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Warmth and Competence: The Winning Combination

November 10, 2013

9781118611319_cover.indd As human beings we’re constantly sizing up others, trying to determine their motives, whether they’re genuine individuals and what the impact will be on us personally. It comes down to two kinds of judgements that primitive humans used:
a) what are the intentions of others towards me?
b) Are they capable of carrying out those intentions?

In a modern context, these judgements are manifested in two forms of social perception: warmth and competence.

This forms the core of a fascinating new book which takes the reader on a journey of how people interact with one another and how they identify with the products produced by companies. The Human Brand: How We Relate to People, Products, and Companies is a concise, highly readable book that’s packed full of numerous examples of the successes and failures of well-known companies. From Amazon to Zappos to Lululemon to many more, the authors explain in clear terms how these companies created loyal followings through their brands, and in some instances dealt with customer backlash.

Chris Malone has worked as a consultant with numerous organizations, from start-ups to Fortune 500. He has over 20 years of experience sales and marketing in such industries as hotel management, manufacturing and professional sports. Susan Fiske is a psychology professor at Princeton University, where her work includes cognitive studies. She has written over 300 publications and won several scientific awards.

The reader is immediately drawn into the book from page one through the use of an example of which virtually everyone is familiar to some degree. The warmth and competence dual concept could seem remote to some, except that the authors use the television show Survivor as their first example. When one reflects on the show’s past contestants, the concept makes sense.

The authors explain that the individual who’s able to show both warmth and competence creates feelings of trust and admiration within us. However, if that person exudes warmth in the absence of competence we’ll feel sympathy or pity towards them. Change that to someone exhibiting competence without warmth, and the result is our feeling suspicious towards them. And when both warmth and competence are missing, the consequence is contempt and even disgust.

Photo 1 Human Brand Survivor is a great example to use because of its general popularity over a decade and because of the wide variety of characters (contestants) who have been part of the program. And for those not familiar with Survivor, or not a fan (such as yours truly), the program spawned huge interest for several years among those involved in corporate team building, not to mention authors and university business teachers.

The authors segue to how the warmth-competence concept relates to marketing and how companies attempt to build brands with loyal followings. In launching into the main part of their book, they note that large companies have been working diligently at altering our expectations in the opposite direction of our human instincts for warmth and competence.

Let’s take a look at their chapter, The Loyalty Test. Just as with someone who is perceived as being honest and reliable, showing concern for others, exhibits warmth, so too can companies. For example, those that are highly responsive to their customers’ diverse needs and wants are seen as being warm. These companies have created through hard work trusting relationships with their customers. The authors use Nordstrom, a high-end department store chain, as an example. Indeed, Nordstrom has developed the reputation for legendary customer service. Perhaps a better example is L.L. Bean, the Freeport, Maine, retailer which has been in business since 1912.

Regardless of one’s favorite examples of companies with phenomenal service, the authors poignantly sum up the loyalty test with this comment: “When a company or brand goes above and beyond normal expectations to express worthy intentions, it turns loyal customers into passionate advocates who actively recommend others to them.”

This takes the book into one of the most interesting chapters, The Principle of Worthy Intentions, where the Lululemon story provokes a remarkable illustration of what happens when senior management takes it eye off the ball–an excellent mini case study on misdirected leadership.

This upstart company began in 2000 in Vancouver. Initially one location, the store sold yoga clothing. But in a matter of a decade, the company mushroomed to over 200 stores spread across North America and parts of Australia. Lululemon’s rapid growth combined with the creation of an intensely loyal following confounded market watchers. The company mastered the powerful combination of achieving a degree of warmth integrated with competence. Customers are called guests, each store forms a community unto itself, and local yoga and fitness instructors are called community ambassadors, receiving discounts on clothing and receiving free advertising online.

Lululemon’s rocket ascent almost came crashing down in early 2013 due to a product recall (the infamous see-through yoga pants.) Its winning formula of “worthy intentions” through strategic relationship building came undone as loyal customers exploded in fury at what they saw was a breach of trust: the warmth had vanished and the competence greatly weakened. One rumor abounded that women who wanted to return the see-through pants were being asked to bend over. The company’s stock plummeted and market observers speculated about its future.

This story is perhaps the most powerful example in the book. It is a brilliant example of leadership gone astray, having grown arrogant and sloppy because of the company’s huge success. The fallout for senior management was swift: the head of products resigned and the CEO later stepped down.

The see-through yoga pants fiasco was responsible for a $60 million loss in revenues; however, Lululemon’s reputation and its previously thought bullet-proof brand took an incalculable hit.

