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The Digitally Integrated Organization: Driving Sustainable Outcomes for All Stakeholders

Case Study

In the global marketplace, three forces are converging to transform the organization – core values, digital technologies, and sustainable outcomes (for both society and business). We suggest the transformed organization will have the characteristics of a Digitally Integrated Organization (DIO).

The DIO integrates digital technology and marketing strategy with core values to drive organizational goals that lead to sustainable outcomes for both the organization and its stakeholders, including the greater community to which it is connected.

Challenge

  • 87% of consumers worldwide want business to place at least equal weight on society’s interests as its business interests, 2012 Edelman goodpurpose study.
  • Former President Bill Clinton  suggested, “In the future, corporations will care less about maximizing profits and more about employees and society.”
  • Forward-thinking business leaders [in Europe] are now preparing their organizations for the upcoming era of green growth. They have realized that sustainability is not a burden but a chance to improve a company’s overall performance, build consumers’ trust and drive profits.”

Solution  

A company’s journey towards a DIO (digital, sustainable, values-driven organization) evolves through three stages.

  • Passive stage – there is formal compliance and support for minimum requirements (e.g., corporate social responsibility initiatives, environmental regulation); there is no impetus to drive positive change.
  • Proactive stage – company leaders define the customer experience and their employee and community/environmental goals and practices and set minimum requirements.
  • Sustainability stage – company leaders transition to a values-driven, sustainable business strategy that serves to drive social and economic benefits for the organization and its consumers, employees, shareholders, and the greater community.

The speed and movement between stages is affected by competitors’ changes, consumers and employees’ challenges, and company crises. For example, the Barclay Group UK Wall St scandal forced the bank to transform its company culture. After the impropriety, Barclay’s new CEO Antony Jenkins said the bank would commit to the five values of respect, integrity, service, excellence, and stewardship. “We get it. We are changing the way we do business, we are changing the type of business we do and we are setting out a new course.”

Results

There are many companies striving to make the transition to a DIO. Following are two examples.

Case Study 1: Starbucks Coffee

Starbucks has been a leader in integrating core values, digital technologies, and sustainability into its business strategy.

Starbucks begins with the customer experience. “The value of creating a superior customer experience is not just in what it will get you in return. There is also value in the quality of your creation.”

In order to deliver this CX, the organization crafted a values-driven mission statement:

“Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” 

This is the standard lived by its employees as they go about their daily business; a set of principles that reflects the company’s core values:

  • Our Coffee – It has always been, and will always be, about quality.
  • Our Partners – We always treat each other with respect and dignity. And we hold each other to that standard.
  • Our Customers – When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers – even if just for a few moments.
  • Our Stores – It’s about enjoyment at the speed of life – sometimes slow and savored, sometimes faster. Always full of humanity.
  • Our Neighborhood – We can be a force for positive action – bringing together our partners, customers, and the community to contribute every day.
  • Our Shareholders – We are fully accountable to get each of these elements right so that Starbucks – and everyone it touches – can endure and thrive.

So how does Starbucks translate its values and mission to its employees and the greater community?

Starbucks announced that it will pay for an online degree from Arizona State University for its workers (20+ hours per week), even if its employees launch new careers or find a new job. The CEO, Howard Schultz, wants to shift the conversation to treat a college education as an employee benefit (like Starbucks did with health insurance for part-timers). Realizing that an educated society benefits all, his plan demonstrates “the role and responsibility of a public company” at a time when education matters more than ever and “so many people are being left behind.”

Case Study 2: The Container Store

The Container Store is a storage and organization retailer that sells over 10,000 products to meet consumers’ storage needs and to save consumers time and space.

Its growth and success has been attributed to its strong corporate culture, where employees take precedence over shareholders. The company has created a work environment where employees can feel valued and loved. This translates to excellent customer service and beneficial relationships with customers, vendors, and employees.

Six Foundation Principles form the basis of this unique culture:

    • Fill the other guy’s basket to the brim. The Container Store is very supportive of its vendors, initiating a policy to always pay its vendors on time.
    • Serve the man in the desert. The staff is trained to meet all the customers’ needs, even those of which the customers themselves might not be aware. Salespeople engage in conversation to discover the customer’s true needs instead of merely asking “May I help you?”
    • One great person equals three good people. A great employee is flexible enough to go outside their regular duties to help customers and fellow co-workers.
    • Intuition does not come without a prepared mind. Staff are trained extensively (first year 263 hours of training, versus an industry average of 10 hours) to help its customers find solutions.
    • The best selection anywhere plus the best service anywhere plus the best or equal to the best price in our market area.
    • Air of excitement. They hire enthusiastic and passionate employees to add excitement to the retail environment.

The Container Store’s employee-centered culture is not just an empty mantra: the company pays its employees at least 50% more on average than other retailers (the average salary for a full-time salesperson is $46,000/yr), and even part-time workers receive healthcare benefits. Operating with unusual transparency, employees get access to all company information, including financials and real estate plans.

This employee-centric approach seems to be working: employee turnover is just 10% per year, compared to as much as 100% at other retailers. Not surprisingly, the Container Store has earned Fortune’s “100 Best Places to Work in America” accolade for twelve consecutive years running.

Aside from earning the respect of employees and the greater community, the Container Store’s unique management style has had a positive impact on the company’s bottom line: sales have grown approximately 20% per year since its founding in 1978.

If you dig a bit deeper into the roots of The Container Store, you’ll find that CEO Kip Tindell founded the company based on the principles of Conscious Capitalism, which seeks to enhance business performance while improving the lives of individuals and communities. The Container Store shows us that happy employees translate into happy customers who, in turn, increase sales and profits for shareholders.

Takeaway

Starbucks and The Container Store join Wholefoods, Zappos, Patagonia, Tom’s of Maine, Birkenstock, Seventh Generation, Stonyfield Farm, Ben and Jerry’s and others – all values-driven companies striving to generate sustainable outcomes for their stakeholders.

Likewise, the DIO is a strategy for organizational transformation that incorporates digital technologies with the founding principles of Conscious Capitalism, Social Venture Network, and Benefit Corporations to generate sustainable outcomes.

Questions

  1. How does Starbucks leverage its core values to deliver a superior customer experience?
  2. What can we learn from The Container Store’s approach toward its employee relationships?
  3. How does the concept of Conscious Capitalism explain the success of The Container Store?
DIGITAL MARKETING RESOURCE CENTER