Posts tagged: objectives

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?

Twitter: A model for a people focused business strategy?

I am truly impressed with the way Twitter combines a very rigid constraint with an incredible amount of openness to create a hugely flexible service that gets better and better through the combined effort of many creative and devoted users and developers. (To be clear, I’m talking about Twitter the application/service as opposed to Twitter the company.) I wonder if such a nicely blended mix of rigidness and openness is just the right recipe for developing the type of business strategies that best leverage the power of people in an organization.

Twitter’s one rigid constraint, of course, is the 140 character limit for any one tweet. It’s an incredibly strict and inflexible constraint, but it’s well-defined, easily enforced and easy to remember. Beyond that single constraint, though, Twitter the company is extremely open about letting users and developers work within that constraint to improve the service. And improve it they have. Here’s a quote from co-founder Biz Stone’s recent blog post:

“Twitter began as a rudimentary social tool based on the concept of status messages but together with those who use it every day, the service has taught us what it wants to be. From features invented by users to applications built on the platform, we’re still discovering potential. Twitter has moved from simple social networking into a new kind of communication and a valuable source of timely information. Also, it’s fun.”

Developers have used Twitter’s APIs to create excellent applications like Tweetdeck or capabilities that have transformed the service like Summize, which created an ability to search through all tweets. (Twitter ultimately purchased Summize and created Twitter Search.)

Users also developed great innovations. The ability to search inspired someone to start including hashtags in messages to make it easier to find conversations of interest, and apps like Tweetdeck created columns devoted to search terms to make it just as easy to follow topics as it is to follow people.

And that 140 character limit? TinyURL, which to be fair was already in existence, exploded when people began to realize it could help them post URLs within the confines of the Twitter character limit.

So what does all this have to do with developing business strategies?

Over the years, I’ve seen and written all kinds of business strategies of varying levels of detail and sophistication. I’ve come to realize, though, that the most effective and executable strategies are those that have the following qualities:

1. They are easy-to-understand, support and communicate
Twitter nails this one with the simple idea that the service be used to communicate short bits of info to followers. Business strategies should do this with a clear and simple statement of purpose. This statement could be called a mission or vision statement or something else altogether, but the key is that it be clear, simple and easy to remember. Clear objectives for the strategy should also be stated, so that those who execute the strategy know what they’re working towards. For example, objectives could be increase conversion, increase market share and maximize profitability. I’ve found that three clear objectives are about as much as anyone can reasonably remember.

2. Have clear boundaries
Twitter’s 140 character limit is a very clear boundary. Business strategies can create these boundaries with clear constraints. I believe it’s OK, and sometimes even desirable, for objectives to contradict each other to some degree as a form of balance. Without the “maximize profitability” objective mentioned above serving as a constraint, we could easily spend our way to increased conversion and increased market share, but that spending could be very unhealthy for the business. Conversely, by stating that we want to maximize profitability, we are also opening the door to making all investments necessary to gain the most possible profit with our various tactics.

3.    Allow for flexibility and creativity by those executing the strategy

Twitter opened up their service via APIs and allowed anyone to improve upon the service. Businesses can do something similar by doing what I call “matching the A’s,” which are Accountability and Authority. By clearly defining accountabilities for each member of the team, and at the same time assigning matching authority, businesses can truly unleash the creativity and power of the organization to maximize the objectives. Giving members of the team closest to the actual work the authority and accountability to perform as they see best can produce excellent results. While this is easy to say, it’s difficult to do. A lot of forethought needs to be applied to ensure accountabilities are well-defined, and a conflict resolution system needs to be defined to deal with the inevitable clashes that will occur when teams with dependencies have different priorities. I’ve seen great strategies fail because effort wasn’t put into carefully defining and matching authority and accountability, so I strongly believe serious effort is required here.

So is it as easy as 1…2…3? Definitely not. Designing “simple” strategies requires an incredible amount of effort and thought, but the effort is worth it if the end result is a highly functioning, effectively executing organization. Twitter is proof-positive that a well-designed structure can enable the power of the people to elevate good ideas to incredible results.

What do you think? What types of strategies have you seen work? Do you agree that Twitter represents a good model for people-powered strategies, or do you think strategies can and should be more complex?



Retail: Shaken Not Stirred by Kevin Ertell


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