I’m sometimes asked how I made the transition from a focus on customer experience to a focus on leadership.

“What transition?” is my usual reply.

When I wrote Five-Star Customer Service in 2005, I opened with a story that illustrated a culture of service: George Boldt, who was paid $1 million a year to manage the Waldorf-Astoria hotel in New York City.

That was one hell of a lot of money for a hotel manager way back in 1893 (or today, for that matter), but after Boldt named his price and they shook on it, Astor remarked, “I would gladly have paid you more!”

It’s a remarkable story involving two remarkable men: one who understood the value of unrivaled customer service; the other who lived and breathed it, and who made sure every member of his staff did as well.

Service is what the customer sees and feels, but it doesn’t doesn’t happen because some trainer talked to the staff for an afternoon. The customer experiences terrific service because the staff shares a culture of service: when you pick the right people and put them in the right environment, their sincere need to delight is self-pertetuating – culture ensures it.

That culture? It’s started by a savvy leader, someone like George Boldt who gets it. This leader knows his sole responsibility is to tend to the culture, as a master gardener tends to his flower beds. A healthy, service-obsessed culture doesn’t happen by accident – and it certainly doesn’t keep going without a tremendous amount of support.

Thus the only formula I’ve ever needed in business:

Leadership + Culture + Service = Profits

I’ve never talked to a business leader who doesn’t desire profits for her company. Profits are any company’s lifeblood; without them, the game quickly winds to an end.

Profits can come from a variety of areas, of course: monopoly, a must-have innovation, a massive sales force; mammoth economies of scale. What I’ve noticed about any of these advantages is that they’re fleeting, which is to say that over time competitors whittle away at them, until yesterday’s differentiator is today’s me-too.

The one area where companies can differentiate themselves in a sustained way, though, is through commitment to service on an organizational scale – and yes, I mean organizational: not just customer-facing staff, but also engineering, finance, legal, R&D… everyone.

You see, very few business leaders get service. Most think it’s a necessary expense at best, and relegate it to the ghetto of the customer service organization.

So if your leader is smart enough to grasp the central role service can play in a company’s success, your company will break from the pack. You can charge a premium to a discerning clientele, like Singapore Airlines, or you can attract more customers at price-competetive rates, like JetBlue or Southwest Airlines.

Show me a leader who fails to grasp this, and I’ll show you… well, I’ll show you most leaders. And that’s a shame. It’s bad for customers, it’s demoralizing for staff, and it’s really bad for stockholders.

As Bruce Nordstrom, chairman of the store chain that bears his name, said,

“We don’t teach our people customer service, their parents do.”

CEO: did your parents teach you customer service?  My guess is, the answer to that question explains an awful lot about the performance of your company.

And that, my friends, is why customer service is first, last, and only a leadership issue.

Want more? Check out my Two Minute video, Customer Experience Needs To Be Your Companywide Obsession!

This post (without the video) previously appeared on Ted’s former blog. It is also one of the foundational posts for his latest book, A World Gone Social: How Companies Must Adapt to Survive.

About Ted Coiné

Ted Coiné is CEO of The Extraordinary Network, a group that is rewriting all the rules of influencer marketing by cutting out agency middlemen to work directly with B2B and luxury brands. Proud “bleeding heart capitalists,” he and his team have built support of a great cause into every for-profit campaign they undertake.

His entire career, Ted has collected fascinating people, most notably other thought leaders who also have a large and loyal audience of large enterprise leaders. He has watched the Wild West that is influencer marketing until he realized an opportunity to fix this broken system, and give influencers the sway they need to move markets together, and to get paid what they’re deserved for this power they bring to bear.

An Inc. Top 100 Speaker and one of Business News Daily’s 15 Twitter Accounts Every Entrepreneur Should Follow, Ranked #1 authority on the Social CEO and #3 in the Future of Work, Ted is also a serial business founder and CEO.

Ted is a Forbes Top 10 Social Media Power Influencer and an Inc. Top 100 Leadership Expert. This stance at the crossroads of social and leadership gave Ted a unique perspective to identify the demise of Industrial Age management and the birth of the Social Age. The result, after five years of trend watching, interviewing and intensive research, is his latest book, A World Gone Social: How Companies Must Adapt to Survive.

He lives in Naples, Florida, with his wife and two daughters.

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