Employee Satisfaction Leads to Customer Satisfaction (and Big Profits)

“Companies with strong consumer branding outperform Standard & Poor’s index.  It’s a lesser known fact that companies with a high rating from both consumers and employees double that return.”
Carol Parish, Enterprise Global Brand Agency

Employee Hierarchy of Needs

Employee Hierarchy of Needs

I actually considered calling this post, “If mama ain’t happy, ain’t nobody happy.” In the same way that mothers are often the key connector in familial relationships, employees are the key connector in the relationships between a company and its customers. As a result, if our employees aren’t happy, our customers won’t be happy with our companies and our companies won’t be happy with the business results.

For some reason, the topic of employee satisfaction has come up in a multitude of conversations I’ve had lately. I recently had a great one with my most excellent colleague at ForeSee Results, Maggie Kalahar. Maggie had this to say:

“Employees shape the experience a customer has with your company each time they have contact, making employees the most memorable voice of your brand as they constitute the actual brand Maggie Kalaharexperience.  It’s people who ultimately deliver your brand promise.  It does not make a difference what you tell your customers about your brand if those who actually encounter the customer don’t deliver the values consistently.  For example, one poor experience with a rude sales associate at Retailer X can undo millions of dollars of brand advertising touting “The Friendly Faces of Retailer X”.  On the other hand, when employees deliver a positive experience consistent with your brand promise, your customers will in turn become stewards of your brand as well, translating to dollars for your company.”

Given the huge importance of satisfied employees in the overall success of a company, it’s surprising that more attention isn’t paid to employee satisfaction as a key financial driver. (And by the way, I’m certainly not guiltless. Sadly, it’s taken me way too many posts about other topics before getting to this important topic.)

All too often, we take our employees and their job satisfaction for granted. We focus all the power of our Type-A personalities on achieving financial results, acquiring new customers, launching new businesses, and driving customer satisfaction, but too often we forget about the people who actually turn all those action verbs into real-life actions.

We spend lots and lots of time considering our brand messaging, and we even spend a lot of time teaching our brand stewards (our front line employees, in particular) how to message our brand. But how much time do we spend ensuring our employees have the tools and the environment they need to effectively deliver our brand promises (as well as the actual desire to deliver the brand promises)? Sure, HR probably talks about it all the time, but this is not an HR issue.

This is really about the basic service every manager in an organization should provide to his or her staff in order to achieve those financial goals.

I previously mentioned putting employees first (even before customers) as one of the keys principles of a customer centric organization. The base principle is really the same as when flight attendants advise us to put the oxygen mask on ourselves before assisting our children. If we don’t provide a productive, positive environment for our employees, how can we expect them to provide the right environment for our customers?

But, man, satisfying employees is hard!

Providing the type of consistent environment required to really satisfy employees is actually a lot harder than providing the type of experience that satisfies customers. The reality is employee relationships are more interdependent, frequent, intense and intimate than the relationships we have with even our best customers. And we have so many more interactions with employees, any one of which can potentially derail the relationship if we don’t handle it correctly.

So what do we need to do to satisfy employees?

In my experience, the things that make the biggest differences are not parties, free lunches or even bonuses. Those things, while good and worth doing, are fairly temporary. They come and they go and they can be quickly forgotten if there are problems in the basic working environment.

I think the tenets of great working environments are really more akin to Maslow’s Hierarchy of Needs. Maslow’s pyramid starts with physiological needs and progress through safety, belonging, esteem and ends with self-actualization.

The Employee Hierarchy of Needs, if you will, contains a similar progression to ultimate satisfaction:

Basic tools
Certainly, a company’s employees need to have the basic tools to do their jobs. Those tools could be computers, uniforms, office supplies, etc. I don’t think many companies have big problems at this level. I would even add being paid a fair wage here. There can be little question that pay is an important aspect of any job. But getting the pay right is part of the very basic level of the working environment.

Trust and Respect
Trust and respect are the foundation of pretty much all successful human relationships, and it’s certainly no different in employee relationships. One of the best ways to assess the levels of trust in an organization is to examine assumptions regarding intentions. Do policies and procedures seem to assume the employees act on their best intentions or their worst intentions? In other words, are the policies in place mostly to ensure employees don’t do things they shouldn’t do, or are the policies in place to ensure employees have the right environment to do the things they should be doing.

Respect can certainly be gauged by how we treat each other. Do we follow the Golden Rule? In the workplace, one of the best ways to test Respect is in how input is heard from various members of the team. Are people’s ideas, when presented with thought and backed with supporting evidence, taken seriously? For the record, I don’t think “taken seriously” necessarily means the ideas are always accepted and implemented. However, if the idea is ultimately rejected, it should be rejected with the same or better level of thought and supporting evidence. To me, that’s taking an idea seriously and respecting the generator of the idea.

