CX Competency: Employee Engagement (Video)

Temkin Group has found that the only path to sustainable customer experience differentiation is to build a customer-centric culture. How? By mastering Four Customer Experience Core Competencies.

This video provides an overview of one of those competencies, Employee Engagement, where the goal is to align employees with the goals of the organization.

Here Are Five I’s of Employee Engagement:

Human Beings Are Driven By Their Personal Predictive Analytics

In yesterday’s NY Times, there’s an excellent article, We Aren’t Built to Live in the Moment (written by Martin Seligman and John Tierney). It discusses how human beings process information, and the emergence of a new field called prospective psychology. Here’s a very simplified summary of what it says…

Human beings:

  • Are distinctive from other species in our ability to focus on, value, and plan for the future.
  • Store our memories in three different components: what happened, when it happened, and where it happened.
  • Use our mental “downtime” to run many, many simulations about the future by reconfiguring the elements of our memory in different ways.
  • Tap into the results of simulations to make fast decisions by predicting the likely outcomes of different options.

My take: First of all, we pay attention to whatever Seligman says; he’s the father of the Positive Psychology movement (see the post, Positive Psychology Meets Customer Experience). This view of human psychology describes that the brain as if it is constantly running a very advanced suite of predictive analytics. Here’s why this is meaningful for CX professionals:

  • Humans’ focus on the future is what gives power to Purposeful Leadership, as it creates the motivation for people to be part of achieving something important in the future alongside other people.
  • Since people selectively reconfigure their memories, we need to design experiences to create specific memories. That’s the cornerstone of what we call “Design for Real People,” which is one of the strategies of the CX competency: Customer Connectedness.
  • The myriad of simulations provide people with an expectation that doing something good for someone else will likely lead to a good emotional outcome, which is what creates empathy.
  • To motivate customers, employees, or leaders, it’s helpful to introduce future scenarios that tap into elements of their previous experiences.

And here’s why prospective psychology is important for everyone: it determines your happiness. Like any predictive model, it needs fine tuning. If your model is always calculating the worst-case outcomes, then you’ll tend to be sad and depressed. On the other hand, if your model is looking for positive scenarios, then you’ll stay happy and motivated. We’ll be following the research to see how people can adjust their personal predictive models.

The bottom line: Pay attention to prospective psychology.

Report: The Shift To Customer Journey Insights

We just published a Temkin Group report, The Shift To Customer Journey Insights. Here’s the executive summary:

Customer insights are critical to customer experience programs. However, current insights’ efforts tend to focus on individual interactions rather than on a customer’s entire journey, and as a result, they often fail to provide a complete picture of a customer’s experience with the company. This report helps companies shift their insights efforts from concentrating narrowly on single transactions to focusing broadly on customers’ journeys.

Here are some highlights :

  • We developed an approach to help companies create a comprehensive view of journeys called Customer Journey Insights (CJI), which is made up of five strategies: Internal Journey Alignment, Journey Data Farming, Journey Performance Tracking, Journey Visualization, and Journey Prioritization.
  • We share 20 examples of best practices from companies that are applying these strategies to develop a more complete understanding of their customers’ journeys.
  • To help companies master these strategies, we have identified three stages organizations proceed through on their path to enabling customer journeys: 1) Customer Journey Orientation, 2) Customer Journey Enablement, and 3) Customer Journey Mastery.

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Here are the best practices focused around five strategies for shifting towards customer journey insights:

  1. Internal Journey Alignment. Shift the company’s mindset away from siloed interaction success to customer goal facilitation.
  2. Journey Data Farming. Tap into adjacent data sources and make linkages across channels.
  3. Journey Performance Tracking. Overhaul metrics to measure performance across customer journeys.
  4. Journey Visualization. Create mechanisms for communicating insights in a way that reinforces the centrality of customer journeys.
  5. Journey Prioritization. Focus on the journeys, customer segments, and channels that are strategic business priorities.

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Report: What Happens After a Good or Bad Experience, 2017

We just published a Temkin Group report, What Happens After a Good or Bad Experience, 2017. This is our annual analysis of which companies deliver the most and least bad experiences, how consumers respond after those experience (in terms of sharing those experiences and changing their purchase behaviors), and the effect of service recovery (see last year’s report).

