Karl Schwantes Business Masterclass - video transcript

The following is a transcript of the video of Karl Schwantes speaking at Brisbane City Council's Lord Mayor's Business Forum on 22 October 2014 at Wynnum.

I know that there's been a general theme tonight that business is really tough and that sometimes it really feels like you have to work twice as hard to make the same money that you used to, if you're lucky.  That as business owners, really we are the backbone of the economy.  We're employing local Australians, giving them a job so that they can support their families.  But sometimes as business owners, I think that we get - we do fall into that trap of working in our business more than we do on our business. 

I mean I'm sure there are  some of you that in this room that feel like you are the super hero in your business, you're the one with all the answers, you're the go to guy, and you're the one more importantly putting out the fires.  Sometimes it might also feel like the only way to compete is to really move your business online, offshore, and to have a constant downward spiral of reducing your prices.  Hopefully tonight what I want to give you is some of the strategies that I've employed in our business, that has seen our business grow year after year and hopefully there will be some concrete examples that you might be able to take home and implement in your own business as well. 

So really I believe to be successful in this economic climate, you really need to have a best team strategy.  You need to have a world class service strategy, and you need to have an innovation strategy.  So I actually spent 10 years in the military as an artillery captain and I can remember one mission that I had to fire in, which was at night time, with no elimination.  Now how do I manage to achieve that goal?  Well all I could do was look around me and all I could find was the night vision scope of a machine gun. 

So just using that alone I was able to adjust the round on to the target and complete the mission.  Now why was that mission success?  It's not because that I was so good at what I was doing, it's because I had a great team around me.  I had an expert signaller who was able to relay my coordinates to the gun positioning officer.  The gun positioning officer was able to take those coordinates and translate them into bearings and elevations for the guns, and the gun Sergeant, who was able to fire them. 

If any one of those key personnel had not done their job to the optimum level, the mission would not have been a success.  So I guess sometimes it might feel like we're all are sitting in the trenches and life is really tough.  But believe me the only way to really get out of the trenches is to have that best team strategy.  So I thought I would share with you how I went about building the best team strategy that I could find at the Xennox. 

Well for me, I started off with the workshop, which is the back end of making everything.  I looked for the most qualified and the best jewellers that I could find.  I pulled them all in to a meeting.  Then I looked for the best diamond setter that I could find, whose sole job is just to actually take the diamonds and put them into the ring.  I got them all into the one room and I said, look, I really want you to be part of my team.  They all agreed.  Now how did I do that?  It was quite simple.  I gave them what they wanted. 

They wanted to work with high-quality jewellery, beautiful diamonds, and not work with mass produced rubbish.  They also want to be in an environment where they were surrounded by other elite professionals.  So the question I would ask you is, what is your team passionate about?  Are you doing things in your business that you know that your team members want to do?  So if you owned a restaurant, are you serving the kind of food that inspires and motivates the chefs and the waitresses or the waiters that you have there? 

The next thing I did was to my front of staff.  I was looking for a 2IC, a second-in-command.  I wanted to find somebody that was really passionate, great at sales, good people manager, and somebody who was good with displays.  So like a common theme tonight, I asked around and I used our referral networks in the industry.  Once I found somebody that I thought was going to be suitable, I sat down with her, we had a meeting, and she also agreed to join the team. 

Now why did she do that?  It's because I was able to communicate to her what my passion for the business was and what my mission, vision and purpose was.  So I thought I would share that with you tonight.  So my vision is to become internationally recognised as the ultimate destination for an amazing dream ring experience with the engagement rings that are totally unique that the bride will love for ever.  So I'm sure the Lord Mayor's quite happy with that because I hope to bring him more international tourists to come in and buy jewellery and support the local jobs. 

My mission is to provide an amazing environment where our clients can meet the most passionate and talented jewellery professionals who are committed to achieving excellence and delivering those heart stopping moments that make the Xennox Diamonds' experience truly memorable.  The purpose.  So this is really the reason why I do what it is that I do.  It's because that we believe that everyone should have the opportunity to wear a beautifully designed and custom-made diamond engagement ring with diamonds that sparkle brilliantly and that you will love as much in 50 years as you do today. 

