you may have to
beat down costs relentlessly. Wal-Mart has succeeded thus far, but there are
signs that their strategy is weakening. To keep costs down, they have had to
reduce the number of employees in their stores, and some employees have
filed lawsuits contending that Wal-Mart is forcing them to work off the
clock.6 Already, customers are feeling the effects of these issues. It’s harder
to get service in a Wal-Mart these days. Employees no longer abide by Sam’s
10-foot rule. If Wal-Mart persists in a low-price strategy as its primary means
of differentiation, the company will lose the behavioral advantages it enjoyed
in the past.

Behavior

Finally, behavior can be a powerful differentiator if product and price are
undifferentiating. In other words, if your products are similar to your com-
petitors’ products and you charge about the same amount, then superior be-
havior can be a powerful differentiator. However, if a competitor offers a su-
perior product on the market, then the effect of behavior will be diminished.
If price is not a barrier, customers will prefer to buy the superior product. If
the superior product costs considerably more, then customers will weigh the
benefits of the superior product and determine whether the price tradeoff is
worth it. However, when product and price are relatively equal in the cus-
tomer’s mind, then behavior becomes the strongest differentiator.

Today, especially in mature industries and markets, the competing prod-
ucts are very similar and the prices being charged are usually close to the
mean. Any imbalances in the function or quality of competing products tend
to be eliminated quickly, and differences in price tend to evaporate as com-
petitors learn what their rivals are charging and adjust their pricing accord-
ingly. Consequently, behavior is playing a greater and greater role in how
customers make decisions. When they can get essentially the same products
or services at essentially the same prices, then they will choose to work with
the suppliers whose behavior toward them is most positive.

You should care about behavioral differentiation because it is an aspect of
your business that you can manage. You can behave in ways that enable you
to build competitive advantage. You should care about behavioral differenti-
ation because if your competitors are outbehaving you, then you are losing
business you should not be losing. You should care about it because it is an

Creating and Sustaining Behavioral Differentiation 341

excellent source of sustainable advantage and because it can help you build
greater customer loyalty and market share. In this era of hypercompetitive
markets and increasing competition, behavioral differentiation may be the
best opportunity you have to win more business.

The chessboard is the world; the pieces are the phenomenon of
the universe; the rules of the game are what we call the laws of
nature. The player on the other side is hidden from us. We
know that his play is always fair, just, and patient. But also we
know, to our cost, that he never overlooks a mistake, or makes
the smallest allowance for ignorance.

—Thomas Henry Huxley

Challenges for Readers

1. To what extent does your organization think about behavior as an element
of competitive strategy? Are you self-conscious about your behavior to-
ward customers, employees, suppliers, partners, and other stakeholders?
Are you using behavior as a competitive tool now? What more could you
do to make behavior a source of competitive advantage?

2. The “C” level executives in a company normally include the CEO (chief
executive officer), COO (chief operating officer), and CFO (chief finan-
cial officer). Many companies today also have a CIO (chief information
officer), CTO (chief technology officer), or CLO (chief learning officer).
What about a chief behavior officer (CBO)? Although we don’t want to be
accused of proliferating the C’s, behavior is an increasingly important
source of competitive advantage. Who in an organization should have
oversight for behavior?

3. Review our list of lessons learned from the companies that exemplify BD.
How does your organization compare to them? Do you have a governing
principle that drives BD? Are you thoughtful about your behavior? Do you
invest more in education and training than your rivals do? Do you have
systems and processes that promote and support exceptional behavior? Do
you give your frontline people the authority and responsibility to behave
exceptionally? Do you have a culture that dignifies and respects employ-
ees? Do you tell stories about your behavioral heroes? Do you explicitly
follow the Golden Rule? If your answers to any of these questions is no,
then what can you do about it?

342 Winning Behavior

4. We have argued that you should care about behavioral differentiation be-
cause it can have a profound effect on your business and is a great source
of competitive advantage. Do you care?

Endnotes

1. Thomas J. Neff and James M. Citrin, Lessons from the Top: The Search
for America’s Best Business Leaders (New York: Currency Doubleday,
1999), p. 217.

2. Alan M. Webber, “Danger: Toxic Company,” Fast Company, www.
fastcompany.com/online/19/toxic.html (May 20, 2002).

3. Benjamin Schneider and David E. Bowen, Winning the Service Game
(Boston: Harvard Business School Press, 1995), p. 237.