Here’s the executive summary:

To understand how good and bad experiences effect customer behavior, we asked 10,000 U.S. consumers about their recent interactions with more than 300 companies across 20 industries. We then compared results with similar studies we’ve conducted over the previous six years. Here are some highlights:

  • About 19% of the customers who interacted with Internet service providers and TV service providers reported having a bad experience – a considerably higher percentage than in other industries. Of the companies we evaluated, 21st Century, Spirit Airlines, and HSBC deliver bad experiences most frequently.
  • We looked at the percentage of customers in an industry had a bad experience and combined that number with the percentage of customers who said they decreased their spending after a bad experience and then used this data to create a Revenues at Risk Index for all 20 industries. Rental car agencies stand to lose the most revenue (6.7%) from delivering bad experiences, while retailers stand to lose the least (1%).
  • Investment firms are most effective at recovering after a bad experience, whereas TV service providers are the least effective.
  • After customers have a very bad or very good experience with a company, they are more likely to give feedback directly to the company than they are to post about it on Facebook, Twitter, or third party rating sites. Customers are also more likely to share positive feedback through online surveys and share negative feedback through emails.
  • Compared to previous years, customers are more likely to share feedback over Facebook and Twitter, and these channels are most popular with consumers who are between 25- and 44-years-old.
  • Of all the companies we evaluated, The Hartford is the most likely to receive negatively biased feedback directly from its customers, while Chubb is likely to receive the most positively biased feedback.

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Here are excerpted versions of 3 (out of 19) graphics in the report:
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Report: The Four Customer Experience Core Competencies (Free)

If you are only going to read only one thing about customer experience, then this report is it. It’s the blueprint for building a customer-centric organization… and it’s free.

We just published a Temkin Group report, The Four CX Core Competencies. This blueprint to building a customer-centric organization is an update to our groundbreaking research that was originally published in 2010 and updated in 2013.

Temkin Group has conducted multiple large-scale studies demonstrating that customer experience (CX) is highly correlated with loyalty across many different industries, in both business-to-consumer and business-to-business environments. When customers have a good experience with a company, they are more likely to repurchase from the company, try its new offerings, and recommend it to others.

While many companies try to improve their CX by making superficial changes, Temkin Group has found that the only path to lasting differentiation and increased loyalty is to build a customer-centric culture. Temkin Group has studied hundreds of companies to uncover the difference between CX leaders and their less successful peers, and has identified four CX competencies that companies must master if they wish to build and sustain CX differentiation:

  1. Purposeful Leadership: Operate consistently with a clear set of values. (see video)
  2. Compelling Brand Values: Deliver on your brand promises to customers. (see video)
  3. Employee Engagement: Align employees with the goals of the organization. (see video)
  4. Customer Connectedness: Infuse customer insight across the organization.

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This whiteboard video describes the Four CX Core Competencies:

Here are the best practices described in the report:

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Focus On Employee Engagement, Not Employee Experience

We are finally seeing a movement by the general business world to seriously focus on the role and value of employees, which is why “Embracing Employee Engagement” is one of our 2017 CX Trends. Temkin Group has viewed employee engagement as a critical foundation for customer experience since our inception. It’s one of our Four CX Core Competencies.

While the trend is great, there’s still a long way to go. I’d love to see many more human resources organizations recognize that employee engagement is one of their strategic objectives (see my post, HR Execs: Wake Up To Employee Engagement!).

As this area has gained attention, there’s been a troubling misunderstanding creeping up in the dialogue. People are confuscating Employee Engagement with Employee Experience. They are not the same.

It’s important to understand the distinction, because only one of them is the foundation to success. So let’s look at each of them:

  • Employee Experience deals with how employees enjoy their job or environment. It deals with making things fun and enjoyable. People often say things like “let’s treat the employees’ experience like we do the customers’ experience.” They think of ways to make the work place more exciting and fun, by adding things outside of work like pizza parties and gift swaps. Employee experience can be measured by questions like “how much fun do you have at work.
    • My take: This is a very nice thing to do for your employees, but it is insufficient to drive success.
  • Employee Engagement deals with how committed employees are to the mission of their organization. It deals with human beings’ intrinsic needs for a sense of meaningfulness, choice, competence, and progress. People who want to affect change in this area must focus on the design of the work environment using what we call the Five I’s: Inspire, Inform, Involve, Instruct, and Incent. Employee engagement can be measured by the three questions in the Temkin Employee Engagement Index.
    • My take: This is a requirement to drive long-term success.