Matching the “A”s
This one is critical, and a mismatch here is often the source of some of the biggest problems I’ve seen during my career. The “A”s are Accountability and Authority. Many positions have job descriptions, but I’m talking about something a lot more specific and meaningful. I’ve found it’s critically important to be very, very clear about what each and every person in the organization is accountable for. This takes a lot of careful thought. Once we’ve defined those accountabilities, we have to ensure each person has the authority to deliver those accountabilities. This is hard. Accountabilities will inevitably overlap in some areas, particularly in hierarchies in the organizational structure. So the accountabilities need to be defined specifically and conflict resolution paths must be predefined. (Frankly, this could be a whole separate blog post…and maybe it will be.)

All of this is made much easier if the company has the types of vision, values and objectives frameworks I discussed in a recent post. Such a centrally defined framework provides the types of guidelines for decision-making that, while not eliminating conflicts and disagreements, at least provides a solid basis for debate and resolution.

Confidence
With a solid framework for decision-making, clear accountabilities and matching authority, employees can begin to make decisions about their daily work with confidence. As those decisions become more and more effective, employees become more self-confident. I’ve always found that self-confidence is the key to success in all aspects of life. Self-confident staff find it much easier to do what’s right for customers and for the business.

Training/Knowledge/Growth
The final layer of employee satisfaction is all about growth. Companies that invest in their employees’ growth will not only have happier employees, they will have more productive employees who generate better and better ideas for improving the company. This means mentoring employees, training them in areas even beyond their current scope of responsibilities, being more transparent about aspects of the business that are interesting to particular employees and more. Creating more skilled and more knowledgeable employees has an extremely high ROI.

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Focusing and delivering on all layers of the Employee Hierarchy of Needs can lead to the type of employee satisfaction that leads to customer satisfaction and big profits (investor satisfaction?). But there’s no question that it takes constant focus and a lot of hard work.

Behavioral economist and author Dan Ariely, in his excellent book The Upside of Irrationality, ran some interesting experiments around meaningful working conditions. He found that “if you take people who love something…and you place them in meaningful working conditions, the joy they derive from the activity is going to be a major driver in dictating their level of effort. However, if you take the same people with the same initial passion and desire and place them in meaningless working conditions, you can very easily kill any internal joy they might derive from the activity.”

We’ve all encountered employees of various establishments who’ve had their joy killed. They’re not productive and they don’t provide great experiences. We certainly want more for our teams and our companies. The alternative of course, is joyful employees, customers and investors. That’s a happy world I want to live in!

What do you think? How would you describe the Employee Hierarchy of Needs? What have you seen work and not work in your organization?

12 Comments

  • By sarahallenshort, January 25, 2011 @ 8:30 am

    Greta post, Kevin. I also love this video, which hits some similar points, and is done by a very cool animation studio that would be really fun to work with. Perhaps they should animate one of your talks or blog posts? :)

  • By Kevin Ertell, January 25, 2011 @ 3:08 pm

    Thanks for the comment and link, Sarah. That RSA animation stuff is mighty cool — as is Daniel Pink’s excellent talk. I could only wish to be good enough to have one of my talks or blogs animated by these guys. Awesome stuff!

  • By Kieran Cusack, January 26, 2011 @ 3:56 am

    Kevin, a great thought provoking article! Whilst I am not strictly in sales, I am a strong advocate for the link between employee engagement and business results. The Gallup Q12 survey of employee engagement refers to similar elements in your pyramid. I used these to engender employee support and saw real business results. Just one question – do we want to ‘satisfy’ our employees or ensure that they’re engaged in our business?

  • By Kevin Ertell, January 26, 2011 @ 10:21 am

    Thanks for your comment, Kieran. And thanks for bringing up the Gallup Q12. For anyone who’s interested, Gallup has a free white paper on it at http://www.gallup.com/consulting/121535/Employee-Engagement-Overview-Brochure.aspx.

    I think it’s an interesting parallel, and I appreciate your question about whether we want employee satisfaction or employee engagement. I think ultimately we want both. We don’t really have a shot at long-term engagement unless we have satisfied employees, so the two are tied together. I think “engagement” maybe takes the concept to a higher level, but if we actually address the Employee Hierarchy of Needs well then engagement is pretty likely to be a natural outcome.

    I’m very glad to see you got real business results from following the Gallup principles, which are excellent.

  • By Shereen Solaiman, January 28, 2011 @ 4:56 pm

    You are spot-on Kevin! Well done!

  • By Kevin Ertell, January 31, 2011 @ 8:34 am

    Thanks a lot, Shereen. That means a lot to me, coming from you.

  • By Gloria, August 1, 2011 @ 10:01 am

    nice post!

  • By Betty, October 19, 2011 @ 2:20 am

    Kevin, all great pointers and I especially backup the view that you need satisfaction before there is any hope of continuing engagement. Where do you get the time for all this deep, deep, deep…?

  • By James, March 30, 2013 @ 12:27 am

    Great Article as i got a clear idea on the importance of employee relationship and how it could effect a company. I would be much thankful if you could explain the relationship of internal stake holders(employees) using the The Commitment-Trust Theory of Relationship Marketing as it will help me prepare my assessment of CIM.

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