4. Gustav Metzman, quoted in Ted Goodman, ed., The Forbes Book of Busi-
ness Quotations: Thoughts on the Business of Life (New York: Black Dog
& Leventhal Publishers, 1997), p. 652.

5. Karl Albrecht, At America’s Service (Homewood, Ill.: Dow Jones-Irwin,
1988), p. 27.

6. Steven Greenhouse, “Suits Say Wal-Mart Forces Workers to Toil Off
the Clock,” The New York Times, www.nytimes.com/2002/06/25/
national/25WALM.html?todaysheadlines (June 25, 2002).

Index

Note: Page numbers in italics indicate figures or tables.

Abrashoff, D. Michael, 81, 132, 155–162, evaluation of, by employees and
156 customers, 227

acculturation, 231–232 exceptional, 227
actors, product uniqueness of, 19, 19, 20 interpersonal, see interpersonal
Albrecht, Karl, 338
Alfonso, Michael, 153, 154–155 behavior(s)
Amazon.com, 20–21 negative differentiating, of car
AMF, Harley-Davidson and, 207
AMGEN, 230 salespeople, 289–291
anger, duration of, angry customers and, 53 of managers, 255–257
apathy, 83 negative symbolic, 88
Apple Computer, 236 positive, for customers to see, 238,
Argyris, Chris, 247 240–241
Arthur Andersen, 144, 177, 235 positive differentiating, of car
At America’s Service (Albrecht), 338 salesperson, 287–289
Atchison, Shane, 109–119 of managers, 257–259
attitudes, and behaviors, 7 positive symbolic, 87–88
augmented products, 17–18 symbolic, power of, 205–206
Australia, getting dog into, 169–170 behavioral differences, after September
Autodesk, 230 11, 279, 280
Avon, 21 at Men’s Wearhouse, 179–181
behavioral differentiation, 29–31
baby bell, 89, 195, 197 alignment and, 194
Ballantine, Caroline, 319–320, 327 at Southwest Airlines, 262–295
Bank of America, 86, 87 bell curve of, 48, 70–71, 133, 134
Barlow, Janelle, 80 bottom-up processes and, 241
Barnes & Noble, 20, 21 business to business, 296–331
Barrett, Colleen, 262, 263–264, 266–267, by customer service, 61–64
characteristics of, 7
267, 269–270, 271, 272, 273, 274, 275, companies failing at, cases of, 8–9
279, 292 companies illustrating, lessons learned
Bechtel, 25 from, 333–337
behavior(s), as element of strategy, 227 creating and sustaining of, 332–342
as expression of “you,” 33–56 secret to, 337–339
as powerful diiferentiator, 8, 29–31 engines that drive, 220–261, 225
attitudes and, 7 exceptional, 59, 79–80, 80
business management and, 340 at Men’s Wearhouse, 183–184,
culture and, 223–224
188–189
examples of, 167–168

343

344 Index

behavioral differentiation (continued) Bennis, Warren, 136, 232, 250
negative, 83 Berry, Leonard L., 60
positive, 81–83 Best Buy, 28, 87

fallacy of superiority and, 246 corporate ID of, 86
four types of, 58–94 “Best Companies to Work For,”
gold standards in, 95–131
Hall Kinion and, 299 Fortune list of, 230
inspired leadership of, 168 Betamax, by Sony, 26–27
interpersonal, 58, 79, 133–134 Bezos, Jeff, 21–22
Bjork, Anders, 226
as beneficial to employee and Black & Decker, 26
customer, 80 blame, shifting of, customers and, 251
Bleustein, Jeffrey, 84, 207, 228, 334
as form of intelligence, 71 BMW, 171
positive, in sales, 71–72 Bogart, Humphrey, 151, 152
sensitivity to others and, 70 Bonfire of the Vanities, The (Wolfe), 247
sustaining of, 82 Borders, 20, 21
leadership and, 220–221, 244, 245 Bowen, David E., 249, 336
need to feel cared for and, 136 Bradlees, 28
need to feel informed and, 136–137 brand images, 86–87
need to feel trusted and, 137 brand-name companies, 26
need to feel understood and, 137 brand-name products, 26–31
negative, 47–53 branding, as differentiator, 27
drivers of, 244–252 Brando, Marlon, 207, 209
examples of, 49–50 Bresler, Charlie, 183–184, 184, 185,
operational, 58, 60–64, 61
as reflection of values and attitudes of 188–190
Breuche, Ron, 128
company, 68–69 Brombaugh, Charles, 124
consistent and sustainable, 69–70 Browder, Jack, 53
negative, 67–68 Brown & Root, 53
normal employee actions as, 60–61, 61 Brunetière, Ferdinand, 332
positive, 61–63 Budget Rent-a-Car, 85–86
opportunities for, 8 business, challenges of, 6
policies, systems, and processes creating,
237–244 marketing question for, 6
positive, 38–46 business management, products and,
as difficult to imitate, 53–55
creation of, 40–41 339
process of, 223–224, 237–244 business schools, focus of, 222
symbolic, 58, 84–91, 91, 205–206, buyers, as free and fickle, 3
208–209, 210–211 Byng, Herman, 127–128
alignment of messages and behavior Byrne, John, 144

