Treating Employees as Customers

Consider this question: Whose needs must be met first for businesses to succeed – the shareholder, the employee or the customer?

For some people, the answer is clear cut, a no-brainer. Others will reply, “it depends” as the answer will be found in the most compelling case made by any of the three stakeholders. For me, the answer is obvious—it’s the employee. When it comes to creating the conditions for business success, the needs of the employee must always come first. Customers and shareholders ultimately benefit from the contribution of employees who either make or break the success of the business.

This way of thinking is quite similar to the philosophy of Herb Kelleher, former CEO of Southwest Airlines, a company that was consistently successful while its competitors endured bankruptcies and losses. Building a strong corporate culture that emphasized good, fair treatment of employees and making work fun has been the hallmark of Kelleher’s tenure and legacy. Southwest employees are treated well. They love their jobs and it shows in the way they treat their customers.

Treating employees well leads to “greater discretionary effort” – another way of defining employee engagement. Greater discretionary effort means that employees go way beyond their job description. Gallup reported that 71% of American employees are not engaged in their jobs. The Canadian Human Resource Centre reported that 75% of employees in this country are not engaged. The Centre estimates that unhappy, disengaged employees cost the economy $350 billion annually in lost productivity. No one can deny that low employee engagement adversely impacts productivity, innovation and business success. It’s time for companies to think differently about the ways in which they can instill and nurture an engaged workforce.

A new way of thinking
What if employers were to treat employees as customers? This is an idea worthy of consideration. If a company found that 70% of its customers were not engaged or loyal to its brand, this would certainly be cause for alarm and action. The high level of disengagement would certainly not augur well for the future success of the company. The marketing department would be mandated to immediately gather customer feedback, identify and understand the underlying causes of disengagement and dissatisfaction. Steps would be taken to communicate and engage with customers, in ways that build understanding and trust. Resources would be found to remedy deficiencies in product quality and service delivery.

Yet this is not the case with employees.

If employers were to see their employees as customers, they would take a similar approach to redress the adverse results revealed from employee engagement surveys. Correctly applying marketing principles and models would positively impact the outcome of internal communications efforts, the ways in which training and organizational development needs are met and the design of benefits plans and compensation programmes.

Taking steps in the right direction
Finding out what employees think, their values, preferred communication channels and styles are essential components in the development and delivery of every kind of employee programme. The following suggestions on how employers may treat employees as customers are similar to the way in which successful companies uncover customer needs and respond to customer concerns.

  • Listen, act and measure. Survey employees often to uncover sources of satisfaction and challenge to the way they do their jobs. Take action to respond to survey results. Measure satisfaction and engagement and track year-over-year progress.
  • Segment and adapt. Identify demographic groups and treat each group as a market segment in the same way that marketing does with the organization’s clients. Segmentation should guide the format of various programs and initiatives – e.g. the use of
    internal communication channels, the range of options in benefits plans and socially responsible activities.
  • Treat employees as adults. Empower employees to make decisions that meet their needs – e.g. provide sufficient information to support the selection of options for their benefit and pension plans.
  • Communicate clearly and often. Provide access to communication channels that allow for open and transparent communication and ensure that any promised follow-up action is taken and communicated. Town hall style meetings with senior executives provide forums for explaining in-depth the reason for changes in policies and programmes that impact employees.
  • Give employees reasons to be loyal. For example, implement career development programmes and encourage learning and innovation. Keep employees informed about the role they play in the company’s success and reward fairly those whose contribution impacts the achievement of corporate goals.

This post was published on Your Workplace, 3 April 2013.

See the BIG picture.  Focus on what’s important.


Dismantle silos for effective change

According to research by McKinsey & Company, about 70% of all organizational changes fail. Often, such failures are blamed on staff or on external constraints, such as cost, workload and legislation. Some say that it’s the fault of executives and middle managers who resist change to protect their areas of influence. Others cite the lack of clarity and misalignment of goals, objectives and commitment to change objectives.