So the question for you is, do you have a mission, a vision and a purpose?  Are all your team aligned with that?  Do you have the kind of team members that can share that and who want to help you take your business into the future?  Do you have it written down anywhere?  That mission, vision and purpose probably took me the best part of two weeks to write.  It's not something that you can naturally hash out in a half an hour over a coffee.  It's something that you start, you'll come back and you'll redefine, and you'll come back again later and you'll redefine again.  But as long as you're committed to it, you'll get there. 

So the second strategy that I wanted to share with you is the world class service strategy.  Another thing that the military really help me with was a dedication to perfection.  A small calculation error in one of my grid plots could have made disastrous consequences.  So I'm always striving to make myself better, to increase and improve my team, so that we can offer the best service possible.  The question I'd ask you, is are you working on personal bests, or are you just working on averages? 

Try and set yourself a personal best that you can try and better every day.  One of the things I install with my staff is that I really want our clients to have a phenomenal customer service experience every single time that they see us.  So how do I go about reinforcing that?  Well what I wanted to do was develop a framework that would make it very easy for my staff to follow.  I call it the gift framework, which makes it kind of nice because I can say to every staff member, did you give that client a gift, not in the physical sense. 

So what does that really mean?  Well what it really means is, I want the client to be greeted warmly and friendly within three seconds of entering the store.  Good morning, how are you?  I want an introduction, my name is Karl, pleased to meet you, welcome to the showroom.  The next one is to find their why and get to know them.  Buying a diamond engagement ring is one of those rare possessions.  It's rarely sold or traded and it's something that you usually have for the rest of your life. 

So it's an important journey that either guys or couples go on together.  My job is to find out where you are in that journey and to see if I can help you along that journey.  Even if I move you just one step closer to your final destination, then I've done what it is that I set out to do.  So really take the time to get to know them.  Now this is my favourite, transform the experience.  I want the client to leave happier than when they came in.  I want to surprise and delight them and want to give them the things that they didn't even think that they could ask for. 

So a little example with that.  About a couple of weeks ago I had a couple that came into the shop, the lady gravitated towards the diamond counter as they normally do, and the gentleman went and sat on the couch, very disinterested, you could tell he didn't really want to be there.  I went over to them and I said, sir you look like you've been dragged kicking and screaming here.  He said, pretty much.  I said how many of these stores have you been to today?  He said, this is the fifth one. 

Now if you want to do the math, that's probably about four hours of jewellery store shopping, which is a lot for a guy.  I said, you look like you could do with a drink.  He said, could I ever.  I said, would you like one?  He said, yes.  So I went and got him a drink and the moment I handed the drink to him, he got up off the couch and walked over and joined his partner at the counter.  About half an hour later they'd chosen a ring and they were on their way.  Now what would that clients experience be when he told his friends. 

Was it completely different to any other experience that he'd had along the way?  That's what I want my clients to have, a lasting impression.  Because when they have that lasting impression, not only will they come back, but they will tell all their friends, and most importantly in this digital landscape, they’ll write you a good review online and that will help you get more better business.  But there is also a second kickback that comes from having a framework like this, your staff will actually get a kick out of delivering amazing service, because they'll get complimented by the client.  That leads to high job satisfaction, higher job retention.  So do you have a framework in your business for delivery of phenomenal client experience? 

Peter Drucker once said that business is really marketing innovation.  The Australian digger was well renowned for making something useful out of nothing to improve his life efficiency.  So are you coming up with crazy ideas of something different that you could do, or are you just doing the same thing day in, day out?  You never know, one of those crazy ideas might just work.  So I thought I'd share a few examples of some of the different ideas of things that I've implemented at Xennox.

About three or four years ago I decided to make a conscientious decision to actually really invest some serious time into Facebook.  Now it could have been Facebook or it could have been any social media, but it was just that was the one that I chose because of the very strong visual element.  Now over the last three or four years I've managed to grow it to over 20,000 likes without spending really any money on Facebook ads. 