in, 85 cable companies, 251
establishment of, 87 Caine Mutiny, The, Wouk, 151–153, 152,
external, 89–90
internal, 85–89 154–155
negative, 88–89 Campbell, Jeremy, 13
positive, 87–88 car salesperson, customer expectation of,
ways to create, 57–94
why one should care about, 339–341 280–285, 286–287, 291
behavioral differentiators, relationships negative differentiating behaviors of,
among, 91, 91–92, 227–229
benchmarking, in mid-1990s, 2 289–291
study (1995) of use of, 2 positive differentiating behaviors of,

287–289
Carlzon, Jan, 24, 58, 224–227, 229, 334
Carnegie, Andrew, 153

Index 345

Centrex Construction Group, 30 demanding, handling of, 83
Champy, James, 121 differentiating of Hall Kinion with,
Chanel, 26
Charan, Ram, 223 308–310
Charles Schwab, 28 expectations of, of car salesperson,
CH2M Hill, 236
Chuck-E-Cheese, 135 280–285, 286–287, 291
Cialdini, Robert B., 44 of lawyers, 36
CIPRO, 19 of managers, 252–255, 252–259
Cisco Systems, 28 range of, 47
Citicorp, 25–26 understanding of, 36–38
Citrin, James M., 332 goals of, presentations aimed at, 8
coaching of employees, 235 in perfectly orderly market, 13
Coca-Cola, 26, 86 interactions with, 58–59
cognitive dissonance, 35 serving of, as you would like to be
Colvin, Geoffrey, 223, 279 served, 337
Comfort Inn, 85–86 shifting of blame and, 251
committee board, 240 thoughtfulness and consideration for, 42
communication(s), behavior as form of, customer relations, Men’s Wearhouse and,
179
10, 34–35 customer relationship management system,
by environment of business, 35 of Ritz-Carlton Hotel Company, 108
internal, 229–230 customer satisfaction, importance of, 36
company(ies), and products, lack of Ritz-Carlton and, 99
distinctions between, 14 customer service, behavioral differentiation
positive differentiation by, importance by, 61–64
employees’ responsibilities and, 83–84
of, 55 customer service/after-sales service, 23–25
Compaq, 120, 222
Competitive Strategy (Porter), 28 Davidson, Arthur, 207
competitors, differentiation from, behavior Davidson, Willie G., 5, 334
de Roos, Daan, 327
and, 34 Deford, Frank, 150
complaint departments, on World Wide Dell Computer, 20, 28, 222
Demarest, Lynette, 242, 243
Web, 48 Deming, W. Edwards, 1
complaints, about companies, World Wide Diagnostic and Statistical Manual of

Web and, 47 Mental Disorders, Fourth Edition, 245
computers, handheld, 14 Dickson, Randy, 98
Conover, Donna, 271 Differentiate or Die (Trout), 2
Container Store, The, 230 differentiation, advantages for sellers, 4
Cooper, Gary, 151
corporate citizenship, 172 difficulties in creating and sustaining, 4
cost leadership, 28 domain(s) of, 18–31
Crane, Frank, 278
Credit Suisse, 86 behavior as, 29–31
Crosby, Philip, 1 brand as, 26–27
culture, behavior and, 223–224 breadth of offerings, 25–26
Cumes, James, 247 customer service/after-sales service,
Cunningham, Harry, 69
customer(s), angry, duration of anger and, 23–25
distribution as, 20–22
53 low price as, 28–29
caring about, creating perception of, 41 product market segmentation as,
customization of product/service for, 42
delivery of extra services to, 42–43, 22–23
product uniqueness as, 18–20
51–52 size/market dominance in, 27–31

