Book Review Built to Serve

8/8/2019 Book Review Built to Serve

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Creating High Performance Organizations (CHPO) Book Review FINAL REPORTTitle: Built to Serve; How to drive the Bottom Line with People-First PracticesAuthor: Dan J. SandersEdition & Issue: Tata McGraw Hill Edition, 2008

Sivakumar S (2008138)

Introduction to the Book

Built to Serve is a world famous book authored by Dan J. Sanders, the CEO of the award-winning (Winner of the National Torch award for Marketplace ethics), service-oriented USSupermarket chain called United Supermarkets. This book was first published in 2008 and is235 pages long. The foreword for the book was written by none other than the legendary

Leadership guru Stephen Covey.

This book is considered path-breaking because it calls for a radical business transformation to

break-away from the continued pursuit of profit-price model. Instead it advocates companies

to focus on creating a culture of service orientation among the employees. Everyone in the

business world agree that people-centric work culture is very important, but many simply see it

as a means to attain the end of superior financial results. The author disagrees with this

concept, but instead asks one to treat all stakeholders (including the firms customers) as

partners and continuously track how well their needs are being served. Financial results maysatisfy some of the stakeholders, but the cost of maximizing that aspect can adversely affect

the interests of other stakeholders. Dan Sanders describes the challenges of the global,

digitized economy of the 21st century and advocates a people-centric business model. He goes

on to state that the true DNA is that we are built to serve.

He sets the foundation of the book on the cornerstone of acceptance that organizations

that make people and service their cornerstones of corporate identity enjoy sustainability over


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CHPO Book Review Proposal Built to Serve

PGSEM2008 - Iimb.ernet.in Roll # 2008138 Page 2 of 16

the long term[21]. He then goes on to quote several well known organizations like Southwest

Airlines, NASA, Air Force One, and Watergate and some not so well-known organizations from

the South USA and Midwest as examples to illustrate his point. He also draws extensively from

his personal experience of having served in the Armed forces, his childhood upbringing in the

ranches of Texas, his Christian religious background and the sports icons and games he

personally relates to from his college days. However the bedrock of his argument stems from

the success of United Supermarkets, a 90 year old company with humble origins in the South.

Introduction to United Supermarkets & the Author

United Supermarkets as an organization was founded in 1916 by H.D. Snell Senior in Oklahoma

and today has 75+ stores spread over states like Oklahoma and Texas. They serve

approximate 1 million customers every week. This companys mission is defined by 6 simple,

yet powerful words Ultimate Service, Superior Performance, and Positive Impact to the societyit serves. They pride themselves as being different from the world where supermarkets are

continuously trying to find ways to cut costs and survive, but instead they have created aculture-driven, people-centric business that they believe is their key to sustainability and

success. A simple illustration of their organizational culture is they dont refer to their visitors

as customers, but as guests. They believe personal attention and personal touch paid by their

frontline staff is of paramount importance to deliver superior performance.

The author Dan J Saunders, who is the CEO of United, comes from an armed service

background. He was an Air Force U-2 reconnaissance pilot and a highly decorated officer

during his service tenure. He was a principal partner in Adplex and cofounder of Adcontent,

which are companies in the content management and marketing promotion space.

Book Review Executive Summary

Dan Sanders urges organizations to put their greatest asset - people in the centre of their

strategy. He makes a bold claim that once you create a culture within the organization which

enables and empowers people to realize their potential, performance will automatically follow.

He says such a people-centric organization is the one that can sustain itself over long-term and

quotes several examples of organizations which have fallen prey to this trap.

The core values/beliefs of United Supermarkets as a company and that of Sanders as the CEO,that we can infer from various sections of the book are:- They believe all organizations require technical competence and product innovation to

survive. But for it to be sustainable and realize its full potential, it has to put its greatest

asset, people in the centre of the strategy.

They believe that profits are not the reason for a firms existence, but are a consequence ofsuperior performance. They believe service to the community it serves is the purpose of

the organization.


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They believe sustainable organizations balance the short-term interests of theorganizations people with long-term interests of organizations purpose.

They believe numbers and past data are good indicators of how well an organization hasperformed, but to forecast the future, one needs to understand the organizations potential.