It does take time and you have to invest the time in it.  But what you'll notice is that almost everything that I post there I always sign off with my name, so the clients know who they're talking to.  I now do more client engagement through enquiries on Facebook direct messaging than I do by conventional email.  I've actually sold rings to clients in Tasmania, New South Wales, Central Queensland and up north to Rockhampton.

The reason that they choose to buy or to do something with me is not because they've just signed on to Facebook for the first day.  They've been following me for six months or a year or two years.  The great thing about the Facebook direct messaging is that it's actually like a text message.  If you look back and scroll, you can actually see the whole flow of the conversation.  Sometimes the conversation may go over six months or a year.  Well I can actually scroll all the way up and see everything that was said on both sides.

The power of social media today is a really important element.  I think that almost any business can use it.  I'll share with you another quick story about what we did on social media.  So one Tuesday afternoon I had a British tourist that actually came into the store and she said I would like an Australian Argyle Diamond, that’s the yellow one there.  The problem is, I'm leaving the country tomorrow.  So we had nine hours to make a diamond ring.  Now the ring like this one here actually would probably normally take about 18 hours to craft. 

I actually had to use three of our jewellers, all at the same time, working on different elements to bring it all together in that time.  But I thought as a challenge what I would do is I would actually document the process and put it on the social media.  So along the way I said to our followers, I said here is the challenge, we have to make a ring in nine hours do you think we'll make it?

Along the way I posted progress photos.  At some point the next day I actually had to make a lunchtime reservation somewhere and the lady asked me for my email address and I said it was info@xennoxdiamonds.com.au.  She said, have you made the ring yet?  Is it all finished?  So somebody that was completely unrelated to the actual client that was in the store, had been vicariously following the progress.  So I think there is so much that could be said for that.  Needless to say, we made the ring in time, the client was very happy and on her way.

Another crazy idea I had was, well when clients are buying an engagement ring, what is most likely the logical next step?  A wedding.  A honeymoon.  So I thought, well what if when the guy buys an engagement ring, what about if we gave him a free honeymoon overseas?  So it was a pretty crazy idea.  We ran the promotion over two months and we actually sold or gave away more than 35 of those holidays.  So rather than discounting or getting into a downward spiral of reducing your prices, one of the things that I always look to is to value add.

How can I add more value that makes myself stand out better than the competitors that we have?  Just going back to the slide before, with the making, I really believe that in this time a lot of let's say competitors are looking to outsource their labour.  I really think that we're bucking the trend going the other way.  At the moment now we have four jewellers on site, which is probably Brisbane's largest independent manufacturing workshop. We have plans to grow that even more in the coming year to two years. 

So I think that if I can do it, then all of us can do it.  So I guess I would ask you, do you have any new and crazy ideas?  I love listening to crazy ideas because you never know what you can take from it.  So to cap up, really the best team strategy is going to be your way to build your team from within.  Think about who you would like your ultimate team to be and look for those people.  I can't stress that enough to aim for a world class service.  Develop a framework that makes it very easy for your team to deliver phenomenal service, and really be clear on your vision and your mission and purpose. 

Make sure that all your staff know what it is.  Can they actually tell you what it is?  Can they tell your clients what your vision and mission and purpose is?  Develop an innovation idea strategy with crazy ideas that you never know might just work.  If you can do all of that and pull in altogether these strategies, and have your team work exactly the way that you want it, to finish with a military term, you'll be firing at full charge, which is basically full steam ahead.  That’s really for the boys in the room.

So if you want to connect with me, these are some of the social platforms that I'm on.  That's obviously Twitter, Facebook or Instagram, but I'm also more than happy to talk to any of you.  I’ll be hanging around afterward with the Lord Mayor.  If any of you would like to come up or ask me some more in-depth questions about some of the things that we do in the business, I'm more than happy to talk to any of you at that time.

Go back to the Digital Business Masterclass videos.

11 February 2016