At the upcoming Net Promoter Conference in San Francisco, Rackspace CEO Lanham Napier will discuss how his firm has utilized NPS to pursue greatness. During our recent CEO Roundtable* Lanham explained:
For us, NPS is a greatness metric. It’s a value statement about what our company wants to become. We have lots of metrics for our business but most all of them measure bigness—how big our revenues are, how many employees we have, how many servers we have in our datacenters, how big our profits are, how big our market capitalization is. But to achieve our aspirations, what we really need most is a measure of greatness. Net Promoter tells us how often we are delivering what we call Fanatical service—service so great that our customers lives are enriched and their businesses generate better results.
Too many companies these days never go beyond those traditional measures of bigness. They attach budgets and bonuses to the measures, so employees naturally come to believe that growth alone is what really matters. By focusing innovative energy on bigness rather than greatness, companies eventually fall into the trap of bad profits and bad revenues. Growth inevitably stalls as customers search out better alternatives.
Ironically, when a company focuses on greatness, it usually grows bigger. Rackspace, with its emphasis on achieving greatness, is growing at more than 30% per year and has become the leader in its target markets. The firm’s market capitalization has increased more than fivefold since its IPO in 2009. By focusing on greatness (through the lens of Net Promoter), it has outpaced the competition.
In 2009, I joined the Rackspace board of directors and have had the privilege of observing Rackspace’s journey toward greatness up close. One of the lessons I’ve learned is that simply measuring Net Promoter at the corporate center to generate aggregate metrics for senior execs, the board and big investors is not the key to greatness. Rather, the real key is distributing that measurement capability to each front-line team so that team members can track how close they are coming to greatness each day—and then make the appropriate course corrections.
A good analogy is the way that global positioning systems (GPS) have expanded their impact on our lives as the technology evolved from central control to a distributed model. In its early days, GPS was revolutionary, but it was limited to centrally controlled missions. For example, NASA used GPS to guide missiles, and naval operations could use it to provide navigational aid to captains of aircraft carriers. Today, GPS is available through millions of smart phones and inexpensive consumer devices. Just about anyone can determine their current location, the distance to their destination, and the best route to take—not just aircraft carrier captains, but lone kayak paddlers, drivers, and joggers.
Think of NPS as your company’s GPS for greatness. It lets each individual team discover how close they come to greatness—as measured by 9s and 10s from the customers they touch each day, each week, each month. Through closed-loop feedback, they can determine the adjustments required to “recalculate” and home in on their destination. That is the real power of NPS; that is how companies like Rackspace are revolutionizing the quest for greatness. NPS provides a guidance system that can transform the pursuit of greatness from a theoretical conversation about heroic leadership into a practical grass-roots effort.
*Rob Markey and I hosted the CEOs of Rackspace, Intuit, Schwab, Bain, and eBay for a Roundtable discussion about their experience with NPS. We will be releasing shortly a series of videos from that session.
