Creating a Customer Service Culture: Starts by Focusing on Employees, Not Customers

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Do you want to create a corporate culture that is focused on customer service but don’t know where to begin? To better serve customers, the first step is to focus on the employees.

It all starts on the inside. To offer amazing customer service, begin by amazing the employees. An employee-centric workplace is the basis of a customer-centric business.

A perfect example of this principle is Ace Hardware, the chain of retail stores known as “The Helpful Place.” It’s their tag line and way of life. It’s why I chose Ace to serve as the role model for my new book, Amaze Every Customer Every Time. Throughout its long history, Ace has operationalized the word helpful into its culture. Helpful goes beyond being cheerful or nice – it is a special kind of customer service and it gives Ace Hardware stores a competitive edge. They want to be known as the most helpful hardware stores on the planet … and they are. Even though Ace operates in a very competitive industry, going up against much larger hardware and home improvement stores such as Lowe’s and Home Depot, it wins the customer service game by going beyond being nice and friendly – all the way to helpful.

The secret to their success? They know – as do other successful companies – that amazing customer service begins by first focusing on the employees.

This concept is not a new or temporary idea for Ace. Since its first store was opened in 1924, this has been the culture. Management and employees treat each other with dignity and respect, and this serves as a model for how the customer is ultimately treated. Ace works hard to hire the right people for the job and for the corporate culture, and then trains them – both technically with information about the products they sell and in regard to offering Ace’s special, helpful brand of customer service.

I’ve written before in articles and social media content about my admiration for Southwest Airlines Chairman Emeritus Herb Kelleher. Like Ace, he always promoted the principle of employees first, even though it was once viewed as controversial. From the beginning, Kelleher’s management philosophy was to insist upon taking care of employees first, and the success of his strategy is another fine example that proves its value. Kelleher insisted on the approach for sound business reasons. When the foundation of your organization is built on the idea of serving the employees, serving the customers becomes easier for everyone. Kelleher had this to say:

“Years ago, business gurus used to apply the business school conundrum to me: ‘Who comes first – your shareholders, your employees, or your customers?’ I said, ‘Well, that’s easy,’ but my response was heresy at that time. I said employees come first and if employees are treated right, they treat the outside world right, the outside world uses the company’s product again, and that makes the shareholders happy. That really is the way that it works, and it’s not a conundrum at all.”

In other words, a customer-centric culture must be built from the inside out. Ace Hardware and Southwest Airlines – and other top companies – know that what is happening inside the organization will be felt by the customer on the outside.

Shep Hyken
Shep Hyken, CSP, CPAE is the Chief Amazement Officer of Shepard Presentations. As a customer service speaker and expert, Shep works with companies who want to build loyal relationships with their customers and employees. He is a hall of fame speaker (National Speakers Association) and a New York Times and Wall Street Journal best-selling author.

19 COMMENTS

  1. Shep, with due respect, “employees first” if taken literally doesn’t actually work in the real world. I suspect you’re making a lot of assumptions behind those two words, including that the work employees are doing is aligned with what customers value.

    I’ve seen examples of where “employees first” has created a kind of “country club” atmosphere. Remember the “dot coms?” Their employees had free lunches and lots of perks, and no doubt appreciated being treated so well… right up to the time the business went under.

    More recently, Groupon’s CEO lost his job despite treating his employees really well. Founder/CEO Andrew Mason was fired for a plummeting stock price and poor business performance, just 15 months after the second largest IPO in US history. In his resignation email, he acknowledged that a lack of customer focus was his downfall: “I let a lack of data override my intuition on what's best for our customers.”

    Likewise, “customers first!” doesn’t work if it creates an environment that is toxic to employees. Doing anything the customer wants in the name of customer-centricity is another going-out-of-business recipe.

    To suggest employees or customers come first, is like deciding which of your legs is more important. You need them both to move ahead.

    In the end, I still say that customers pay the bills, not employees. If customer needs are not met, it doesn’t really matter if employees come first, does it?