346 Index

differentiation, advantages for Enterprise Rent-A-Car, 22, 23, 30
sellers (continued) entropic action, of markets, 13–15, 14
entropy, definition of, 13, 223
dynamics of, 15–18 environment of business, communication
through behavior, see behavioral differ-
by, 35
entiation EPC firms, 25
Discipline of Market Leaders, The (Treacy
benefits offered by, 25
and Wiersema), 125–126 Evans, Larry, 33
Disney, 26, 58, 86, 101 exceptional values, 167–192
Disraeli, Benjamin, 197 Exxon, 250
Dones, Mario, 103 Exxon Valdez, 250
Donovan, Carter, 95–96
Douglas, Michael, 248 Fabled Service (Sanders), 24, 43, 142, 223
Douglas MacGregor, Revisited: Managing Fagan, Pat, 127–128
Farmer, Tom, 109–119
the Human Side of Enterprice (Heil, Fast Company, Sanders, 163, 334
Bennis, and Stephens), 232 Federal Express, 85–86
Drive: Leadership in Business and Beyond Finova Group, 230
(Viney), 221 Fitzgerald, Catie, 310
Drucker, Peter, 12 Flagg, Michael, 322–323, 326
Dunlap, Al, 134, 142, 143–145 Fluor Corporation, 25, 87
Fonda, Peter, 209
Easy Rider, 209 Ford Motor Company, 86, 171
Eckerstein, Sven, 175, 176 Frames of Mind, Gardner, 85
Edison, Thomas, 230 Freiberg, Kevin and Jackie, 266
education, corporate, 235 French, Jay, 150
Edward Jones (brokerage firm), 230
Egan, Richard, 119 Gabrielsson, Assar, 171, 173
Eichmann, Adolf, 217 Galford, Robert, 320
Eli Lilly, 86 Gardner, Howard, 71, 85
Elkins, Greg, 239 Gardner, John, 314, 320
emblems, business, to create image, 85–86 Garrison-Jenn, Nancy, 321
EMC Corporation, 119–128, 137, 167, 232, Gates, Bill, 153
Gateway, 25
237, 251, 333, 335, 336 GE Capital Consumer Finance, 25
and customer service as investment, 122 Gehrig, Lou, 151
change control by, 125–126 General American Telecom (GAT), 193,
differentiation by, 120–121
global service deployment by, 122–123 197, 199–200, 202–206, 203, 337
Intelligent Contact Management System General Electric Company, 2, 86, 235, 236,

of, 123 241–242
measurement of customer satisfaction by, generic products, 15–16
Geoghan, John J., 211, 217
126 George, Robert, 95, 102, 106, 109
phone-home capability and, 123–124 Gerstner, Lou, 248–249
preparing for Olympic games, 169 Ghandi, 334
product support engineering lab of, 123 Gillette, 26, 239, 240–241
resolution of customer problems by, 122, Gleick, James, 13
Glickman, Jeff, 307, 313–319
124 Global Crossing, 177
saving customers’ businesses after 9/11, Gluten-Free Pantry, 26
Goethe, 173
127–129 Goldman Sachs, 26
unique services model of, 121–129
Emerson, Ralph Waldo, 1, 135, 193
Emotional Intelligence (Goleman), 71, 78
Energizer Bunny, 85
Enron, 101, 177, 217, 248, 332