If you want to build a high performing organization that consistently delivers great customer experience, then you need to focus on employee engagement. If you happen to improve employee experience along the way, then that’s an added bonus.

The bottom line: Focus on employee engagement, not employee experience.

P.S. Based on some great comments to this post, I want to clarify something. Improving employee experience is not a bad thing. But a company should not be focusing its energy on improving employees experience just for the sake of that improvement. The ultimate goal should be in creating an engaged workforce, not just ensuring that employees enjoy their work experience. See my post: Are You Creating Engaged or Entitled Employees?

Report: Humanizing Digital Interactions

We just published a Temkin Group report, Humanizing Digital Interactions.

Emotions play an integral role in how customers make decisions and form judgments. This means that how a customer feels about an interaction with a company has an enormous impact on his or her loyalty to that company. However, companies tend to ignore customer emotions, especially during digital interactions, which is problematic as customers are increasingly interacting with companies online. This report focuses on humanizing digital interactions by replicating the elements of strong human conversations.

Here are some highlights:

  • We developed The Human Conversational Model, which is made up of seven elements – Intent Decoding, Contextual Framing, Empathetic Agility, Supportive Feedback, Basic Manners, Self-Awareness, and Emotional Reflection.
  • We share over 35 examples of best practices from companies that are designing digital experiences across the seven elements of The Human Conversational Model.
  • We demonstrate how you could apply The Human Conversational Model to three types of digital activities: opening a new bank account online, purchasing a pair of shoes through an app, and getting technical support online.

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A gratifying conversation requires two processes:

  • Cooperative Interface. Each participant is required to collaborate with her partner to achieve the shared goal of the conversation – be that casually catching up, gathering information, sharing knowledge, etc. This is the part of the model that a conversational partner sees and responds to, and it consists of five elements: contextual framing, intent decoding, empathetic agility, supportive feedback, and basic manners.
  • Background Mindfulness. This portion of the model is not observable within what would normally be considered the scope of the conservation as it pertains to what happens internally within person. Each participant has a pre-existing notion of who he is as an individual (self-awareness) and throughout the course of the conversation, learns about how he affects other people (emotional reflection). Though not directly observable, “background mindfulness” informs the way in which each participant communicates with his current and future partners.

Here’s an overview of the Human Conversation Model along with best practices we highlight in the report:

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Report: 2017 Temkin Experience Ratings, UK

We just published a Temkin Group report, 2017 Temkin Experience Ratings, UK. This is the same customer experience benchmark that we’ve been publishing for U.S. firms over the past seven years.

The UK Temkin Experience Ratings is a cross-industry, open-standard benchmark of customer experience. To generate these scores, we asked 5,000 UK consumers to rate their recent interactions with 157 companies across 16 industries and then evaluated their experiences across three dimensions: success, effort, and emotion.

Here are some highlights from the research:

  • Co-op, M&S Food, and Lidl earned highest overall ratings, while Audi, BMW, and Flybe earned the lowest.
  • When we compared company ratings with their industry averages, we found that Saga, Premier Inn, Vauxhall, and Volkswagen most outperformed their peers, while Audi and Bank of Scotland fell well below their competitors.
  • Take a look at a listing of all 157 companies.

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Here are the top and bottom companies and the industry averages in the 2017 Temkin Experience Ratings, UK:

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Report: Employee Engagement Benchmark Study, 2017

We just published a Temkin Group report, Employee Engagement Benchmark Study, 2017. This is the sixth year that we’ve published the benchmark of U.S. employees. The research is based on an online survey on Q3 2016. (Take a look at our Employee Engagement Resource Page).