  2. Hi Bob – In certain situations I could agree with you, however if you have great business sense and run an efficient company, you miss opportunities by not being customer focused. And, I still say that if you want to be truly customer focused, you must start with being employee focused. Treating employees like customers should be treated is a start.

    Conversely, and I think this is where you are coming from, if you have the great service and even a wonderful work environment, without the right product, you won’t survive.

    It takes the combination of both to succeed in business.

  3. When Kelleher set up Southwest, he focused on delivering a service that customers would value, while disrupting the industry. He wanted to offer low-cost, friendly service, not a combination that was common 40+ years ago, and still isn’t.

    He didn’t launch the business by saying: “What kind of business would employees really enjoy working in? Ok, let’s create that, then figure out how we’ll make money with a great place to work.”

    Again, I’ll disagree with you about where to start. You say start with employees, I say start with customers. But either way, you need to deliver value to both to survive for long. We’re talking about an interconnected value chain. You can’t really “start” somewhere, it all has to work at the same time.

  4. I think we could have some interesting dinner conversations. (HA!) An old saying: Begin with the end in mind. Which may mean to start with thinking about the customer. Then step back and focus on the employee.

  5. …of the same key issue. Early thought leaders like Herb Kelleher, Jan Carlzon, Horst Schulze, and Hal Rosenbluth, and more recent exemplars like Tony Hsieh and Chris Zane, haven’t been so preoccupied with whether the customer value proposition or employee value proposition comes first – what I identified as chicken/egg and cowboy/saloon riddles (http://www.customerthink.com/article/customers_or_employees_which_came_first) – they saw that both were needed. Once the strategically differentiated value, i.e. the functional and emotional benefits, of the product and/or service are established and actively being delivered, and along with a customer-centric culture and processes, it takes the involvement, creativity, teamwork, proaction, and leadership of motivated employees – what I define as employee ambassadors (going beyond the alignment and commitment of engaged employees) – to sustain and advance the success achieved with customers.

  6. Absolutely true in the case of Discount Tire, which sells a commodity product and wins huge loyalty by focusing first on employees. A bio of the company’s founder, “Six Tires, No Plan,” traces the success that comes from motivating employees and rewarding them the right way…and then having them pay it forward to the customer. Good case study.

  7. This has been a great discussion. I see the points. My response to all of this is that we know the goal, and so we begin with the end in mind. Let’s assume the company’s product/service does what it’s supposed to do and people are willing to pay for it. (Something some of the dot.com’s didn’t have.) We want to be customer focused. So how does that get started? Internally with the employees. So set the goal (customer focused) and start the process (employee process). Check out the blog post at http:// http://www.CustomerServiceBlog.com.

  8. Shep, great to see you coming around to agree with me. Customer-centricity starts with customers. 🙂

    I think it’s a tremendous leap, though, to assume that companies want to be customer focused, and are delivering a product/service that’s doing what it’s supposed to do.

    Those pitching “employees first!” seem to be making that assumption. But in fact most companies *don’t* know what customers value and *aren’t* delivering products/services that work well. The Bain study (among others) finds it’s quite common for companies to think they are doing a much better job serving customers than customer think they are.

    That’s why simply focusing on employees is only half the solution. It makes a leap of faith that increasing employee satisfaction/loyalty/engagement (pick your term) will translate into business results. Sometimes yes, sometimes no.

    In your post you seem to be arguing two thing simultaneously. First, start with the end in mind — what do customers value, Then, start with employees.

    This is exactly the problem, you have to satisfy both to prosper. I really don’t agree with the idea of starting with one or the other. Real businesses don’t work that way. You have to deliver what customers value, and you have to create environment that will attract and retain the best workers.

    I do agree 100% with this part of your post:

    Yes, you must first decide to be customer-focused. The decision becomes your goal. The decision does not guarantee your outcome. And to achieve this outcome, you must create a process, which is put into place by the leadership of the organization. And while part of the process is about having the right systems and procedures in place, you still need people to act upon it. The right people must be hired, trained and empowered to support the vision of what the customer experience should be. And this vision, or outcome, will never happen unless the employees support it.