This potential by their description is a subjective figure which is the sum total of the talent

of the people eventually put to play [14]. Hence they recognize culture as a key catalyst that

drives conversion of this potential.

They believe sustainable people-centric, service-oriented culture can be created bycommitted leadership in the top, which walks the talk. They say Leaders actions, not

words form the basis for learningand eventually its culture[34].

They believe top leadership has to place highest regard for its people and also deploy equalcare in recruiting, hiring and training its staff to ensure synergy in working to this mission.

They believe people-centric cultures are focused on marketing the work and not onadvertising what needs to be done [12]. This is their way of creating an Expectancy theory

linkage of the task a person in the ground does, to the larger purpose of the organization.

The above beliefs are in-sync with what marketing researchers call the customer intimacy

value positioning adopted by United Supermarkets. The strategy literature recommends

companies adopting this discipline, to empower people facing the line to continuously do what

is right for the customer and thereby develop a sustainable competitive advantage. Uniteds

strategic decisions like care on recruiting the right kind of people, fostering a homogeneous

culture within the organization and consciously limiting the growth ambitions are also in-sync

with this strategy. This strategy is typically adopted by Service industry firms that put a

premium on understanding and serving customers stated and unstated needs which is a

description that fits United Supermarkets pretty well.

The key Practises that he recommends for People-Centric organizations are:-He asks organizations to put people ahead of profits in both spirit and action. He calls

this a higher math, because profits are only one part of the impact, an organization

creates over its stakeholders.

He asks organizations to develop a culture where their front-line staff are encouraged to

develop an emotional connect with their customers. He recommends organizations to

develop their people practices like recruitment, training, career progression,

compensation, rewards & recognition around this central theme.

He says leaders can only delegate authority, but not the responsibility. Hence leaders

have to surround themselves with talented people and listen to them.

He says leadership is about Servanthood (quoting from Christian religious literature) and

it is about helping people around you realize their potential. He says Servanthood is only

a starting point, and it should mature into friendship over time.

He holds the Leader responsible for identifying and acting on disenchanted team

members within the organization. The leader should either convert them back into


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active players by realigning them to the organizations purpose, or weed them out

quickly before they create disturbance within the organization.

He emphasises the importance Simple & clearly articulated Vision and Mission statement

of an organization. He urges Leaders to use them as beacons to navigate the

organization at times of adversity. He also emphasises the importance of continuous

communication of the Vision so that people stay connected with it all the time whatever

work they do day-to-day.

He urges leaders to be grounded to the organizations Vision and Values, and curb

aggressive pursuit of growth or profits beyond the potential of its people.

He breaks the myth of compartmentalized existence in American culture and says

personal and professional lives of employees are inseparable. He urges leaders to

understand every person holistically and enable him/her to realize their potential.

He says decision making needs to go beyond simple spreadsheets and a leader needs to

balance 3 buckets of information viz. Buyers intuition (or) customers purchase profile

and propensity, Seller Intuition of what sells and what doesnt, and hard empirical data

of market research or past performance.

He says Management begins and ends with People and Partners. Process happens in the

middle and performance follows. He suggests a 4P framework of People, Process,

Partners, and Performance as the right order to prioritize and focus attention.

He asks hails humility as a key character of a leader and urges them to serve as good

role models for people within the organization. He cautions that pride of what has been

achieved in the past can destroy an organization, if humility about the open future is not

appreciated.

These points are insightful and interesting, especially because they come from a CEO who has

put them to practise and has achieved great heights with United Supermarkets. Sanders

narrates both the practices and the results in sufficient detail to establish credibility in the

minds of the readers. His points cover a wide spectrum of functional topics, right from strategy

formulation to execution, from finance to operations, and from marketing to human resource

development. However all the points are coherent and consistent with the central theme of

putting people first i.e. by focusing on the human side of both employees and customers.

The key messages from this book are not radically new because they are already published by

several researchers in literature pertaining to the individual business functions. The non-united

examples he quotes like South West Airlines or NASA have been thoroughly analyzed by several

researchers and have been used to drive home the same point. Some of the not-so-well-known

examples he quotes from Texas local context have equivalents that come to ones mind within

every major state. However the practical insights he brings from having successfully

implemented them in United and the integration of several functional strategies around the

central theme of running a people-centric business are the key take-aways from this book.


