What Comes First: Employees or Customers?

As a business leader, I’ve always believed that one of the most important aspects of my job is to create and lead a culture that motivates employees to come to work every day and do their very best work.  I’ve always known that in order to acquire, delight and retain customers my organizations (at the local, regional, national and global levels) needed to acquire, engage and retain the best talent.  I’ve always known that the link between customer and employee satisfaction is strong.

Over the last few months I’ve been able to take the time to read some great books, articles and research reports; to meet with thought leaders and executives; and to attend conferences and courses focused on these aspects of organization and leadership success.  Now I’ve got more than a “gut” instinct that the focus on creating a culture that puts customers first by recruiting, developing and retaining the right employees brings dividends that are more than repeat customers and happy employees.  Now I’ve got real data.

Where did I get the data?  I’ve read research reports from BlessingWhite, Gallup, SHRM, the U.S. Department of Labor and others.  I’ve read books by Chip Conley, Mark Sanborn, Geoff Colvin, Leigh Branham and Mark Hirschfeld, Tony Hsieh, Jim Collins, Dave Logan, John King and Halee Fischer-Wright and Jonathan Haidt among others.  I’ve had conversations with Tony Hsieh, Dave UlrichDoug and Kimberly Rath, Cathy Missildine-Martin, Paul Hebert, Joe Gerstandt, Jason Lauritsen, Chris Hoyt, Lars-Henrik Friis-Molin, John Sumser, William Tincup and many others.  Basically, I’ve been a sponge.

And the outcome?  Well now I see clearly that while having happy, committed employees is critical for organizational success, having the right happy, committed employees makes the difference between good customer service and exceptional customer service;  the difference between good organization performance and exceptional organization performance — by any measure you wish to use. 

The right happy employees are determined by what will exceed the customers’ expectations.  And that’s about culture and values. 

To create a culture that retains happy employees feels good on many levels.  What leader doesn’t want to walk around and see smiling faces on their employees?  But to create a culture that retains employees happy to make your customers ecstatic is the secret sauce of organization success. 

The reason for an organization’s existence is not to create a “happy” environment for employees.  The reason for an organization’s existence is to create value for its stakeholders by serving its customers.  You win in business by serving your customers better than anyone else.  And it’s clear to me now that the key to serving your customers better than anyone else lies squarely in creating a culture that attracts and retains the right employees.  I’m not sure many leaders see the difference here, but it seems huge to me.

In the hard work of creating a motivating culture almost every organization starts with their employees:  what makes them happy, what will engage them, what will motivate them to commit over the long haul.  I’ve come to believe that the hard work of creating a motivating culture needs to start at a different place:  conversations with customers and potential customers.  What is important to them in their interactions with your employees?  What values will motivate their engagement, their commitment over the long haul?  Once you have that input you can begin to translate it into organizational values, characteristics, behaviors and skills that become the basis for your culture work – and, ultimately, your talent acquisition, engagement, development and retention strategies.

It’s clear to me that both culture and organization success has to start with the customer.  Only then will you know what kind of talent acquisition, engagement and retention strategies will lead to the type of organizational success that will value your organization among the strongest financial performers and land you on the lists of best companies to work for. 

In other words, when creating and leading your organization’s culture look first to your customers and second  to your employees. 

Most do it the other way around.

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15 Comments

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15 responses to “What Comes First: Employees or Customers?

  1. Greta post and nice question asked. Really appreciated. I dont know about others but my personal thought is that both customers and employees are important. Because both play a vital role at their own places in the growth of the business. We get the business from customers and our employees helps us to complete the work which we get. So nobody comes first both are important for the growth of the business.

  2. It’s all connected. Employee satisfaction (and retention) creates an environment that customers enjoy connecting to. Satisfied customers become loyal customers – those that not only return for more business, but bring others along with them. These behaviors of loyal customers cause the business to grow. As the business grows, they invest more in the people that make it happen. As employees feel invested in, their satisfaction with the organization increases, and so on… and so on…
    At the center of all of this is the supporting leadership structure that makes sure policies are customer-centric and easy for the employees to work in.
    Easy to describe – difficult to construct and effectively maintain.

    • It is difficult to construct and effectively maintain. And even though lots of great organizations have stellar engagement scores — did they start with customer needs/expectations or did they start with employee needs/expectations? I believe that if you start with customer needs and expectations you’ll get even stronger performance and even stronger engagement because you’ll be hiring to customer metrics. Thanks, John!

  3. It’s refreshing to see employee engagement discussed as a means to an end (good customer service) rather than an end in itself. Most engagement programs (from the initial survey through to the remedial actions taken) are so introspective. Maybe we need to start talking about ‘effective engagement’ rather than just engagement?

    • Oh, I really like that. I agree that most organizations look at engagement in such a limited way. If you expand your expectations for the outcomes of engagement to include more than “happy” employees and strong employee attitude survey scores, you might just increase sales and profitability! Thanks, Stuart.

  4. Nicolas

    Great article!!! Is imperative for the companies to work in improve employee’s satisfaction and they will get a higher cuastomer satisfaction and will increase their productivity. Thank you very much for this article.

  5. If this (customer focus first, then employee) is true, and I believe it is, then the linkage to profitability couldn’t be clearer. Customer needs –> hiring needs –> great people doing what they love –> profits.

    I posted late last year on the correlation between employee engagement and profitability: http://bit.ly/aykG8L

  6. Loved the post, China! As someone that has been on both “sides” of the desk as a business owner with employees, & as an employee working for large corporations….I believe that you have isolated the keys to success & the “Big Picture”! So many companies get caught up in just the “Bottom Line” & the details of the daily method of operation. We all know (I hope!)that without our customers, there IS no business! Yet, the synergistic connection between a company’s employees, their empowerment, involvement within has a direct & critical effect on the customers…which leads TO the Bottom Line! Great clarity & well put words of great wisdom.

  7. Carol McDaniel

    Great Post, China! It seems like such a simple concept when you really think about it – customer loyalty and satisfaction are so closely tied to engaged, talented and motivated employees. You can’t have one without the other – very simple formula. Why do so many companies not see that? How is it that we continue to drive this point home and so many employees are suffering in jobs they are not happy in (which directly effects customer satisfaction and revenue). Honestly, I believe that organizations fail to look at the entire story of their business. The P&L does not tell the story; the “bottom line” is not a true reflection of the culture that creates revenue. It a balance of people, process, outreach, satisfaction and loyalty – employees and customers. Thanks keeping this flame burning, China!

    • Hi Carol: thanks so much for your comments — and for agreeing with me. :-) Creating a culture for customer retention through employee engagement is different than creating a culture for employee retention and hoping that customer acquisition and retention follow.

  8. Great post, customer or employees you can’t have one without the other. Reminds me of the theme to the show with Al Bundy – Love & Marriage. I digrress – you are right employees must respond to and deal with the customers. In manufacturing we debate this – do you sell it to make it – or make it to sell it?

    Keep the good stuff coming China!!!

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