Index 347

Goldsmith, Sir James, 143 Holiday Rambler of, 222
Goleman, Daniel, 71, 72, 78, 81, 137, 146 motorcycles produced by, classic retro
Goodnight, James, 229–230
Goodwill, creation of, 83 look of, 5, 5
Goodyear, 86 competitive differentiation of, 5
Gordon, Ian, 7, 10 in early 1960s, 4
Gottman, John, 53 today, 5
Grand Union, 28 organization of product owners, 208–209
Grayson, Kent, 36 products licensed by, 208
Great Escape, The, 209 support to dealers and suppliers of, 209
greed, institutional, 248 vision and values of, 207–208
Green, Charles, 320 Harley Owners Group (H.O.G.), 208–209
Greenleaf, Robert, 158, 182, 229 Hauck, Frank, 169
Gregor, Joie, 321–322 Hazell, Rita, 301, 304
Grove, Andy, 236 Heidrick, Gardner, 314
Guilfoyle, Ultan, 209 Heidrick & Struggles, 30, 167, 169–170,
Gwin, Bonnie, 320, 326 232, 314–329, 324, 333, 336, 337
and caring as way of being, 326–329
Hall Kinion, 30, 167, 168, 232, 297–314, availability for clients and candidates, 320
335, 336, 337 behaviors of consultants and, 325–326
behavioral differentiators at, 315–318 executives at, value of candor by, 321
differentiating of, with customers, relationships with clients and, 386
308–310 sense of responsibility at, 326–327
differentiation strategies of, 300–303 visionaries of total human capital man-
hand delivery of paychecks by, 305–306, agement, 323–326, 324
306 Heil, Gary, 136, 232, 250
hiring of employees by, 303–304 Heineken, 26
NASCAR race car sponsorship by, 313, Helmsley, Harry, 143
313 Helmsley, Leona, 134, 142–143, 145
recruiting consultants and candidates, Hemp, Paul, 333
304–308 Hertz, 22, 23
Star Contractor program of, 306 Herwald, Kurt, 264
stock options and, 307–308 Heskett, James, 232–234, 237
theme of, 299 Hidden Value: How Great Companies
treatment of consultants by, 306–307 Achieve Extraordinary Results with
Ordinary People (Pfeffer and O’Reilly),
Hall Kinion University, 310–314 266
education and skill development by, 311 Home Depot, 25
training of employees at, 311–313 Hopper, Dennis, 209
youthful energy at, 312–313 hotel(s), business, 17
complaint about, PowerPoint
Hampton, Nerissa Morris, 173, 174 presentation of, 109–119, 110–118
Hanna, Jim, 193, 199, 200, 204 Humana, 85–86
Hansen, Kimberly, 194–195, 196, 197, 203, Huxley, Thomas Henry, 341

204–205, 206, 337 Iacobucci, Dawn, 36
Hanson, Lee, 318 IBM, 28, 120, 222, 248
Hardin, Bill, 132–133 image, projected by company, 233
Harley, Bill, 207, 220–221 In Search of Excellence (Peters and
Harley-Davidson, 26, 30, 84, 87, 173, 220,
Waterman), 332
228, 234, 313, 333, 334 Influence: The Psychology of Persuasion
and experience business, 206–210
as symbol of unique experience, 209 (Cialdini), 44
clever marketing by, 208 Inghilleri, Leonardo, 95, 105
customer loyalty to, 208

348 Index

innovation, as crucial, 3 Larson, Gustaf, 171, 172, 173
innovation/imitation cycle, 14 Lasker, Emanuel, 262
institutional greed, 248 Law, Cardinal Bernard, 211–216, 217
institutional insularity, 248–249 Lawrence, T.E., 193
institutional narcissism, 245–247 lawyer(s), customers’ expectations of, 36,
institutional scapegoating, 250–252
institutional schizophrenia, 249–250 37–38
insularity, institutional, 248–249 negative differentiating behaviors of,
Intel, 236
Intel Pentium chips, 19 51–52
Internet, information for buyers on, 4 positive differentiating behaviors of, 44,
Internet auctions, 4
interpersonal behavior(s), average, 138, 139 45–46
Lay, Ken, 332
bell curve of, 138, 139, 140 leader(s), above the norm, 226–229
negative, 138–139, 140, 141
positive, 139–141, 142 behavior as symbolic, 227, 228
interpersonal relationships, problems with, conviction and courage and, 226
146 presence as symbolic, 228
intimacy, fake, 24–25 servant, 229
Isom, Troy, 301 leadership, behavioral differentiation and,
220–221, 224, 244
Jerry Maguire, 54 Lepoutre, Emeric, 319, 326
behavioral differentiators and, 54–55 Lessons from the Top: The Search for
America’s Best Business Leaders (Neff
Jeter, Derek, 150 and Citrin), 332
Johnson, William C., 132, 220, 264 Levitt, Theodore, 5, 12, 15, 33
Jones, Chipper, 150 total product concept of, 15–16, 16
Juran, Joseph, 1 Lexus, 171
liking, factors influencing, 44
Källbäck, Charlotta, 172 Loesch, Robert, 195–196, 198, 199,
Kane, Ed, 239–240 204–205
Kawasaki, Guy, 3 logo, business, to create image,
Kaznova, Brian, 98 85–86
Kelleher, Herb, 29, 31, 55, 158, 220, 221, Lombardi, Vince, 102
Lombardo, Michael, 146
227, 228, 233, 237, 262, 263, 267, 268, Lyons, Kathie, 169, 170
271, 273, 320, 334
Kincer, Joanne, 250–251 Maister, David, 42, 57, 136, 320
kindness, random acts of, 132–166 Malone, Tom, 128
King, Rollin, 263 Mamet, David, 333
Kinion, Todd, 298, 304, 363 management, expert, failure to
Kmart, 28, 69
customer service at, initiatives to demonstrate, 9
managers, customers’ expectations of,
improve, 8
Koch, Ed, 143 252–255, 252–259
Kohl’s, 28 negative differentiating behaviors of,
Kotter, John, 232–234, 237
255–257
Labattaglia, Gina, 194 positive differentiating behaviors of,
Lands’ End, 23
language, to communicate with market, 14 257–259
laptop computers, customer expectations of, Marino, Roger, 119
Marketing Imagination, The (Levitt),
16–17
market for, 17 15, 16
marketing question, for business, 6
markets, entropic action of, 13–15, 14