Businesswoman Writing on White Board and Businessman at Table In a later chapter, Take us to Your Leader, the authors discuss some other prominent corporate leaders who have weathered certain storms. The well-recounted 2009 turn-around by Domino pizza king Patrick Doyle was based on the self-admission that the company’s pizza “wasn’t very good.” Domino’s post-confession strong growth is an example of being straight with customers and the general public. Warmth (empathy for customers) combined with competence (making decent pizza) proved to be the company’s winning formula.

Other CEOs have not been as bright and strategic, as exemplified by for BP’s CEO Tony Hayward who self-destructed during and after the Gulf of Mexico drilling disaster. The company’s reputation hit bottom and has remained there.

The authors take a brief romp through the topic of transformation-transactional leadership in this chapter. Domino’s Doyle is pointed to as a transformational leader because of his decision to hit the reset button and to start from scratch. It was about leading by example.

The Chapter Show Your True Colors contains another powerful example of a multinational company which had become too big, too arrogant and, eventually, too careless in its manufacturing operations. Toyota and the stuck accelerator pedals was all over the news for months. A company that had the highest owner loyalty ratings in the industry in 2009 found itself in free-fall as case upon case of accelerator problems surfaced, seized by the media with glee. The U.S. transportation and safety agency lost patience with Toyota, demanding all its records, including engineering reports. Congress sent in its own investigators. In the end, Toyota paid out the largest fine in the agency’s history: $70 million.

In the span of just two years, Toyota’s market share dropped from 17% to 12.6%. The company’s new president in 2010 spoke to a committee of the House of Representatives, promising that such a problem would never happen again, admitting that Toyota’s rapid growth had come at the expense of consumers.

Later in the chapter, the authors explain the warmth-competence mismatch between what consumers expect to hear from companies facing a crisis and how executives want to respond. The CEO proud-face media respond is one with which we’re all too familiar–the competence approach. Yet what we desire, as the authors point out, is warmth. As they state:
“If our internal warmth detectors are not satisfied that a troubled company has worthy intentions towards us, then we naturally suspect that its leaders’ assertions of competence are aimed at preserving the company’s profits first, and our interests second.”

The last chapter The Relationship Renaissance nicely brings the book to a close. The authors present three imperatives to assist corporate leaders ensure that they integrate warmth and competence into their daily leadership activities. Briefly, the imperatives comprise:

1) Become More Self-Aware
To achieve a high level of trust and loyalty from its customers, top management must commit to measuring and managing perceptions of their warmth and competence, just as carefully as with their financial performance.

2) Embrace Significant Change
If a company wishes to embrace the concept of a Relationship Renaissance, then senior leaders must ensure that everyone in the organization is engaged, wanting to be better people and to act with worthy intentions.

3) Fundamentally Shift Priorities
For lasting change to occur it’s necessary to re-examine and, if needed, adjust goals and priorities. Long-term success means to shift the emphasis from short-term shareholder value to one that is more balanced, encompassing customers, stakeholders, shareholders and employees.

This is a stellar book.

Although The Human Brand is ostensibly a book about creating and sustaining brands, at its core it’s about leadership. Throughout the book I was thinking about the implications for leadership and followership. And as much as I wanted to read more, and especially would have loved to see the authors delve directly into leadership, I appreciated their method and preference for a tightly written business book. And it leaves the opportunity for them to continue their research and writing on to another joint book.

Be sure to check out The Human Brand.

In this age when reputations can be made and broken around the world in a single day, our capacity to express warmth and competence in among our most precious assets.

– Chris Malone and Susan Fiske

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4 Comments leave one →
  1. November 13, 2013 2:14 pm

    Thanks Chris. Arrogance and perhaps even a level of contempt towards some consumers seem to have been byproducts of Lululemon’s rocket-fueled growth.

  2. Josh permalink
    November 11, 2013 1:58 pm

    It will be interesting to watch how Lululemon handles the most resent snafu with their founder talking about who should and should not wear their clothes…

    • November 11, 2013 3:05 pm

      Yes it will be, Josh. I just saw the news yesterday. Thanks for stopping by and sharing the link.

      • November 13, 2013 4:43 am

        Jim, thanks for your thoughtful review. Josh, to your point, I’ve been watching the Lululemon story unfold over that past week or so thinking that this company is at a real crossroads in their history right now. I fear they are taking on more and more of the posture of a publicly traded company that has lost sight of the “goodwill toward others” philosophy that made them successful in the first place.

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