Big changes may mean big turnover amid service transition

Expect to lose a big chunk of your staff once you dive into the cultural-change process, warn executives of companies that have made the leap successfully. For example, during United Airlines’ reorganization and overhaul of airport services, many supervisors accustomed to the old ways of doing business were unsettled. Some initially fought the changes, eventually deciding to come onboard. Others, unable to make the leap, quit. Services-savvy PetSmart opened its own dog grooming school when it decided to provide the service in its stores but lacked the skilled manpower. IBM Global Services lost customer service reps who were unwilling or unable to cross-train in hardware/software. The cultural transition can be a rough and painful journey, the experts agree — but in the end it’s worth it.

PetSmart’s bare-bones epiphany ushers in services for ‘pet parents’

PetSmart’s 15,000 employees, from executives to dog groomers, refer to customers as “pet parents.” The practice is grounded in the company’s belief that Americans treat their pets like furry family members — enough to spend almost $36 million on pet supplies and services this year. The key to success in this market, PetSmart has found, lies in services, which account for 20 percent of its growth annually. With clinics for grooming and training, as well as the PetsHotel and Doggie Day Camp, PetSmart truly understands pet owners. Just ask store employees, who enjoy an unusual perk: they can bring their own pets to work.

‘Deviant’ management can turn a losing company into a winner

In 1997, Yellow Transportation landed in Fortune magazine’s least-admired companies list. “We were a $2.5 billion company,” says Greg Reid, senior vice president. “But we kept operating the same old way. Also we were losing money – huge, huge siphons of money.” Desperate to yank Yellow from its rut, executives spent a year visiting customers, shadowing employees and talking, talking, talking. The solution? The company embraced “deviant leadership,” a management style that encourages “thinking outside of the box, or saying there never was a box.” By 2003, Yellow snagged the number-one spot in its industry on Fortune’s most-admired companies list, and remained there in the 2004 and 2005 lists.

Self-service technologies should benefit customers, not just bottom lines

Companies like to implement self-service technologies because of the potential cost savings and the appeal of the cutting-edge. But a surprising number of managers fail to implement their own SSTs effectively, according to a study by several professors of marketing at the W. P. Carey School of Business. “The companies that plan their strategies well, and the ones that integrate their customers into the equation, are the ones that will succeed,” says Mary Jo Bitner, director of the school’s Center for Services Leadership.

All in the family: After employee pricing strategy, what next?

The auto industry’s ubiquitous employee discount plans dominated summer advertising, but after two extensions, all three will end soon. Begun by General Motors in June and copied by Ford and Chrysler in July, the promotion spurred record sales and depleted 2005 stock, but may have been a short-term fix for struggling U.S automakers. A W. P. Carey marketing professor says the promotion served as a valuable learning tool, and the lessons learned about consumer preferences will help the Big Three forge ahead with new ideas for increasing sales in the months to come.

Buy vs. build: Chinese firms seeking familiar brands in global strategy

When growing companies consider entering a new market, is it better to buy or build your own brand? Last year, the Chinese manufacturer TCL acquired the television operations of Thomson SA, a multinational electronics manufacturer based in France that owns the RCA brand. In December, Beijing-based Lenovo completed the purchase of IBM s personal computer business, acquiring among other things the ThinkPad brand. These acquisition moves represent a strategy on the part of Chinese companies to ease their entry into Western markets by hitching a ride on well-known American names.