For the sixth year in a row, Temkin Group used the Temkin Employee Engagement Index to analyze the engagement levels of more than 5,000 U.S. employees. We found that:

  • Sixty-three percent of U.S. employees are “highly” or “moderately” engaged – the highest level we’ve seen in the six years we’ve conducted this study.
  • Companies that outperform their competitors in both financial results and customer experience have more engaged workers.
  • Compared to disengaged employees, highly engaged employees are almost five times more likely to recommend the company’s products and services, they are over four times more likely to do something that is good, yet unexpected, for the company, they are three times more likely to stay late at work if something need to be done, and they are over five times more likely to recommend an improvement at the company.
  • Companies with 501 to 1,000 employees have the highest percentage of engaged employees, while companies with 10,000 or more employees have the lowest.
  • On an individual level, our research shows that the most highly engaged employees tend to be those who regularly interact with customers, who are highly educated, who earn a high income, and who are executives.
  • Forty-nine percent of construction employees are highly engaged, the highest level of any industry. At the other end of the spectrum, only 20% of employees in public administration are highly engaged.
  • Given the significant value of engaged employees, we recommend that companies improve engagement levels by mastering our Five I’s of Employee Engagement: Inform, Inspire, Instruct, Involve, and Incent.

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Here’s what we found when we examined year-over-year results for the Temkin Employee Engagement Index:

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Here are previous employee engagement benchmark studies: 2016, 2015, 2014, 2013, 2012.

Data Snapshot: Media Use Benchmark, 2017

We just published a Temkin Group data snapshot, Media Use Benchmark, 2017. This is our annual analysis of how much time consumers spend using different media channels (see last year’s data snapshot).

Here’s the data snapshot description:

In January 2017, we surveyed 10,000 U.S. consumers about their media usage patterns and compared the results to similar data we collected in January 2016, January 2015, January 2014, January 2013, and January 2012. Our analysis examines the amount of time consumers spend every day watching television, browsing the Internet (for both work and leisure), reading books (both print and electronic), reading newspapers (both print and electronic), listening to the radio, reading a print magazine, and using a mobile phone. This data snapshot breaks down the results by income level, education level, and, most expansively, by age.

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Here’s a portion of the first figure from the data snapshot that contains 13 data-rich charts. As you can see:

  • Time spent over the last six years with mobile web/apps has increased the most, followed by using the Internet at work and reading a book online.
  • Across all of the media activities we track except for using the Internet at work, consumers spent more time doing them in 2017 than in 2016.
  • Consumers increased their time reading paper books and magazines by 30% over last year, the largest increase of any activities.
  • While consumers increased their reading of newspapers, they also had a jump of 27% in the amount of time they spent reading the news online.

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Report: 2017 Temkin Experience Ratings (U.S.)

1703_temkinexperienceratingsus_coverTemkin Ratings websiteWe published the 2017 Temkin Experience Ratings, the seventh annual release of this comprehensive customer experience benchmark. Here’s the executive summary:

2017 is the seventh straight year that we’ve published the Temkin Experience Ratings, a cross-industry, open standard benchmark of customer experience. To generate these Ratings, we asked 10,000 U.S. consumers to rate their recent interactions with 331 companies across 20 industries and then evaluated their experiences across three dimensions: success, effort, and emotion. Here are some highlights from this benchmark:

  • Publix, Chick-fil-A, and H-E-B earned the highest overall ratings, while Health Net, Blue Shield of CA, and Comcast earned the lowest scores.
  • When we compared company ratings with their industry averages, we found that Kaiser Permanente, Georgia Power, Advantage Rent-A-Car, and Regions most outperformed their peers, while Spirit Airlines and Days Inn feel farthest behind their competitors.
  • The Ratings saw its first general decline in 2015 and then dropped considerably in 2016. This year, however, the Ratings significantly increased, with only seven companies’ scores declining. Fujitsu, Volkswagen, Fairfield Inn, Columbia Natural Gas, and Advantage Rent-A-Car improved the most since last year.
  • To improve customer experience, companies need to master four competencies: Purposeful Leadership, Compelling Brand Values, Employee Engagement, and Customer Connectedness.

Industry Changes in the 2017 Temkin Experience Ratings

We used the same methodology for the Temkin Experience Ratings this year that we’ve used for all of the prior years. Every year, the companies in the Temkin Experience Ratings shift a bit, but this year we made some more substantive changes. Specifically, we:

  • Combined TV service and Internet service. While we have historically provided separate ratings for TV service providers and Internet service providers, we decided to combine those categories this year. It turns out that many of the companies are in both categories and many consumers purchase those services as a bundle.
  • Added streaming media. Given the rise of services such as NetFlix and Hulu, we added a new category that focuses on the customer experience of those streaming media companies.
  • Expanded some industries. We enlarged a number of categories to increase the number of relevant companies. We changed the appliance category to TV and appliances to include a larger group of consumer electronics providers. We also included some newer companies into existing categories. We updated rental cars to rental cars & transport so that we could include firms like Uber, and we changed hotels to hotels & rooms to include companies like Airbnb.

