0 Bad Reviews: Imitating Alcoa’s transformation in the information age

Picture of Paul O'Neill from Alcoa
Paul O’Neill transformed Alcoa by changing one keystone habit, safety. Credit: CNN.

Here is how Paul O’Neill introduced himself to a crowd of Wall Street investors when he became the CEO & Chairman of Alcoa in 1987:

“Today, I want to talk to you about worker safety… I intend to make Alcoa the safest company in America. I intend to go for 0 injuries,” he told the Manhattan ballroom.

– The Power of Habit

The investors were dumbfounded because he did not talk about profitability – only safety. A year later, Alcoa’s profits hit a record high. When O’Neill retired in 2000, Alcoa’s market capitalization had increased by $27B. Someone who invested $1M in Alcoa would have earned $1M in dividends, and the value of the shares would have been $5M when O’Neill left.2

Unlike the previous CEO, O’Neill knew that he could not order Alcoa to become more profitable. Instead, he focused on changing one habit: workplace safety. The change was easy for managers and workers to get behind. Once affected, it would set off a chain reaction of improvements to the company’s bottom line because improving safety meant improving things like manufacturing, communications, and culture at the company.

Fast forward nearly 30 years to 2016. Many workplaces are safe from physical danger. We still face economic danger. According to a 2014 article by Harvard Business Review, the online review is a relatively new economic risk:

Every marketer is aware of the rise of online reviews and other sources of peer-to-peer information, but many neglect this trend and market products much as they did a decade ago.3

– Harvard Business Review

The article goes on to explain how purchases are affected by a combination of: 1) Prior shopping habits, 2) Marketer-provided information, and increasingly 3) Other people’s reviews. To compete in environments where consumers rely on others’ opinions, companies need to change. Effective change cannot be mandated, only inspired.

Paul O’Neill’s call for 0 workplace injuries in 1987 could be remixed in 2016 as a call for 0 bad reviews. By setting a goal of 0 bad reviews, you will inspire your employees to transform their habits around production, communication and culture. When workplace injuries happened, O’Neill asked employees to suggest solutions so the injuries would never recur. Do the same when your company receives bad reviews. Soon, your company will become known – online and offline – for delivering a great customer experience. Your bottom line will flourish, and your employees will be motivated to continue performing at a high level.

REFERENCES

  1. Duhig, Charles. The Power of Habit. Audiobook. Ch 5 – 3 hrs 53 mins.
  2. Duhig, Charles. The Power of Habit. Audiobook. Ch 5 – 3 hrs 58 mins.
  3. Rosen, Emanuel and Simonson Itamar. “What marketers misunderstand about online reviews.” Harvard Business Review. February 2014 issue.

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