Hyatt Hotel's has been in the news lately - for all the wrong reasons. As was the CEO of Whole Foods a few weeks ago! In fact, I could begin this blog the way I began my May 21 blog (What do General Mills and Finland have in common?) and ask - what do the Hyatt Hotel and the CEO of Whole Foods, John Mackey, have in common?
On August 11, John Mackey penned a op-ed on health care reform in the WSJ strongly aligned with right wing, conservative thinking. His opening quote makes transparent his personal leanings.
One can argue what's wrong with that. The constitution of the United States guarantees a person the right to free speech, and capitalism the right to a company to structure its labor force and its costs (most of the fired housekeepers were minority women, making $15 an hour; it is expected the replacement workers will make $8 an hour).
However, in today's networked, interconnected world, company's and CEOs are not just individuals or employers. They are symbols of what their companies stand for, and for what their customers stand for.
Customers who shop at Whole Foods are liberal, pro-environment, anti GMO, pro-organic food people. It is not that they want to deny John Mackey the right to his opinions; it is that they felt let down and violated. John's op-ed diminished the value customers derive from their association with the store and their shopping experience there. Take a look at the poll at wholeboycott.com:
Clearly, those who run Whole Foods have not spent enough time to understand the dynamics of today's interconnected networked world. The concept of customer value has changed. Customers don't just derive value from the products and services a store has to offer, they also derive value from what the company and its executives stand for.
Hyatt's case is no different. The outrage is not about whether it's a good business decision - its not about Hyatt's understanding of cost cutting and optimizing a housekeeping budget - its whether Hyatt has a good heart or not? The issue is also about whether I will get value by staying at a hotel chain that acts in such a heartless fashion.
A company or a CEO can't be so naïve as to ignore the context they operate in. There is still blood on the streets. A large number of people are struggling to get by and the evening news is full of heartbreak stories. We live in an era where Politicians are actually regarded as more trustworthy than Business Leaders! Don't believe me? Ask CNN!
Today's customers are talking to each other - in both the real and digital worlds. Though what they say in the digital world can often be more potent, due to the speed and ease with which digital opinion can whip up bystanders into a frenzy about issues they deeply care about. The environment is one such issue, health care is another, having a job and avoiding economic pain probably tops the list.
Are John Mackey and Hyatt not listening? Intelligent companies in touch with the realities of the digital market place don't just listen when customers talk to them. They listen even when customers are not talking to them or about them. Why? Because smart companies realize they don't control the conversation agenda, they are merely a part of it.
On August 11, John Mackey penned a op-ed on health care reform in the WSJ strongly aligned with right wing, conservative thinking. His opening quote makes transparent his personal leanings.
"The problem with socialism is that eventually you run out of other people's money." - Margaret ThatcherOn Sep. 17, Hyatt fired approximately 100 housekeeping staff in Boston. According to the Globe, Hyatt fired housekeepers at the Hyatt Regency Boston, Hyatt Harborside, and Hyatt Regency Cambridge, replacing them with workers from an Atlanta staffing company.
One can argue what's wrong with that. The constitution of the United States guarantees a person the right to free speech, and capitalism the right to a company to structure its labor force and its costs (most of the fired housekeepers were minority women, making $15 an hour; it is expected the replacement workers will make $8 an hour).
However, in today's networked, interconnected world, company's and CEOs are not just individuals or employers. They are symbols of what their companies stand for, and for what their customers stand for.
Customers who shop at Whole Foods are liberal, pro-environment, anti GMO, pro-organic food people. It is not that they want to deny John Mackey the right to his opinions; it is that they felt let down and violated. John's op-ed diminished the value customers derive from their association with the store and their shopping experience there. Take a look at the poll at wholeboycott.com:
Clearly, those who run Whole Foods have not spent enough time to understand the dynamics of today's interconnected networked world. The concept of customer value has changed. Customers don't just derive value from the products and services a store has to offer, they also derive value from what the company and its executives stand for.
Hyatt's case is no different. The outrage is not about whether it's a good business decision - its not about Hyatt's understanding of cost cutting and optimizing a housekeeping budget - its whether Hyatt has a good heart or not? The issue is also about whether I will get value by staying at a hotel chain that acts in such a heartless fashion.
A company or a CEO can't be so naïve as to ignore the context they operate in. There is still blood on the streets. A large number of people are struggling to get by and the evening news is full of heartbreak stories. We live in an era where Politicians are actually regarded as more trustworthy than Business Leaders! Don't believe me? Ask CNN!
Today's customers are talking to each other - in both the real and digital worlds. Though what they say in the digital world can often be more potent, due to the speed and ease with which digital opinion can whip up bystanders into a frenzy about issues they deeply care about. The environment is one such issue, health care is another, having a job and avoiding economic pain probably tops the list.
Are John Mackey and Hyatt not listening? Intelligent companies in touch with the realities of the digital market place don't just listen when customers talk to them. They listen even when customers are not talking to them or about them. Why? Because smart companies realize they don't control the conversation agenda, they are merely a part of it.