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The style of writing followed by Sanders is simple and coherent, and is one of the reasons why

it resonated so well even with the general audience who do not have a business education

background. The division of book into 3 parts i.e. the 1st part focusing on beliefs and values

that needs to be kept in mind when forming an organization, the 2nd part on strategy

formulation or creating a business foundation, and the 3rd part on actual strategy

implementation is logical and aids better understanding.

He frequently quotes his personal experiences from having served in the Air force or from his

upbringing in rural Texas. In some of the places in the book, these examples are very effective

like General Petersons remark about Leaders being only able to delegate authority and not

responsibility [55]. In some other places they appear to be mere inserts resembling more an

autobiography without adding much value to the business context E.g. His illustration of 3

personal experiences about the importance of people [167].

He cites Tiger Woods as a case of humility [223] and selflessness and as a true role model for

people. Given the recent controversies that have since emerged around Woods, this portion

appears funny in hindsight.

He breaks several paradigms about American Organizational culture, including fast-track career

growth, excessive materialistic domination in compensation, compartmentalized lifestyle and

professional behaviour. For readers from India this is a confirmation of well-entrenched

beliefs from the eastern philosophy and practises from the Indian Social culture and traditional

Indian family-run businesses. These points are however significant and are an important insight

for leaders of Indian service firms who sometimes ape American organizational practises

without understanding their limitations.

Sanders breaks the political correctness and secularism taboo by liberally quoting concepts

from the Bible like Servanthood, Ministry etc. This can be a risky proposition when reaching out

to global audience. He has over-emphasized the importance of spirituality at times, for

example in the context of ethical decision making, and attribution of Gerard Fords decisions

Post Vietnam War. However the spirit of his statements are certainly valid, and eternal moral

values like humility, care for fellow humans are some of the things that we see often missing in

the business world. This book gives a wake-up call to restore those moral values in our

professional values, as much we celebrate them in our personal lives.

Over-all this is a book that is a must read for Leaders at various levels of People-intensive

Knowledge organizations especially service industry firms.


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Part-I: Building a People Culture in a Numbers World

The Higher Math

The author states organizations that make people and service cornerstones of their corporate

identity enjoy sustainability [21]. He criticizes companies that have a myopic thinking and

focus on profits, power and market domination as the ultimate objectives of existence. He goes

on to assail organizations that have meaningless spreadsheets dominated decision making

processes as performing financial adultery. He blames two popular business myths as the

reasons for this predicament viz. (a) organizations need to grow and continuously churn-out

profits Year on Year to be successful (b) everything the company does has to yield a return on

investment over a clearly defined time horizon. Instead he recommends business leaders to

understand what he calls the Higher Math.

To explain the powerful concept he uses an internal United analogy of Storekeepers and

Merchants. According to the author, Storekeepers are employees custodial in nature and do

what they are told to do; whereas merchants are entrepreneurial by nature and are willing to

take risks, make dynamic shop floor decisions, and value personal relationships with their

customers ahead of the profits they generate. He says storekeepers want to maintain status-

quo or remain content in hitting their targets, whereas merchants are never contented and

continuously seek opportunities for improvement.

He urges team members to develop a strong emotional connect with their customers; a far cry

from the professional ethics followed by most American businesses. He states that in

supermarket industry, it is easy to replace a generic brand with a company owned brand and

follow the 4Ps for marketing and hope to make it a success. But without the emotional connect

with customers and an engaged frontline staff in promoting the product, the brands full

potential will never be realized. This is a radical point from Sanders that highlights

shortcomings within existing marketing literature. He cites the example of Harley-Davidson

which enjoys huge emotional connect with its customers as a real successful brand. The secret

according to Sanders is, they sell a lifestyle of excitement and adventure, as opposed to simply

selling motor-bikes.

He says a company can spend millions advertising a new offering and create brand awareness,

but if the workforce in the store-front cannot meet the expectations, then customers will

quickly see through the ploy. He calls understanding of this reality as the higher math (or)

business fidelity. He states that Organizations and Leaders need to pay the same level of

attention to train and empower its employees at all levels, as much they spend in attracting,

acquiring and maintaining customer relationships. He quotes Walt Disney as an example of

genuine employee engagement that unleashes the true magic of customer experience.


