Last week, the Disruptive Innovators Network took us on a 'virtual' study visit to AO. The study visit, which was the first to be hosted by DIN on Zoom, saw a number of members come together to hear more about how the company has managed to not only survive during the COVID crisis but thrive. Study visits like these are important because they give us space to take a step back from looking at problems through our own lens and provide us with a different perspective. Through the inspiration and ideas they provide, they can act as a catalyst, albeit often a slow-burning catalyst, for innovation.
So, why should we be interested in AO?
There are an estimated 4 million people in the UK living without an essential appliance. Studies show that not having access to washing machines and other white goods can place a significant strain on family life and can detrimentally affect standard of living. AO estimate that not having a working fridge can increase household grocery shopping bills by around 47% and as part of their commitment to social corporate responsibility, they have provided around 55,000 appliances to customers. As a number of those 4 million households are likely to be living in social housing, that’s something we should all be interested in.
Unsurprisingly for an online retailer during a year of lockdowns, AO has been busy over the past 12 months. More surprisingly, over the same period, they have managed to grow from 3000 employees to 4000; no mean feat when you consider they all had to be onboarded remotely and AO place such a high focus on company culture. However, as have many organisations, AO quickly found that things that they thought couldn't be done, such as having the contact centre work remotely, could actually be achieved - it is believed this success owes a huge amount to the strong company culture that prevails.
Whilst the company culture part of the presentation used similar rhetoric to what other similar-sized organisations may also share, there did appear to be a particular stand out feature that is potentially the thing that sets them apart. At AO, the culture is set by the CEO himself. This means that whilst those colleagues who don’t live the culture ultimately find it difficult to get along, those who share the same mindset are able to flourish. It’s a culture that is centred around challenging the ordinary, rewriting the rule book, doing things differently, doing things right and ultimately, delighting the customer. In order to help achieve this, AO has made a commitment to innovation and as a result, they are constantly testing the user experience in a range of ways. However, AO understands that whilst they may be an online retailer of appliances, they are fundamentally a people service. Customers are attracted and retained through the relationships they make with the people who deliver and instal their products and those that help them out when things go wrong.
“Treat customers like your gran and make decisions that your mum would be proud of.“
The AO team shared many stories of colleagues going above and beyond to please their customers and considering the service standard appears to be pretty high to start off with, that might explain a great deal about their success. Unlike other retailers, AO sell, deliver, install and take away old items. Customers are contacted in advance of their delivery and talked through what will happen on the day. As someone who had to haul his last new washing machine into the back of a family car, drag it into the house and install it himself - before having the headache of disposing with the broken one, it’s a service which really appeals to me.
In large part, AO is able to offer the service because they have been able to commoditise the unwanted items they takeaway through their state-of-the-art recycling plant in Telford; one of the most efficient facilities of its kind in Europe. The plant means that AO is one of the UK’s largest recyclers of fridges and other Large Domestic Appliances (LDAs) - 20% of all fridge freezers recycled in the UK are processed in the AO plant. Appliances that have reached the end of their life are given the full AO Recycling treatment – they are broken apart and sorted into their constituent metals, plastics and insulation foam. Wherever possible, machines are repaired and refurbished for resale. Nothing is wasted. Refurbished washing machines, fridges, tumble driers and fridges are sold on via trade outlet shops. It’s a safe, responsible, and sustainable process which places a heavy focus on the circular economy.
“We make would-be waste great again, by turning these old fridges, washing machines, tumble dryers and dishwashers into valuable resources.”
So, what can we take away from our study visit that could apply to us?
Culture is shaped at the top but forms at the bottom - For any culture to permeate to the customer it must be lived by every member of the organisation.
The circular economy is important - As a builder of new homes and a decommissioner of old homes, how can we find new ways of working which support the circular economy and enable us to think about components in terms of cradle to cradle, rather than cradle to grave.
Understand user need and aim to exceed their expectations - We provide homes to live in, but what do people actually need? How can we continue to find ways to go above and beyond for our customers which embodies the AO spirit of delivering, installing, and taking away?
Build the infrastructure which will enable you to realise your ambitions - Having a vision is one thing, but being able to realise it is another. As housing providers, what is the infrastructure we need to invest in in order to ensure that we are able to deliver that vision - above and beyond traditional IT housing management systems?
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Photo Credit: AO.com