Did Restoration Hardware CEO’s customer service rant go too far?
About a month before reporting fourth-quarter results that were well below plan, Gary Friedman, Restoration Hardware’s CEO, wrote a searing memo to employees comparing its operations to a burning building and threatening to fire employees who didn’t raise their commitment to customer service.
The e-mail — obtained by Bloomberg and confirmed by Mr. Friedman — followed a meeting by the CEO with executives and vendors over customer service issues and late deliveries. Beyond its aggressive tone and dire imagery, the memo stood out for its use of all-caps.
Among his statements:
- “We were sitting there discussing how the building caught on fire, why the building caught on fire, how long we expected the building to continue burning, NO ONE WAS FOCUSED ON THE PEOPLE IN THE BUILDING WHO WERE ON FIRE. THEIR CLOTHES BURNING, AND MANY OF THEM DYING. WE HAVE LET CUSTOMERS DIE.”
- “WE CANNOT AFFORD TO LOSE ONE SINGLE CUSTOMER. NOT ONE. YOU WILL NEVER GET IN TROUBLE FOR MAKING A DECISION TO DELIGHT OUR CUSTOMERS. YOU WILL, HOWEVER, LOSE YOUR JOB IF YOU DON’T.”
- “We need a MASSIVE CHANGE IN OUR CULTURE AND ATTITUDE RIGHT NOW. THE GOAL IS DELIGHT.”
In an interview with Bloomberg, Mr. Friedman said he frequently sends companywide messages to avoid communicating “through 15 layers of management” and said the urgent tone was designed to empower employees. He said, “We have a leadership culture, not a followship culture.”
Writing for The Washington Post, Jena McGregor seemed to find the memo refreshing, noting that CEOs typically use “euphemistic lingo” full of opaque initiatives and “MBA-approved phrases” to address staff during tough times.
Restoration Hardware blamed its quarterly shortfall, announced Feb. 25, in part on the impact of the weak stock market on high-end spending, poor economies in oil-dependent states, and product delays. But Mr. Friedman also announced several internal initiatives Restoration Hardware is taking to “strengthen” operations, including elevating the customer experience.
- RH Chairman And CEO Provides Business Update And Preliminary Fourth Quarter And Fiscal 2015 Results – Restoration Hardware
- Delight the Customer or LOSE YOUR JOB: Restoration Hardware CEO Sends Scorching Memo – Bloomberg
- Why the CEO of Restoration Hardware may have written this BLARING ALL CAPS MEMO – The Washington Post (tiered sub.)
- Restoration Hardware is falling apart – USA Today
- Why Restoration Hardware’s CEO Went Nuts at His Staff – INC
Photo: Restoration Hardware
DISCUSSION QUESTIONS: Did Gary Friedman go too far in his memo to employees? For you, who stands out as a model for the way CEOs should best communicate with employees?