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The Emerging career model

Sanders assails the existing career progression models in organizations as the big American

dream which suggests that one must start at the bottom and slowly climb the corporate ladder

before he can make a difference. This model expects employees to posture more for the next

promotion, as opposed to encouraging professional satisfaction from serving others. He

substantiates this argument saying, if the above logic was true, then the CEO Job should be the

best job to have and should be seen as the pinnacle of professional achievement. However the

extremely high turnover among CEOs who live and die by numbers tells us otherwise.

He blames that the traditional compensation models over-reliance on materialistic instruments

(money, power, stocks etc.) as the cause of this imbalance, and urges intangibles like humility,

selflessness, professional fulfilment to be equally rewarded.

He doesnt shy away from revealing his Christian religious beliefs and says culture should

encourage individuals to live their lives aligned with godly values that make impossible dreamspossible [43].He uses the economic marginal utility theory and Daniel Kahnemans theory of

framing of gains and losses to illustrate the point that there is no ceiling to the materialistic

rewards; what is seen as a motivator will be a status-quo soon after.

He instead throws open the alternative compensation system, where each team members

contribution is celebrated, not because of his position, because of the unique contribution he

makes towards the larger purpose of the organization [49]. He quotes several practical ideas

he has implemented in United Supermarkets as a part of their R&R program, where people see

the value in the recognition and not the monetary part that goes with it.

This is an interesting point to come from an American author, because the traditional family-

run businesses in India like the Tatas, Munjals have practiced these principles for decades. A

case in point is the extremely low attrition rate enjoyed by Tata Consultancy Services, despite

its lower salary base, in contrast with its competition paymasters struggling to retain staff. The

success of the Hero HondasJIT operational model and the supply chain networks efficiency is

attributed by leading researchers to the family-bond the Munjal family shares with its

distributors, suppliers and employees. Despite the lure of attractive competitor offerings,

majority of Hero Hondas suppliers and distributors have stuck with them through the thick and

thin. This was evident when Honda launched its motorcycle offerings independently in India,

many feared Hero Honda would lose its shine and many of its distributors would switch over.But this did not happen due to the family like relationship Munjals have developed with their

people and partners. Sanders points resonate well when viewed in conjunction with these facts.

Servanthood

Dan Sanders quotes his mentor in the Air force General Peterson who said you can delegate

authority, but never delegate responsibility [55]. This is a very powerful quote with a lot of


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philosophical implications hidden within. He adds that, the irony in real world is poor execution

results in a new CEO before new team members. So Sanders says that true leaders are really

servants of their followers. He uses the word Servanthood liberally from Christian religious

literature as a personal faith of serving others. He believes Servanthood is all about helping

others reach their potential by focusing on their strengths and not on their weaknesses[57].

This is an impressive thought because a lot of leaders want to groom their next level leaders as

what they want them to be, and hence make capability assessments and fitment exercises

against this imaginary desired profile. As we see in real world, those who miss the cut are often

lost in the organization. However Sanders approaches this from a radical angle and emphasizes

that Leaders responsibility is to identify and groom the employees to realize his potential on

what he is capable of, and not on what you expect him to be capable of.

He says from Servanthood flows from the higher level concepts of relationships, trust,

compassion, understanding and friendship [59]. He says it is common to see a new CEO

encircle himself with a close net of confidantes whom he can trust; this should not be seen as

cronyism, because from the CEOs shoes he needs to have people whom he can trust on key

positions in order to deliver his commitments. This point is radical and goes against some of

the literature that argues for meritocracy and constructive conflict. He also makes an interesting

point about mistakes and crimes. He says team members who commit crimes cannot be

allowed to stay. Team Members who make mistakes remain team members, because

forgiveness has a legitimate place in organizations, just as in families [62] This is an

interesting contrast compared to the current organizational belief where we are purely judged

based on our results irrespective of the effort/intention behind the result.

Sanders makes an interesting point about how winners are made to fail. He says too often we

promote people too soon based on their past performance, to roles of different nature with

different level of responsibility. He says instead future potential is the right yardstick that needs

to be used to determine promotions. This is consistent with Leadership and OB literature. He

also emphasizes that the responsibility rests with the leader for equipping his people with the

necessary skills and qualities that they need to perform well in higher roles. This concept in OB

literature is called coaching and is sufficiently well researched topic in the space of Job

definition and leadership theory.

