Empowerment:. John Tschohl
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href="#ua0b5cae2-a7b0-570f-b7cb-d9b9749c3a58"> Introduction
In this book you will learn effective ways to use Empowerment to ramp up your career, to build your business, and to take your corporation to the top. Before we launch in, I’d like to tell you a story about Empowerment from my personal experience.
The story starts in a little bodega (grocery store) in the San Isidro District of Lima, Peru in 1942. The store, which is named E Wong, is owned by Chinese immigrants, Erasmo and Angela Wong. Dedicated and hard working, they focus on providing the best possible service to their customers. As you can imagine, hours are long and there’s never a shortage of work. Life revolves around the little store. The children learn the business from the ground up by helping out after school and on weekends. They are successful. You can tell because the store gets busier and busier. After a few years, E Wong is so crowded that they need more space. They expand and hire a few employees.
Assuming the increased shopping area and additional staff would make the store less crowded, the Wongs are surprised when the expansion has little effect. Soon they expand again and hire more employees. Their focus remains on customer service, and when they have 25 employees they purchase my Feelings Customer Service Program. That was over 20 years ago.
At my first public seminar in Lima, about 15 years ago, the entire Wong family attended. During that presentation I asked, “Who is the most customer service driven firm in Peru?” Over two thirds of the audience said “Wong”. (About 99 percent of the time in my seminars the audience has trouble coming up with any answers at all to that question.)
Every few years the Wong family would have me train their entire work force. My sessions were big events. I would train between 1,000 to 2,800 employees at a time. In order to accommodate groups of this size, they had to erect an auditorium for my presentations. It would have been impossible for a staff member not to understand the level of importance that the Wongs placed on my message. The heaviest focus was always on Empowerment. I would teach all their employees to bend the rules, in favor of the customer, and to use Empowerment every day. I would come up with crazy things -- sure to surprise customers -- such as, if a child drops his ice cream cone, replacing it for free and delivering groceries for an elderly person who has trouble carrying them.
Many of their employees were very young. Invariably one person would raise a hand and say, “Mr. Tschohl, if we did this we’d be fired.” The entire audience would erupt with applause and stamp their feet in agreement. Each time, I would ask Eduardo Wong, who would sit in the back of the auditorium, to come up and reinforce my message. I would say, with him standing on stage right beside me, that the Wong family would not miss a meal if employees spent company money taking care of customers.
In 2005, E. Wong changed its company name to The Wong Group to better reflect the business. It had become the largest supermarket and retailer in Peru. In the city of Lima, with about 9 million inhabitants in a country of approximately 29 million people, the Wongs built a reputation for service. The last time I worked with them they had over 10,000 employees, 34 stores and an internationally recognized online presence. Sales were approximately $1.1 billion dollars. Wong’s had a 63 percent market share, and NO company had a better reputation for caring for its employees.
On December 17, 2007 the Wong Group sold the company for approximately $900 million to Cencosud, a Chilean company. To date there has been a sharp decline in stock value, and the future of Peru’s former king of supermarkets isn’t looking bright.
The problem is the new firm apparently doesn’t know what it bought. The focus on Empowerment, customer service and caring for employees has eroded. The Wong Group remains number one although it’s rapidly losing market share to its competitor, Supermercados Peruanos.
Once management takes its eyes off the service strategy, that company loses sight of its service to customers. Along with it goes market share and revenue and, unfortunately, they are almost impossible to recover. In two short years Wongs’ brand and market share have been gutted. The Wong Group was an example of a firm that focused on driving an empowered workforce to offer superior service. It understood the power of Empowerment and its economic impact at Wong. Its caring for customers and employees fueled revenue. The Wong family still understands the power of customer service. It’s new mall, Plaza Norte, is the largest and most luxurious in Peru and will be built on a solid brand formed on service strategy.
On a recent trip to Peru, I met up with Eduardo Wong again, and he quickly repeated the words I had taught thousands of Wong’s employees. I chuckled as I heard my exact phrase pop out his mouth: “Empowerment is having millions and millions and millions and millions of overhappy customers.”
The Wong Group story is not an isolated incident; I have many other examples of Empowerment – all leading to success. Still the Wongs are one of the best examples because of their time in business and the abundance of well-documented information on how that success was achieved.
Read on to learn how Empowerment: A Way of Life can fuel your success…
1
Empowerment is a myth, while all CEO’s think that their employees are empowered, the reality is they are afraid to make even the smallest decisions.
I don’t believe you can be a service leader without Empowerment. I’ve never met a CEO anywhere in the world who disagreed with my concept of Empowerment, which is to get employees to make a decision, on the spot, in favor of a customer. All CEO’s believe their employees are empowered. The reality is that it doesn’t happen, and empowered employees just don’t exist.
Even the most customer-driven companies like Nordstrom, TD Bank, and Dell have huge problems. They can’t get an employee to make an empowered decision. About 90 percent of all empowered decisions will cost less than $50.00. The Ritz Carlton has a $2,000 ceiling that an employee can spend on the spot. A typical guest spends thousands on a stay at the Ritz, so the amount makes sense. Maybe at your company the amount should be $200 or $500. Getting an employee to make a $25 - $50 decision in favor of the customer is like asking for two miracles at the same time. The single biggest reason employees won’t make an empowered decision is because they fear getting fired. If it’s between getting fired or losing the customer, it’s an easy choice.
“Half the money we spend on advertising is wasted, and the problem is we do not know which half.” Lord Leverhulme British, Philanthropist, Founder of Unilever
The best way to test this is to try to get employees at companies where you do business to bend the rules. Ask them, “What would happen if you made an empowered decision?” They’ll usually laugh and say, “What’s Empowerment? Are you kidding?” And when you push them further, 95 percent of the time employees will say they’ll get fired.
That same perception is true in your organization, contrary to your beliefs. If you don’t make an empowered decision, the customer will probably leave and not return. Very few customers complain or push the problem up the chain of command. They just walk. The fear that some executives have is that an employee might give away too much. I suspect that half of your marketing money is wasted. The problem is that nobody knows which half. When you put an ad in the newspaper, on radio or TV, very few people even pay attention. The truth is they’ve come to distrust advertising. Of those who are exposed to the ad, even fewer respond. Of those who do respond, you have no idea who they are or what motivated them to buy. Most marketing people claim to have these answers, but in reality they don’t.
You have a live customer in your hands and something goes wrong. Your employee could easily solve this problem with Empowerment and maybe a small amount of money. You have targeted marketing money. Isn’t