Download report for FreeFreeDownloadButton You can also download the dataset in Excel for $395

Have questions? See our FAQs about the Temkin Experience Ratings. We also have snapshots on all 20 industries.

Here’s a recording of a webinar where we discuss the 2017 Temkin Experience Ratings:

The Temkin Experience Ratings are based on evaluating three elements of experience:

  1. Success: How well do experiences meet customers’ needs?
  2. Effort: How easy is it for customers to do what they want to do?
  3. Emotion: How do customers feel about the experiences?

Here are the top and bottom companies in the ratings:1703_2017txrtopbottom

***See how your company can reference these results or
display a badge for top 10% and industry leaders***

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An Ugly Uber Lesson In Organizational Culture

1702_ubercultureIn a recent Fast Company article, This Is What Caused Uber’s Broken Company Culture, Uber was described as having a…

“Hobbesian environment” where “workers are pitted against one another and where a blind eye is turned to infractions from top performers.”

While I haven’t investigated Uber’s actual culture, it’s worth examining what could have caused this type of an environment in one of the fastest growing Internet companies. To be fully transparent, I’m an Uber customer who is thrilled with how the company has transformed the taxi experience.

My take: Culture is frequently neglected. Why? Because it often doesn’t seem to show up until there’s a problem. That’s what happened at Wells Fargo, and it is also what appears to have occurred at Uber. Very few leaders set out to create a dysfunctional culture, but they exist in many places.

Every organization has a culture, whether its leaders explicitly attend to it or not. It represents how employees think, believe, and act:

  • Think: Employees are intellectually bought-in and understand the company’s vision and why it is important to the company. What is the company communicating?
  • Believe: Employees see that leaders are truly committed to what is important to the company. What are leaders demonstrating with their behaviors?
  • Act. Employees adjust their behaviors to align with what is important to the company. What do employees do when no one is looking?

In young companies, organizational culture closely mirrors the attitudes of its leaders. If they care about fast growth at all costs or winning through combat, then that’s the context that frames how employees think, believe, and act. If the company is successful, then the culture tends to be strong, as it is implicitly reinforced by that success.

What does strong culture look like? Picture a cult. Behavior isn’t judged on a normal good/bad scale, but on how well people conform to the tone set by its leaders. Inappropriate behavior such as the sexual harassment alleged at Uber can go unchecked, unless it overtly bumps up against a cultural norm. If alleged allegations of wrong doing are not important to the leaders, then they will not be taken seriously or even acknowledged.

To all of the leaders reading this post, especially those who are running young, fast-growing companies, please stop ignoring organizational culture. You’re responsible for much more than financial results. You’re creating an organization that can hopefully endure and add value to society. So focus on your organizational culture and create a company that you can be proud of for generations.

Wondering how to do it? Read my post: Put Culture Change On Your 2017 CX Agenda. Here’s How. 

The bottom line: Organizational culture really, really matters!

Customer Experience Leads to Recommendations (Charts For 20 Industries)

If you want customers to recommend your company, make sure they have a good experience. In this post, I share data and analysis showing how customer experience correlates to customer recommendations across 20 industries. At the bottom of this post we’ve assembled a number of industry-specific data charts that you can download and use.

In the report, ROI of Customer Experience, 2016, we provide a lot of data on how customer experience affects a number of different aspects of loyalty for 20 industries. Here’s a summary of some of the data showing the average connection between customer experience and loyalty across all industries.

Here’s how we calculate this data:

  • We ask 10,000 U.S. consumers to identify the companies that they’ve interacted with during the previous 90 days
  • We have those consumers rate their experiences and segment the respondents into five buckets based on their Temkin Experience Ratings feedback
  • For each of the five buckets of consumers, we calculate the average loyalty of the group across different dimensions using the calculations below…

1612_cxandloyaltymetrics

(Note: See Temkin Loyalty Index for data on specific companies)

CX and Recommendations Charts for 20 Industries

If you’re looking for good data for your industry, we’ve put together these 20 industry charts that show the relationship between customer experience and customers making recommendations. Feel free to use them within your presentations in accordance with our citation policy.