Weeding out Fans from PlayersHe classifies employees into Fans and Players both are often dressed alike in a football

stadium. Players buy the mission and are truly a part of the team. Fans are fickle-minded and

are onboard only as long as it is working in their favour but start undermining and interfering

with others performance when the team is losing.


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He squarely blames the recruitment culture of the number-oriented organizations for this

malady. Number oriented organizations recruit to targets set at the beginning of the quarter,

or follow a needs based hiring approach. There is no rigor or personal attention paid to the

actual hire being made, and hence they end with a getting a warm body [80] on the seat.

However people-centred organizations follow a much healthier approach and are always

looking for players even if no need exists[81]. He says players make immediate contributions

without tearing the cultural fabric of the organization. On the other hand, impostors rarely

contribute more than dissent and disdain[81].

Sanders quotes the organizational model created by Dr. L. Ken Jones, president of the Lubbock

Christian University. This model explains the bizarre behaviour where even true Players at times

become disinterested in the organizations goals and start pursuing their own personal goals.

He explains that in culture-driven organizations, it is important that the values are constantly

kept grounded to the vision & mission of the organization. Once the grounding is achieved,

people that are totally aligned to the values will continue to prosper and contribute towards the

success of the organization.

People that are disenchanted will tend to disengagement in 4 stages:-

Nostalgic thinking Let us go back to the way, things used to be an impossibleproposition given the changing times.

Unproductive Questioning complaints disguised as questions that are challengingthe fundamental non-negotiable aspects of the values.

Isolation People going into a shell and not actively contributing or participating innew initiatives.

Vision

Mission

Values

Goals

Strategies NostalgiaUnproductiveQuestioning

Isolation

Quit

Results


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Quitting If the organization is lucky and/or managers recognize and see the signalof isolation, disenchanted people quit. But in a lot of cases, people just hang around

the system, hoping someone takes a notice of them.

As per this model, it is ideal for organizations to have everyone on the left side of the curve (if

not on the top) where all employees find fulfilment and realization. However there will be

employees on the wrong side of the curve, who have to be either quickly converted to the left-

side by adopting counselling or reasoning approach, or it is better to quickly get rid of them

before they wreck havoc.

This model is a very practical model and reflects the different states of connect an employee

has with an organization. The author emphasizes that people-centric organizations should

never stop talking about their vision. Refocusing the attention on the vision can turn-around

even temporarily disenchanted employees

Part-2: Executing First Things First

Defining the Who Vision

According to Sanders, An organizations vision represents the purpose of its existence; the

heart of what it IS as an entity [95]. He says that in culture driven organizations, training

manuals and checklists may have a role in standardizing policies or programs, but they do not

take the place of the organizations heart & soul [96]. He justifies this bold claim by stating

that, because as a leader you can only delegate authority and not responsibility, you cannot

conceive every possible scenario and build a process for it. He states that explaining the vision

and mission to the employees and getting a connect is the only solution. Connected employees

will find innovative means of reaching the goals without disrupting the organizations fabric.

But Sanders adds that the leaders should live by example and stay committed to the vision in

words and actions. Then the entire organization will rally behind and celebrate actions that

support the vision, even if people occasionally bend or break some rules or policies in this

process [98]. He says standing by example is very powerful than communicating the same via

various handbooks and mailers. Communication is the key to success. He says in the absence

of clear message, people will assume the worst [100]. He categorically states that success is

achieved as a result of unambiguous vision clearly communicated in a timely manner and

easily understood.

He quotes examples of clear vision statements made by General Electric We bring good things

to life and Harley Davidson Take a journey you will always remember to drive home his point

on good Vision Statements. He even quotes Mahatma Gandhis vision statement to British

occupiers India will be free; you are merely guests in our land. He takes a dig at number

oriented companies that communicate the vision as Increase the ROA by 4% or Increase the


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revenue by 4 times in 4 years which are fairly restrictive. These points are consistent with

strategy literature.