One thing is for sure; it’s not the employees on the floor who cause change to fail. Front-line employees and those without management functions are not the ones who have a responsibility to manage change. That job rests squarely on the shoulders of the leadership team.

The underlying reasons for failed organizational change all relate to the lack of clarity and consensus particularly around fundamental corporate definitions. When you ask the questions, “What’s the corporate strategy? What does our brand stand for? What’s our mission?” you undoubtedly will get different answers from what is written on paper with the explanation from employees that what’s on paper is not what is experienced on a daily basis.

What can we do about this?

The lack of clarity and consensus is often the result of corporate silos—teams of people working on different priorities and having differing understandings of the corporate mission, vision, strategy and brand. They work separately, siloed in their areas of expertise, which doesn’t lend itself to a unified push in the same direction towards the desired organizational change and transformation. Consider the following:

A company wants to introduce new products that target an expanded clientele including customer segments that differ from its current customer base. To deliver the new products and serve the new customer segment, the company needs to recruit new employees skills that differ from the current employee base.

This scenario will impact the corporate culture, the corporate brand and the employer brand, and effort will need to be expended to ensure that current employees navigate the organizational changes, remain engaged and are retained.

The responsibilities and accountabilities for the development and management of the corporate culture, employer brand and corporate brand reside in different departments. HR is responsible for recruitment. Brand and company reputation are key factors in attracting and retaining talent, but HR does not control company reputation, external perceptions and image or the value of the corporate brand. People are the key factor in delivering the brand’s promise to customers, but marketing doesn’t control employees’ understanding of the brand, living brand values and delivering on the brand promise. Line managers are responsible for managing employees and steering them through change, and also for making recommendations for budgets and other resource requirements to effect change. But it’s the CFO who approves the budget and is responsible for assessing the impact of costs on the bottom line.

What’s the solution?

What really ought to happen is that HR, marketing and all other departments—sales, customer service, finance—should be working together to develop a fully integrated and aligned employee and customer experience that reflects the change that the organization is trying to implement. This can be achieved in the following ways:

  • Build consensus and executive buy-in. Agree on the objectives of the desired change and related impacts on the definitions of the corporate mission, vision, strategy and brand. This requires a cross-functional, multi-disciplinary approach. All executives must be involved.
  • Involve people in the change process. A good example is Meals on Wheels in the USA. Budget was approved for the purchase of special software to manage an expanded volunteer base, meal distribution and accounting. It was staff that helped bring each other up to speed on the new software that made the change effective.
  • Sponsorship in the form of an executive leader who will champion change and send a clear message that management is serious and supportive of change.
  • Transparent communication first – Make a compelling case for change at all levels of the organization. Clearly define what change and success will look like and the benefits to all stakeholders.
  • A well-planned and organized approach – Organization and planning always contribute to success. The plan should include actions to anticipate and address resistance to change.

This blog was written for YourWorkplace and published on 30 January 2013.

Employer brand – the solution to employee retention and engagement

Recruiting and retaining top talent continue to be  major, costly challenges for organizations that jeopardize business success. It’s been estimated that it costs up to 18 months’ salary to replace a manager and up to six months’ salary to replace an hourly-paid worker.  It can cost up to 3 times the salary if the employee departs in the first year of employment.

  • 22%  turnover occurs in first 45 days of employment.  This statistic is taken from a 2007 study.  The statistic may have changed since then.  In spite of  adverse economic conditions, a survey conducted in 2011 revealed that 59% of HR professionals in North America say turnover rates will get worse in the next 5 years!

If we put cost implications aside, low employee engagement is often cited as a major reason motivating employees to leave, regardless of tenure.

Employee engagement

Loosely defined, positive employee engagement may be considered as the personal (intellectual and emotional) commitment of the employee to work towards achieving the goals of the organization.  Determinants of positive employee engagement generally include alignment of personal goals and values with those of the organization, opportunities for personal and professional development, the nature of the job assigned and a sense of belonging and pride from being associated with the organization.  Low engagement results in dysfunctional work relationships, lower productivity, no discretionary effort.

