Recommended Reading

Periodically, we'll sink our teeth into a book or article that has so much relevance to our work that we feel compelled to let you know about it. When we do, our intent is not to provide a book review, analysis, or even a summary of the author's intended key points. There are services available that are much better suited to do that for you. But we will, from time to time, cull out points that we feel are directly related to the work we do and might be of interest to our current and prospective clients.

Loyalty Rules! by Frederick F. Reichheld

Look into the soul of any company that leads the pack in productivity, profits and sustained growth, and you'll see a core principle that's tried, true and yet - allusive to many of today's organizations. That principle is "loyalty." In Loyalty Rules, author Fred Reichheld explains how the acid test of leadership is the ability to build strong loyalty when others are busy confusing profits with purpose, and pursuing short term gains at the expense of employees, customers and investors. The author provides insights into the sustained success of several companies whose results are based on six principles - one of which is "play to win-win." One of the companies he uses to demonstrate this principle is Harley-Davidson.

As Reichheld explains, the win-win strategy at Harley-Davidson means ensuring everyone in the value chain (suppliers, dealers, employees, and investors) realizes that only when the customer wins, do the other members of the value chain win. The firm has been relentless in its efforts to build, nurture and reward collaborative relationships with it's various stakeholders. The Harley Owners Groups, or HOG's, stands out as one of their most successful loyalty-building efforts. In launching HOG's, Harley headquarters helped dealers across the country organize associations of riders as well as rallies, tours and parties that continually fueled their passion for riding. The firm's CEO attends at least three or four HOG events each year, encouraging every senior exec to follow suit, inviting a cross section of employees to each event, and even providing motorcycles so more of them have a chance to live the Harley experience. There the Harley employees engage, watch, listen and learn firsthand what Harley customers care about and where the company can do a better job.

In another Harley example, many of their customers had become interested in shopping on line. The most lucrative response, a centralized web-site offering Harley's entire product line, would have taken significant business away from their dealers. Instead, the company met with its dealer council and crafted a mutually-workable e-commerce strategy. Now when customers search the web for a product, they are directed to a central web page and asked to select from a list of participating dealers, or, enter their zip code wherein they are directed to the nearest dealer. Customers win because they get web access to Harley's full product line. Dealers win because they earn retailing profits from all web sales and connect with new local customers. The company wins from expanded marketing and sales via the Internet, and stronger dealer relations.

Our last win-win example is where Harley's growth was driving it to expand its manufacturing capacity and open new plants. While many firms often use such opportunities to avoid unionization and expand in right-to-work states, Harley invited their two unions to be involved in the expansion planning and decision making. They ultimately chose Kansas City for the new plant, and with that decision came several other breakthroughs in their employee-management relations including: a new work group structure; quality and cost improvements on the factory floor; and commitments to job security. Rich Teerlink, CEO at the time, knew that employee behaviors and attitudes - more than leadership talent and principles - communicate most directly to customers, suppliers and others just what the company stands for.

You may not have a product that causes your customers to go "hog wild" with enthusiasm. But you can still reap the benefits of the "play to win-win" strategy. At Harley-Davidson, customer relations went far beyond the sales and service transactions. It meant engaging customers frequently, and at as many different contact points as possible. It meant putting all employees, not just the sales force, in a position where they could appreciate the customer's experience with a product and understand directly what "value" meant to that customer. That's what our Value Chain Labs are all about. Click the button at the top of the screen, or contact us, to find out more. Value Chain Labs might be your key to more loyal customers, and the sustained results that come with that loyalty.

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