Hospitality in Every Business?

Danny Meyer was provocative in a recent leadership summit. He said that every business needs to include hospitality in their offering. He also stated that excellent or perfect technical execution, including service elements, only gets you 49% of customer loyalty whereas the other 51% is hospitality--that ability to communicate "we're on your side". In his book, Setting the Table, hospitality is the art of making one feel important and wanted.

"...nothing else is as important as how one is made to feel in the business transaction. Hospitality exists when you believe the other person is on your side...Hospitality is present when something happens for you. It is absent when something happens to you. Those two prepositions--for and to--express it all...Service is the technical delivery of the product. Hospitality is how the delivery of the product makes its recipient feel. Service is a monologue...Hospitality, on the other hand, is a dialogue. To be on the guest's side requires listening to that person with every sense [editor's emphasis here], and following up with a thoughtful, gracious, appropriate response. It takes both great service and great hospitality to rise to the top."

Service only gives you an advantage for two minutes, and it can be copied by others. What can't be taught but can be modeled and celebrated is empathy, the listening with all senses. "Customers aren't always right, but they always want to be heard," Meyer says. And when mistakes happen, he runs the A's:

• Awareness of the mistake
• Acknowledgement
• Apology
• Action
• Application of additional generosity

Meyer is in a high turnover business--restaurants. His principles can be/should be applied to our employees. They always want to be heard. In fact, Meyer says, the organizational leader is like a skipper in the stern of the boat; he/she has to listen to the people on the bow, on the front lines regarding the conditions of the business. If you apply hospitality within your organization, you will have high engagement. People join organizations but they leave bad managers. A leader who can make the employees feel  heard, valuable because of their contribution, help them to be better contributors and as people of intelligence and talent will have employees who want to be at work.

Keeping an Edge

Hunger in Paradise is a great, short read...because the author explicitly hates "long, dry, repetitive business books of 400 pages". You're learn more about Outcome Bias: we're successful therefore what we're doing must be wonderful (rather than actually studying everyone who does those same things and seeing what the probability of success really is) and how business success is a lot like soccer/football goals (rare and random).

You'll also learn the importance of evolving: Change it even if it's not broken. And not resting on your laurels: remember that key phrase from stock prospectuses "past performance is no guarantee of future results".

In the book, the author, Rasmus Ankersen, notes poor examples like Nokia and good examples like Lego. Lego recognized that their competition was more than other toy manufacturers; it was anyone vying for a person's leisure attention and money. Nokia tried to realize the competition--Apple's iPhone--was leapfrogging them but they couldn't get over the fact that their phones were indestructible.

In reading the book and listening to a presentation at a recent leadership summit, other examples came to mind: Microsoft used to be on 90% of all digital devices; now they're on less than 20%. They were so focused on trying to beat Apple, according to Simon Sinek talking about his new book Infinite Game at the same leadership summit, they lost track of the marketplace. Meanwhile, could Amazon be in danger of thinking they've clearly beaten the competition and can rest on their laurels? They 'own' 50% of online retail while the next largest direct competitor, eBay, has 7%. However, Amazon only has 5% of all retail. Is this why they're acquiring and building 'brick-and-mortar' stores?

Also, adaptation is really important. In another book, Mission Drift, Wells Fargo is discussed. They used to be dominant in the 'logistics' field of moving goods, mail, people via stagecoaches. As other stagecoach companies died when railroads grew, Wells Fargo survived...because they adapted even though they maintained a focus on their mission of connecting people, money and goods (...and cheating a bit if you follow the scandals).

Recently, I had a conversation with a few business owners in which I related some of these same principles, learning from everyone I come in contact with. In describing my career and some business practices I highly endorse, I said, "I can only say these things have worked for me. One of the things we don't know is that we hear about the 100 successful companies using these techniques but we don't hear about the other 2,900 perhaps that used those same techniques and fell on their face. They've worked for me." Maybe because of luck--my shot actually went in the goal--or personality or attitude or combining this-with-that or the level of collaboration instilled in the organizational culture or drawing out the best in everyone on the team or... So we know these things in Hunger in Paradise worked for Lego...and me...but do ask the tough questions and take the advice with a grain of salt.