Category: Culture

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?

The Straight Line to Business Success

Walking in circlesDid you know that we humans can’t walk in a straight line without visual cues to keep us focused on our path? Not only can’t we walk straight, we actually walk in circles if we can’t clearly see where we’re going.

It seems we also drive our businesses in circles if we don’t have strong focal points like clearly defined visions, goals and strategies.

I learned this odd fact about humans walking in circles when listening to a recent NPR piece that covered a research paper on the topic written by Jan Souman, Ilja Frissen, Manish Sreenivasa, and Marc Ernst. According to the paper:

We tested the ability of humans to walk on a straight course through unfamiliar terrain in two different environments: a large forest area and the Sahara desert. Walking trajectories of several hours were captured via global positioning system, showing that participants repeatedly walked in circles when they could not see the sun. Conversely, when the sun was visible, participants sometimes veered from a straight course but did not walk in circles. We tested various explanations for this walking behavior by assessing the ability of people to maintain a fixed course while blindfolded. Under these conditions, participants walked in often surprisingly small circles (diameter < 20 m), though rarely in a systematic direction. These results rule out a general explanation in terms of biomechanical asymmetries or other general biases. Instead, they suggest that veering from a straight course is the result of accumulating noise in the sensorimotor system, which, without an external directional reference to recalibrate the subjective straight ahead, may cause people to walk in circles.

It’s easy to see the parallels in our business environments. Without a clear vision of where we’re going, it’s easy for “accumulating noise in the sensorimotor system” (I love that phrase) to send us off course. In the world of retail, we’re constantly bombarded by internal and external demands for short-term change. Those demands are often driven by overly narrow data analysis (such as daily or even hourly comps), emotional reactions, gut feel, wild ideas, competitive shifts and more.

So what do we do about it?

We can’t stop the noise, but we can provide ourselves some solid focal points and guide rails to keep us on a straight path towards ultimate success.

  1. Write a meaningful, compelling, and easy-to-remember vision statement

    I’ve often personally had negative reactions to even the idea of vision statements because so often they are overly wordy and meaningless to everyone in the company who wasn’t in the room when they were developed (which is generally almost everybody). A particularly bad example would be something like: “We are committed to achieving new standards of excellence by providing superior human capital management services and maximizing the potential of all stakeholders – clients, candidates and employees – through the delivery of the most reliable, responsive, flexible, and cost-effective services possible.” Too wordy. Too many buzz phrases. Not enough inspiration. Not enough meaning to most people in the company or its customers.

    All too often, vision statements like the previous example are created in a boardroom, printed on posters hung all over the company and almost immediately ignored. And then the business runs in circles.

    But it doesn’t have to be this way. A carefully created vision statement can be the focal point that drives all business decision and keeps the entire company moving in a straight line to success.

    Consider the following excellent examples and how they might guide your decisions:

    Amazon: “Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.”

    Google: “To organize the world’s information and make it universally accessible and useful”

    Ritz-Carlton (they call theirs a “credo”: “The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our highest mission.

    We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience.

    The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests.”

  2. Develop measurable goals that lead toward the vision
    There are millions of articles online (according to Google it’s more that 3 million) that explain how to set good business goals, so I won’t go into all of that.

    But I will say just creating “SMART” goals is not enough. The goals have to also be aligned with the vision and serve as milestones along that straight walk to success. It’s entirely possible to create a specific, measurable, attainable, relevant and timely goal that doesn’t progress us towards our vision. I suppose you could argue that “relevant” should be the attribute that aligns us with the vision, and it should be, but I’ve seen “relevance” twisted to individual agendas too often to rely on it without comment.

    So the goal has to lead us toward the vision. For example, a Ritz-Carlton hotel manager might have a goal that says “Improve lobby ambience scores on guest satisfaction scorecard from 83 to 85 by December 31, 2011.” That would be something that specifically aligns with the vision and tells the manager how well he’s walking the straight line to the success.

  3. Implement brand  and service guidelines to establish boundaries
    Brand guidelines are also critical to help us understand what boundaries we can work within on our straight line to success. I think of them almost as swim lanes. We might not swim perfectly straight, but as long as we stay in our lanes we’ll have the latitude to deal flexibly with changing conditions while continuing to head toward our vision. Consider Ritz-Carlton’s 12 service values:

    1. I build strong relationships and create Ritz-Carlton guests for life.
    2. I am always responsive to the expressed and unexpressed wishes and needs of our guests.
    3. I am empowered to create unique, memorable and personal experiences for our guests.
    4. I understand my role in achieving the Key Success Factors, embracing Community Footprints and creating The Ritz-Carlton Mystique.
    5. I continuously seek opportunities to innovate and improve The Ritz-Carlton experience.
    6. I own and immediately resolve guest problems.
    7. I create a work environment of teamwork and lateral service so that the needs of our guests and each other are met.
    8. I have the opportunity to continuously learn and grow.
    9. I am involved in the planning of the work that affects me.
    10. I am proud of my professional appearance, language and behavior.
    11. I protect the privacy and security of our guests, my fellow employees and the company’s confidential information and assets.
    12. I am responsible for uncompromising levels of cleanliness and creating a safe and accident-free environment.

Of course, the entire process is not as simple to implement as it is to write about. But I’ve found over the years that dedicating considerable thought to providing clear, compelling direction for all employees to follow a relatively straight line can help prevent destructive business circles and keep us on the straight line to business success.

What do you think? What types of business direction have you seen that worked best for you? Would you share some examples? How about the opposite? When have you seen it all go horribly wrong? What can we learn from those failures?

Retail: Shaken Not Stirred by Kevin Ertell


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