Defining the What Mission

Mission defines where an organization wants to go. Sanders got inspired from NASAs clearmission statement Perform manned lunar landing and return safely. This is simple, but easily

understood by everyone in the organization. He similarly re-crafted Uniteds mission statement

using 6 simple words Ultimate Service, Superior Performance, and Positive Impact. He says

this renewed mission statement gave a clear signal to all stakeholders of the organization and

recalls that his employees quickly embraced it. He says once a mission statement is clearly

communicated and well understood by the employees, it gives the leader an insurance against

adversity, because employees will actively monitor changes in the external and internal

environment and take corrective actions mid-course to help achieve the mission.

Sanders says that some leaders suggest that culture can be mission-oriented or people-oriented, but not both. They believe that mission-oriented cultures are fixed on reaching the

goals, whereas people-oriented cultures allow people to fix their goals and give flexibility on

realizing their potential. He argues against this notion by equating culture with cultivate from

Agriculture to the organizational context. Farmers have a clear idea of what they want to grow

(vision), rely on people empowered to choose what kind of seed to plant (mission), and

understand that success will depend on the cultivation (culture) of the seed. The soil may lend

itself to one type of crop or another, but it is the farmer that decides and not the prairie. Hence

farmers are both culture driven (constantly cultivating) and people centred (embracing human

beings who have a choice). Therefore organizations can be both, provided the leadership is

willing to devote the time necessary to create a conducive environment for both to blossom[117]. Although you have no reason to suspect his analogy and explanation, a more practical

explanation of how he has pursued both in United would have aided better understanding.

He quotes Edward De bono obsessing over competition is just a baseline for survival. Sur-

petition on the other hand focuses on value creation beyond the traditional nature of

competition, by exploiting integrated values[120]. He explains from the United context, how

they went about synchronizing what they do every day with what they plan to deliver. For

example, they benchmarked what ultimate service was from outside the industry by identifying

several best practices. They redefined superior (operational) performance by taking a hard-look

at their existing operational practices. They reviewed the positive impact on the communitythey served, by relooking-at everything from a monetary and product donation perspective to a

more time-intensive participation in community service projects. Sanders has the humility to

accept that everything they did has only given them sense of direction, but the destination is far

away. This humility improves his credibility and makes the readers believe his claims,


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He states that organizations need to have a disciplined approach for mission accomplishment

even if it means setbacks in the short-term; else they will drift and never get anywhere. He

emphasizes that organizations must be willing to say NO to any action that takes the focus

away from the mission, even when there are rational commercially sound drivers backing the

request. This point is curious because he assumes that the vision and mission are fairly holistic

and future-proof and are not subject to debate based on unfolding events in the external

environment. In people-centric organizations where a lot of realignment of both goals and

strategy is driven bottom-up, this is a particularly curious point to make.

Defining the When Growth Plans

Sanders quotes a lesser known example of Gallery Furniture, a 2 storey warehouse located off

Interstate-45 in Texas to illustrate the point of how organizations can be successful by being

faithful to their mission & vision, without falling to the greed of unsustainable growth. This

furniture shop under the leadership of founder McIngvale promises to save customers money,

and also deliver on the same day. They have made conscious choices to restrict the size of theirinventory, product assortment, and growth plans, but instead focused on customer service and

personal attention as a strategy to build sustainable competitive advantage. He also quotes

Starbucks, Texaco Petroleum, Krispy Kreme and Boston Chicken as examples of companies that

supposedly had strong fundamentals and were darlings of the Wall Street and financial analysts

at one point, but succumbed to the greed of unsustainable growth and deviated from their

vision & mission.

Sanders talks about the painful interim period when United expanded aggressively and nearly

got crippled. They realized their folly and carefully went back to basics to create a turn-

around within a year. However they still had to lay-off employees for the first time in 87 years;in his words this was a personally harrowing experience. The damage caused by this incident

took several years to heal. He cites open and honest communication about the mistakes we

made and what it would take to erase those errors [130] as the key to make such a quick

turnaround.

He says culture-driven people centric organizations remain faithful to their vision and mission.

They ward-off pressure to compromise on their core. Their growth may be controlled, but their

reasons for success remain unassailable. They may not pay the highest dividend, but they will

return something greater, something more aligned with the higher purpose of enriching the

lives of othersa moral return on investment and a healthier financial standing[141].