Here’s a way to share the data internally…

At [Your Company’s Name], we work hard to improve our Customer Experience, and this industry chart from Temkin Group shows why it’s important and meaningful. As our Customer Experience improves, research shows that consumers are more likely to recommend us, which is one of the many ways in which our customers show their increased loyalty. 

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Report: State of the CX Profession, 2017

1702_stateofcx-profession2017_coverWe just published a Temkin Group report, State of the CX Profession, 2017. This is the fifth year that we’ve examined the roles of CX professionals and the third year that we’ve done a compensation study. Here’s the executive summary:

To understand the mindset and roles of customer experience professionals today, we surveyed 237 CX professionals and then compared their responses to similar studies we’ve conducted over the previous five years. We asked them how their CX efforts impacted their organization last year and about their plans for the coming year. This report also includes a compensation study, which is based on the 158 respondents who agreed to participate. Here are some highlights from the research:

  • Eighty-four percent of respondents say that their customer experience efforts have had a positive business impact in 2016.
  • Ninety-nine percent think that customer experience is a great profession to be in, the highest level we’ve seen in the six years we’ve been doing the study.
  • Eighty percent think that customer experience will be more important for their companies in 2017 than it was in 2016, compared to the 3% who think it will be less important.
  • Forty-nine percent expect to see an increase in their customer experience staffing levels this year – a higher percentage than we’ve seen in previous years.
  • Respondents plan to increase their spending most on voice of the customer software and text analytics.
  • Respondents plan to increase their focus most on Web experiences and customer insights and analysis.
  • The total amount of compensation in our study ranges from $93,000 for mid-level individual contributors to $239,000 for CX executives.

1602_DontBuyReportJoinCXPA

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Here’s some data that combines pieces of two graphic, showing that CX continues to be a great profession….

1702_cxprofessionalssummary

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The bottom line: The CX profession is thriving.

My 5 Super Bowl Observations (Good For CX and Leadership)

1702_brucesuperbowlgear2I was very fortunate (as a die-hard Patriots fan) to have attended Super Bowl LI in Houston. It was the most amazing game that I’ve ever seen.

I’m still a bit numb.

After spending most of the game feeling very melancholy and wondering why I had bothered to make the trip to Houston, the Patriots did the near-impossible. They came back to win after being behind by 25 points. At one point in the game, the Falcons had a 99.6% chance of winning!

Here’s my video from right after we won…

Now that it’s been a few days, I can reflect back on the Patriots victory. Here are some of my thoughts that I also think apply to customer experience and leadership:

  1. Every player counts. Throughout the Super Bowl, playoffs, and the regular season, different Patriots players made key plays. There are 53 people on an NFL roster and more than 60 people play for the team during a year (with injuries and roster shifts). While many people focus on Tom Brady, the Patriots won because of the performance of all 60+ players. This insight drives how the Patriot’s allot their cap-limited player salaries.
  2. Do your job. Throughout the season, the Patriots repeated a mantra: Do Your Job! While it’s always easy to focus on what other people might be doing, or the hype around big games, each player will best influence the outcome if they are physically and mentally prepared. In this environment, players are motivated to prepare and they have trust in their teammates.
  3. Focus on the next play. When the Patriots were down 28 to 3, it looked bleak. The players could have put their heads down and pouted about the previous plays, but they didn’t. They went back on the field and did their best on the next play. And then the next play, and the next, and the next. The team’s success was not based on a single play (although Edelman’s catch was amazing). Instead, it came from a large number of next plays.
  4. Leadership drives culture. Getting 60+ well-paid athletes to share a common vision, and operate in a consistent manner does not happen by accident. And it’s not practical to micro manage every player’s minute-by-minute activities. This type of alignment only comes from a strong culture, which has been modeled and nurtured by Bill Belichick and the rest of the coaching staff.
  5. Live events are special. I’m sure that every Patriots fan watching or listening to the Super Bowl went crazy when we won the game, but there’s something magical about being there in person. The energy that’s created during a live event cant be replicated on TV or radio. It was a truly emotional experience that I shared with 10’s of 1,000’s of my closest Patriots friends. I was also at Super Bowl XLIX in Phoenix, and felt the same massive energy when we beat the Seahawks.

The bottom line: All I can say is… Go Pats!

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