noise in, 13–14
perfectly orderly, customers in, 13

Index 349

Marks & Spencer, 86 narcissism, institutional, 245–247
Marmion, Piers, 319, 321, 325, 328 Neal, Jeffrey, 300, 301, 302, 303, 305, 308,
marriages, research on, 53
Marshall, K.C., 160 309, 310
Marshall Field’s, 21, 30, 39–40, 58, 188 NEC’s Packard Bell, 28–29
Mary Kay, 20, 21 Neff, Thomas J., 332
Maslow, Abraham, 325 Neiman Marcus, 30
Maul, Dianna, 80 New York Central Railroad, 338
McCauley, Cynthia, 146 NIKE, 26, 230
McDonald’s, 27, 28, 135 Nixon, Richard, 217
McKinsey & Company, 86, 230, 235 noise, in market, 13–14
McLean, Bethany, 101 Nordstrom, 23, 24, 30, 58, 188
McQueen, Steve, 209
Medarbetarskap, value of, 171–177 exceptional service by, 167
Mene, Pat, 98, 102, 106–107 Normann, Richard, 268
Men’s Wearhouse, 23, 30, 58, 158, 171, Northern State College and University Sys-

177, 179–181, 228, 229, 232, 233, 239, tem, 193–194, 195–196, 198, 199, 201,
269, 333–334, 335, 337 202, 203, 204, 204–205
as values-driven organization, Nuts! Southwest Airlines’ Crazy Recipe for
Business and Personal Success (Freiberg
182–183 and Freiberg), 266
behavioral differences at, 179–181
building of exceptional relationships by, Office Depot, 22, 26
Office Max, 26
183 Olsson, Hans-Olov, 172
customer relations and, 179 one-stop companies, 25–26
exceptional behavioral differentiation at, operating policies and practices, standard

183–184, 188–189 company differentiation by, 91
professional tailoring at, 180 Oracle, 177
relationship training at, 183 O’Reilly, Charles A., 266
relaxed atmosphere at, 180 Ostrom, Amy, 36
representing of customer by employees, Overcash, Jay, 239, 240–241
Ozley, Lee, 234
187–188
rewards program of, 180–181 Packard Bell, 28–29
vendor-customer relations and, 186 packing of product, poor, 9
wardrobe consultants at, 178, 179, Paley, Bill, 328–329
Palm products, 14
180 Parker, Jim, 271, 273, 279
Web site of, 181–182, 183 Peabody, Francis W., 35
Mercedes-Benz, 26, 171 Pearlman, Jeff, 149–50
Metzman, Gustav, 338 Perez, Ignacio, 319
Microsoft, 26, 27, 177 perks, as bribes, 230
Microsoft Windows, 19 personality disorder, narcissistic, 245
Milijasevic, Natasha, 102 Peters, Thomas J., 332
Milosevic, Slobodan, 217 PETsMART, 22
money-making, as goal, 248 Pfeffer, Jeffrey, 54, 220, 229, 266, 332
Montgomery Ward, 8, 28 physician, appearance of, communication
Motorcycles, Harley-Davidson, see
Harley-Davidson, motorcycles by, 35–36
produced by interest in humanity of, 36
innovation and imitation in, 6 office of, communication by, 35
Japanese, 6 Picciuti, Tony, 127–128
Japanese and German, retro look of, 6 Pleshette, Suzanne, 143
Muse, Lamar, 264 Porsche, 26, 86
Mutiny on the Bounty, 151