This point is a very insightful and it captures the spirit of what was stated in the popular

literature on triple bottom-line reporting.

Defining the how Risk Management


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Sanders says adversity is a reality and every organization will go through it at various points,

either because of self-infliction or through the act of external forces. However people-centric

organizations will bounce-back and regroup stronger than before. He cites the leadership of

Gerard Ford during the aftermath of Watergate scandal and Vietnam crisis as an example of

doing what is right, from a selfless common-good perspective. He liberally attributes Fords

spiritual inclination as the driving force behind his selfless decisions hinged on his values of

not allowing past failures to hinder tomorrows successes, preserving trust by honouring

ones commitments, all human being possess inalienable rights. [147]

He adds that spirituality cannot be separated from secular society and urges people to make

decisions from a godly perspective rather than a worldly perspective. He says such spiritually

inclined leaders radiate positive energy through the organization, and fill the reservoir of hope

when things do go wrong. He says in people-centric organizations that have such a leader

practicing Servanthood, the employees see opportunities out of difficulties and this helps the

company bounce back stronger than ever before.

These points are slightly controversial, because he underlines that spirituality has a role in

business decision making. We can all agree to the spirit of his point about the need for ethical

decision making. But such decisions can be generated out of purely rational mental processes

and spiritualitys role may actually be limited as a catalyst. So I feel he has over-emphasized the

importance of spirituality in this context. Also his attribution of Gerard Fords decision making

to his spiritual background seems slightly far-fetched and suspect to what is called Halo effect.

However the spirit of his points is well taken.

Part-3: Intangibles drive Tangibles

People Not Profits

Sanders takes a dig at some well-known CRM practices like analyzing customers profitability to

make a decision on how to serve them. He says organizations should focus on people (both

customers and employees) and realize the unique qualities of human beings the authenticity

found in everyday life[176].

He then targets the American myth of compartmentalized existence of separation of personal

life from professional life. He states that both are inseparable and a people-centric

organizations leader recognizes this and thinks in an integrated way when making a decision

that affects a certain number of people in the organization. He goes on to add, such decision

making may be more time-consuming and tricky, but the results are much better.

He quotes the United story of Keith Bradley, a storekeeper who happily replaced a spoilt ham

for free, even though it wasnt purchased in their store. This is similar to the IKEA story which is

discussed in CRM textbooks. He also quotes the UCrew program of United (one of their CSR


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measures) that aims to improve the lives of people in the community it is serving. He says

people are more important than processes [179] and human beings are assets and not

expenses [179].

This is a truly inspiring thought to hear from a CEO of a company that has achieved tremendous

success among all stakeholders. This point is consistent with several literatures that are

published about Management of Learning Organizations and Knowledge Organizations. In this

21st century every organization whether in service industry or manufacturing functions as a

Knowledge organization and this is a key takeaway for leaders managing these organizations.

Decision making beyond a Spreadsheet

Sanders make an impressive pitch for decision making beyond traditional spreadsheet based

rational decision making. He says sound business decisions need to balance intuition with

empirical data points. He cites a 3 bucket theory which consists of 3 buckets of information viz.

(1) Buyer intuition information about customers purchasing profile and behaviour (2) Sellerintuition information about sellers perception of sales (3) empirical data about what sells

and what doesnt. He states that a good balanced decision needs to take into account,

information from at-least two of these 3 buckets, and all the 3 would be ideal. This point is

insightful and supports the existing literature available on Strategic thinking.

He substantiates this point by citing the example of a failed decision within United to

implement a new technology in a bakery of a store in Amarillo, Texas. The original decision

was made purely based on empirical data. However it failed to take into account the purchase

behaviour of the buyer in the local store. He adds :-

The customers purchase behaviour gathered from market research techniques is basedon his/her intuition of whether he/she will buy or not. This is prone to exaggeration and

can change when put in conjunction with other external stimulus.

The sellers perception of what sells and how much it sells can be coloured by various

biases that exist harmlessly in their minds. Also the more far away the decision makers

are, from the scene of action, the more selective the information they receive becomes.

The empirical data is prone to attribution errors based on what the aggregator was

having in his mind when searching through volumes of data.