The BIG picture

In my view, corporations need to see that employee engagement and loyalty are only two, albeit important, components of a much bigger issue – the need to engage employees to create and sustain business success. To reduce turnover rates and increase employee engagement, organizations must see the big picture:  the inspiration, motivation and effort of all employees, who understand the vision, mission and objectives of the organization, the relevance of their role and the benefits they derive from contributing to business success.  The development and on-going management of a well-defined employer brand is the key to creating a work environment where employees are engaged, loyal and working towards the common good of all stakeholders in the business.

Well-defined business brands give expression to “what’s in it for me, the customer” and offer value propositions to attract and retain customers. So too must the employer brand clearly express to potential and existing employees, why the organization is a great place to work, and bring its values to life in the experience of employees throughout their career.  A well-defined employer brand should consist of three components – the why, how and what’s being offered by the employer and what the employee can expect in return for performance and effort:

  1. Relevance: provides answers to Why? Why is the company doing what it’s doing?  What is the company’s business brand, mission, vision and values…  THEN why do you need me, the employee?? Why are you using my skills ? What’s the connection between my role and the business brand promise? Why am I here? How will my skills be used to bring value to the company – make its vision, mission and brand promises come alive, so that I contribute to the creation of conditions for sustainable business success? Why should I be loyal to the company?
  2. Relationships / Resources:  How?  How will you make me feel connected to the ‘why’? What’s the corporate culture like?  How do people work together? How can I access resources to make me contribute to the success of the company? How will I be supported to be the best I can be ?   Will my opinions be heard?  How will I be treated if I make a mistake?
  3. What’s in it for me the employee? What rewards / recognition do I get? What behaviours are rewarded?  In what ways will good performance and discretionary effort be recognized?  What can I expect in terms of promotions and opportunities for personal development and advancement?  In what ways am I being recognized as a parent, a human being, someone who has needs beyond a paycheck?

Walking the talk – putting the employer brand into action

Equipping employees to deliver on the business brand is at the core of employer brand management.    Beyond recruitment, on-boarding activities, compensation and employee benefits, organizations must demonstrate that that they are delivering on their employer brand promises through on-going career development programmes, mentorship, improvement of the work environment, staff-conferences and forums, team building and other activities that reinforce the organization’s values, culture and desired behaviours.

When these programmes equip employees to deliver the business brand promise, the conditions are created for alignment of employee behaviours with the organization’s vision, strategy, goals and objectives.  When these programmes are viewed by employees as convincing proof that the employer has delivered on the employer brand promise, the conditions are created for employee loyalty and engagement.

Capital One – a good case in point

In a recent presentation at Your Workplace Conference, Jenny Winter, Chief People Officer at Capital One highlighted how the company’s business and employer brands are aligned.  Captial One identifies its business brand values as ‘excellence’ and ‘do the right thing.’   They promise that they will meet customers’ needs and will challenge themselves to find better ways of serving customers.  These are the hallmarks of their business brand.  The employer brand promise is aligned to the business brand promise to employees as follows:

  • Why? Employees get to contribute to high-performing teams and create products that are relevant to customers – clearly in line with the business brand promise to meet customers’ needs and find better ways of serving them;
  • How does the company equip employees to do this?  Capital One provides them with opportunities to learn and grow in a fun work environment
  • What can employees expect to get in return for their efforts, beyond the paycheck?  Work-life balance and various rewards and recognition.

Check out what employees have to say about Capital One. 

A final word…

After all is said and done, the credibility of an organization’s business brand is proven when customers experience the brand promise in their interaction with the organization and its employees.  Employees who experience the employer brand promise in the workplace are motivated, engaged and loyal to the organization and its goals.  Engaged, loyal employees, regardless of their role, are the key to success in every organization.

See the BIG picture. Focus on what’s important.

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