When Diana Dykstra joined the San Francisco Fire Credit Union as CEO, she says she walked into an environment where people were paralyzed by policies. "The [employee] manual was huge. It was used to throw at employees when they did something wrong," Dykstra says. "Who's going to read 1,000 pages?"
She says employees were prohibited from acting in the best interest of the customers. As a result, the company's Net Promoter Score hovered at 52. "We don't need a policy manual; we just need to do the right thing, applying what we do against our core values," Dykstra says.
In October 2004--60 days into her job-Dykstra decided that her firm was investing too much time and energy into developing policies, so she threw away the manual and started developing the company's core values. "It sounds Draconian, but we had absolutely no vision of where we wanted to be and no consensus of who we were," she says. "People came in and did their job in little silos."
The core values she established are: 1. Create "elationships." 2. Tradition and excellence. 3. Team is the word. 4. Listen, learn, and innovate. "Without those, it doesn't really matter what you do. Sometimes when you have such stringent policies and procedures you suspect everyone is bad," she says. "Ninety-nine percent of people in this world are honest and true and good."
Dykstra says the core values serve as the organization's guiding principles. "At San Francisco Fire Credit Union we live and breathe those core values every day," she says. The firm hires based on the core values and every new project goes through the core value filter before it's launched. Employee reviews are also based on all four values. "We still have the rules, but we look at [them] from a different view," she says.
To help the values permeate the organization, Dykstra initiated storytelling to reward employees who go above and beyond to solve customer problems. Every day, employees submit stories about customer interactions that represent the core values. Management reads the stories at every monthly staff meeting and gives monetary prizes for the best ones.
Creating concrete deliverables around customer relationships has added value to the credit union. Dykstra says the employees now freely act in the best interest of the customers. For instance, last year a customer called one of the firm's customer service reps after her car stalled on a California freeway and the tow truck refused to help her until her monthly payment to her insurance company cleared. The rep at the San Francisco Fire Credit Union called the customer's insurance company and "reamed them over the coals" because the woman's check in fact had cleared. "That was an employee doing an extraordinary thing," Dykstra says.
Dykstra says this behavior is paying off. Satisfaction surveys are showing tremendous rebound. She says the firm's long-term goal is to reach an NPS score of 85. It's currently at 75-a 23-point jump from five years ago.
Dispersed power creates challenges
According to Clark Winter, chief investment officer at SK Capital Partners, leaders like Dykstra are transformation leaders-people who enhance motivation to help others. "This power versus empowerment is so powerful," says Winter, who recently developed a list of binary decisions that define leaders and managers. "The human spirit responds to integrity and good judgment. Taking care of the client is yet another manifestation of that. Who wants to work in a company where there is centralized power? Nobody."
But power spread across the organization creates a different set of challenges. If companies want to put the type of person on the front line who can make decisions in the best interest of the customers, they must invest in training and adopt a more skillful hiring approach, says Chris Carfi, CEO and founder of Cerado. "They have to make sure the people they hire have the skills to make those kinds of decisions on the fly, as opposed to people who will just follow a script," he says.
Carfi thinks more companies will start to evolve from an organizational structure based on centralized power to one where power is more equally shared through employee empowerment. He says, "The rationale behind that is we are seeing this move to much more visibility to the individuals in the organization, as opposed to an organization as a monolithic entity."