So he says sound decision making, needs to go beyond spreadsheets and numbers, and take

into account both subjective and objective facts about the business problem. He also states

that, the decision makers need to listen carefully to the views of the front-line employees andneed to remove obstacles and create a culture of open & honest communication within the

organization. There can be no disagreement on this point because Strategic thinking literatures

have repeatedly emphasized that balancing intuitive decision making with reasoning as the

optimal mix of efficiency and effectiveness.


15/16



The 4 P Management System

In People centric businesses, people (employees, and partners like suppliers and distributors)

hold the key to sustained organizational performance. To emphasize this point Sanders uses

the 4P management theory propounded by Gallen Walters to say Management begins and ends

withPeople andPartners, what happens in between is a matter of inputs and outputs (Process),and what happens afterward is a reflection of results (Performance). These4Ps of Managementrequire managers to address issues related to people, process, partners, and performance with

equal interest and in that order[201].

He states that processes in the ideal world should function without bottlenecks and be

operational efficient. However in the real world we know this is not the case. To continuously

remove bottlenecks, cooperation, accountability and ownership of the People actually involved

in the process makes the difference between successful performance and failure. Mutually

agreed upon goals, aligned to the vision, is a very powerful way of getting this buy-in. This

point extends the Japanese Management philosophies of Kaizen and LEAN.

He says great ideas can emerge anywhere within the organization, and it the culture which

determines where the ideas emerge[205] from. Sanders emphasizes the importance of

bottom-up innovation and its significance to sustained performance. He also says partners i.e.customers, distributors and suppliers are a critical part of the chain and extending the

Servanthood and friendship concept to cover them is equally important. He says one of the key

responsibilities for a leader is to continuously remove obstacles in the way of such innovation

and help the organization flourish.

Balancing the 4Ps is a critical task for any leader and the framework has given is indeed a very

useful key to determine where the priorities lie.


16/16



Humility

Sanders states that even an organization following a 4P management philosophy is susceptible

to pride. According to Sanders, Pride can be defined positively as a feeling of elation or

satisfaction over ones achievement. Or, it can be characterized negatively as a high or

overbearing opinion of ones worth or importance [220] Sanders says organizations should

foster the positive (humility) and keep the negative (pride) in check. He proposes a 3 step

process for building this culture of humility within the organization. [221,222]

1. Keep People focused on the future and not on the past.2. Keep focus on pursuit of excellence rather than on path of mediocrity. The feeling of

destination yet to reach can make people acknowledge their weaknesses and help

destroy their egos.

3. Keep people focused on right kind of role models so that they can seek inspiration fromleaders with humility and get over their biases.

He cites Tiger Woods as a case of humility [223] and selflessness and as a true role model for

people. Given the recent controversies that have since emerged around Woods, this portionappears funny in hindsight. Otherwise these are very insightful points to come from a practising

CEO. The point he makes can be sometimes confused with Leaders ego to keep people around

him/her on constant tenterhooks. But Sanders makes a far more humble point on self-efficacy.

The importance of walk-the-talk is also emphasized here.

Conclusion & Key Take-aways

The key takeaways for leaders aspiring to create people centric organizations to take away from

this inspiring book are [231]:-

Surrender your ego; Surround yourself with talented people and listen to what they say.Preserve the Culture; The leader is the custodian of culture in the organization.Remain faithful to values; Never compromise even if it means treading a different path.Unleash the imagination; Serve your team members and they will serve you better.Never stop talking about the Vision; Make sure all team members connect with the higherpurpose of their work.

Accept Responsibility; Leaders can delegate authority, but not the responsibility.No Job is unimportant; Organizations are like a symphony orchestra where everyone has toplay and play in-sync.

Do not compromise integrity; Absolute truth and honesty is the best dividend to pay tostakeholders.

Execute as if your life depended on it; The current business environment needs a sense ofurgency and a matter of personal passion to back everything you are executing.

Have fun; Higher productivity and superior customer satisfaction are a result of teammembers seeing their work as a ministry of Servanthood.

If you ignore the side-tracking air force stories, and some of the attribution errors and over-

emphasis on spirituality, this book is a truly inspiring read for all leaders of knowledge

organizations in the 21st century.

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