350 Index

Porter, Michael, 4, 23, 28 employee orientation and continuing
potential product, 18 education by, 102–103
PowerMatch, 309–310
Prall, Jon, 124 exceptional customer care in, 105–106
price, business management and, 340 gold standards of, 99–109, 100
Pricewaterhouse-Coopers, 86 important proposal at, 168–169
process(es), 224, 237–244 measurements of performance and,
Procter & Gamble, 26, 27, 48
product(s), augmented, 17–18 107–109
meticulous management of, 109
brand-name, 26–27 operational behavioral differentiation at,
business management and, 339
expected, 16, 17 84, 97
generic, 15–16 quality improvements and, 107–108
potential, 18 recruiting and selection by, 102
product differentiation, 2 responsibilities of employees of, 238
product uniqueness, of actors, 19, 19, 20 senior property leaders of, orientation
Prudential’s “rock,” 85
and, 103
Qualcomm, 230 survey of employees by, 108–109
Quik Lube, 85–86 teddy bear lost at, 95–96
tracking of defects during regular
REI, 22
Reitz, Walter, 126 operation, 107
relationships, importance of, 9–10 Roberts, Julia, 19, 19, 20
religious leaders, consumer expectations of, Roche, Gerry, 169–170, 320, 326, 328
Rockefeller, John D., 153
210–212, 212–213 Rocker, John, 134, 147–148, 148
misconduct by, 211 Rodman, Dennis, 147
negative differentiating behaviors of, Rogers, Wilson, 217
Rogge, Joyce, 268, 269, 271, 272, 276
215–216 Rosenblum, Martin Jack, 207
positive differentiating behaviors of, Ruettgers, Michael, 121, 126, 227, 229, 237
Ryback, David, 182
214–215
Rhodes, Brenda Hall, 296, 297–298, 299, Saks Fifth Avenue, 21
salespeople, behavioral impression created
301, 307
Rhodes, Jesse, 298 by, 40
Rich Urban Bikers (RUBs), 209–210 responses to, 53
Richards, Wes, 296, 323–324 Sanders, Betsy, 24, 43, 132, 142, 223
Rite Aid Drug Stores, 239, 240 Sanders, Tim, 155, 163
Ritz-Carlton Hotel(s), 23, 83, 84, 137, 167, SAS Institute, 229, 230
Scandinavian Air System (SAS), 23, 24, 29,
220, 222–223, 228, 232, 233, 236, 237, 30, 58, 224, 225–226, 333–334, 335
269, 313, 333, 334, 335, 336, 337 scapegoating, institutional, 250–252
anticipation of guests’ needs in, 96 Scheeler, Bob, 158
as customer-centric company, 119–121 schizophrenia, institutional, 249–250
authority to resolve problems in, Schneider, Benjamin, 249, 336
Schulze, Horst, 98, 108, 220, 221, 222–223,
105–107 227, 229, 233, 334
awards won by, 97 Schwarzenegger, Arnold, 20
behavior in extraordinary ways and, 98 Scott Paper Company, 143–144
behavior of employees toward each Sears, 49
Selig, Bud, 150
other, 101 seller, behavior of, as influence on
customer relationship management customer, 47
Senge, Peter, 1, 300
system of, 107–108
customer satisfaction and, 99
daily lineups of, 104–105