    Just as deciding to be customer-centric doesn’t guarantee success, neither does deciding to be “employee-centric.” Employee engagement contributes to customer-centric success. But it’s also true that customer-centricy contributes to employee engagement — people like working at a place that’s doing the right thing for customers.

    For more on how customer-centricity drives employee engagement, and vice versa, read:

  9. Bob – Thanks for all of the feedback and comments. Loved going back and forth and “debating” over the employee and customer focus concept. Bottom line is:

    With out the product that people want, value and are willing to pay for, doesn’t matter how nice you treat your customers are employees. Eventually you go out of business. But the combination of all is a winner – the sum being greater than the parts. 1 + 1 = more than 2!

    Thank you again!

  10. Who is come first?

    Based on your discussion let me add some point, for example if you open a new restaurant/bar has to focus on your employee first. Which means “in order to cut meat we have to sharp the knife first”
    Unless….
    The employees must take proper customer service or service culture training in advance

    Regards,

  11. The due consideration is always important when to start any business and the employees are hired and trained to accord with the business policy; which is often to earn more revenue or more profit.

    So the first priority is the well-trained, skill-oriented, well-mannered and the learned employees to understand and to deal with the prospects.

  12. Yes, creating exceptional customer experiences requires that leaders focus on employees, customers, and shareholders … in that order. I would have commented earlier on this great dialog, but I was a little tied up with that surreal customer experience I wrote about last week.

    Shep and Bob hit on a number of the critical issues in this discussion. If you don't have a business that customers value, you're not going to succeed. True and important, however that is not the same as putting employee and customer experiences first!

    Everybody here knows that the service game is all about creating exceptional customer experiences. The customer experience is how your customers perceive interactions with your company.Those interactions, of course, are with your employees or some self serve option.

    Customer experience and brand go hand in hand. The cumulative effect of the stories being told about you externally, determine your brand. Those stories result from experiences with your employees.

    Are you with me?

    Obviously, in addition to focusing on employees, leaders need to know what customers value and then put employees in a position to deliver value for customers.

    If you want your customers to have exceptional experiences that are aligned with your brand, your employees first must have great experiences and internal service cooperation. Let's face it. What your customers believe about you and your organization can never be better or stronger than what your employees believe about you and your organization

    — Peter Psichogios

  13. Employees, customers, shareholders. Who to focus on? Herb Kelleher of Southwest felt to focus on the employees first, who make the customers happy. When customers are happy then they come back. That makes shareholders happy.

  14. ….the line of thinking in Hal Rosenbluth’s and Diane Peters’ book, “The Customer Comes Second”, and several other books I could cite. At the end of the day, this is still very much a ‘chicken and egg’ issue.

  15. Peter Drucker said: “The purpose of business is to create and keep a customer.”

    Businesses don’t exist solely for the benefit of employees. Sorry, they don’t pay the bills. But clearly you won’t go far if employees don’t support the mission.

    If companies haven’t forgotten why they exist (to create and keep a customer), then focusing on employees, products, experiences etc. are all valid ways to move forward.

    But as we’ve seen with companies like IBM, Sprint, US banks, Detroit carmakers and may other examples, sometimes companies are *not* aligned with customers. Simply “focusing on employees first” won’t fix performance issues in these cases.

    I think this entire “employees vs. customers first” debate is bogus. It’s a false choice, at least as a generality. Like deciding to walk, you need to step first with your right leg or your left. Does it matter much which one, unless the other one follows along?

    My belief is that the choice of which “leg” to focus on in taking the next step is situationally dependent. Companies with low morale in an otherwise decent business model can move ahead by paying more attention to employees next. Companies with “entitled employees” need to get back in touch with customers next, and then redirect employees to (customer) value-adding work.

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