Index 351

servers (restaurant), behaviors or attitudes Spector, Robert, 167
of, noted by customers, 78 staff, difficulty in molding, 146
customers’ expectations of, 65–66 Stallone, Sylvester, 20
negative differentiating behaviors of, 64, Staples, 22, 26
76–78 Star Trek: The Next Generation, 12
normal or expected behaviors of, 64 Starbucks, 22, 26
positive differentiating behaviors of, 64, State Farm Insurance, 236
73–75 Steinberg, Dennis, 194–195, 197, 203
Steinitz, William, 308
ServiceMaster, 23 Stephens, Deborah C., 136, 232, 250
sexual harassment, 145–146 stock options, Hall Kinion and, 307–308
Shanley, Reverend Paul, 211–216, 217 Story, Calvin, 194, 197, 203, 205
Sharper Image, 85–86 Stovall, Don, 194, 197, 198, 203, 204
Silman, Jeremy, 1, 12, 57, 167, 337 Street, Jermyn, 50
Silverman, Craig, 168 Struggles, John, 314
Simon, Randall, 150 Studi, Denise, 327
Singer, Barbara Spencer, 147 Sullivan, Rear Admiral Paul, 153
Skilling, Jeff, 101 Sunbeam, 143–144
skills, as learned, 228 Super Value Stores, 85–86
Slater, Robert, 2 Sutton, Robert I., 54, 220, 332
slogans, business, to create image, 86–87 symbols, business, to create image, 85–86
Smith, Sean M., 20
Snap-On, 20, 21 Talbots, 26
Snelling and Snelling, 298 Talkington, Andy, 320
Sony, 26, 27, 86 Target, 28
Southwest Airlines, 23, 29–30, 55, 158, Tartakover, Savielly, 119
team, failure to present unified behavior,
167, 220, 232, 262–295, 313, 333–334,
335, 336, 337 8–9
as profitable, 265 Tedlow, Richard, 153
behavior toward employees and Teerlink, Rich, 230, 234
Things Change, Mamet, 333
customers, 266–267 Thorstensson, Thord, 319, 320
behavioral difference, after September Tilles, Seymour, 15
Timberland, 230
11, 279–280 total product concept, of Theodore Levitt,
behavioral differentiation at, 266, 280,
15–16, 16
281–285 Toys-R-Us, 22
business model of, 263 Treacy, Michael, 125–126
Culture Committee of, 275–279 Trout, Jack, 1, 2, 3, 5, 12, 170, 263
firsts of, 265 Trusted Advisor, The (Maister, Green, and
Freedom Planner of, 270
from customer loyalty to customer Galford), 320
Tucci, Joe, 121
advocacy of, 277–279 Tupperware, 21
hire for attitude, train for skill at, 269
hiring at, 269–271 USS Benfold, 155–162
in customer service business, 267, 269 USS Florida, 153
leadership bench strength at, 271
letters to customers, 272 values, exceptional, 167–192
living the Golden Rule, 273–275, 274 shared, 232
NYSE ticker symbol of, 262, 272
places in the heart and, 272–275 van Goethe, Johann Wolfgang, 33
response to 9/11, 279, 280 Versace, 26, 86
spirit of, 268 Viney, John, 221
theme planes of, 264
“warrior spirit” of, 263

352 Index

Volk, Spencer, 144 Walton, Sam, 31, 69, 220, 221, 237, 238
Volvo Cars, 167, 171–173, 232, 233, Waterman, Robert H., Jr., 332
Webber, Alan M., 334
333–334 Weinstein, Art, 132, 220, 264
all employees close to manufacturing Welch, Jack, 1, 2, 145, 236, 241, 244
White, P. Newton, 144
process at, 173–174 Why Marriages Succeed or Fail (Gottman),
as unique buying experience, 175–176
behavioral differentiation at, 171, 53
Wiersema, Fred, 125–126
172–173 Wild Ones, The (Trout), 5, 209
customer satisfaction as priority of, Williams-Sonoma, 22
Winning the Service Game (Schneider and
176–177
direct connection with buyers, 173, Bowen), 249
Wolfe, Tom, 247
174–175 work-outs, customer, at General Electric,
high mileage club of, 171–172
history of, 171 241–244
quality, safety, and environmental care World Wide Web, complaint departments

by, 172 on, 48
self-consciousness about behavior at, 175 complaints about companies and, 47
social responsibility of, 172–173 Wouk, Herman, 151

Wal-Mart, 22, 23, 27, 28, 30, 31, 58, 69, Yellow Pages, 89–90
220, 238, 340
cost leadership by, 28 Zimmer, George, 158, 177, 178, 179, 182,
customer service at, 8 185, 187–188, 189, 221, 227, 228, 229,
233, 334
Wall Street, 248
Wall Street Journal, 19
Walton, Joseph, 120, 125, 125, 127