Why You Need to Give Your Employees More Power


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Decentralized decision-making processes will help improve customer experience (Part 3 of 4)

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This post is the third installment of a series in which I aim to address some of the causes contributing to the miserable customer service that many of us have experienced as of late. (Check out parts one and two here). These discrepancies have the power to make or break a customers’ entire experience and hurt your bottom line. Needless to say, leaders across industries should be concerned.

Take a second to think about your last interaction with a salesperson or customer service representative. Were you completely satisfied? My guess is No.

Providing customers with seamless and pleasant interactions seems like an easy enough task. So why are so many companies struggling to meet the mark?

When faced with poor customer service, it is common practice to blame the individual employee. However, errors in leadership and structure are often the culprit and can set even the most determined employee back (you can learn more about this problem as a whole in the first post of this installment).

Last week I explored Problem #1: Improper Distribution of Employee information. I presented the importance of creating a solid foundation for your employees through optimized training and the cultivation of learning and growth within your company.

But this is only the first step.

A knowledgeable employee with no power is often times useless in improving a customer’s experience. Today I will be breaking down employee decision-making power: Why it matters for customer service, what happens when your employees don’t possess it, and how it can be improved.

Problem: Employees lack power

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Trusting other people’s’ judgment can be scary. But when you have a properly trained and fully-capable employee, having confidence in their decision-making ability is crucial. Otherwise, you will find yourself with an employee who knows what to do but isn’t able to do it. This is problematic because it discourages employees and takes up customers’ valuable time. Frankly, it makes no sense.

Remember, responsiveness is a hugely important part of customer service. In fact, Forrester found that 66% of customers believe that valuing their time is the number one thing a business can do to provide them with good customer service. Requiring employees to constantly seek manager approval significantly slows the entire transaction (which you should know by now is dangerous for your customer satisfaction rates!)

Simply put, micromanaging is any (myself included) employee’s nightmare! It cultivates a toxic company culture. It disempowers and discourages employees. Here’s a scary micromanagement statistic for you: A survey published in Harry E. Chambers’ book, My Way or the Highway: The Micromanagement Survival Guide, found that over 79% of respondents had or were currently experiencing micromanagement in their workplace. Not surprisingly, this resulted in 69% considering changing jobs. Another survey, conducted by Willis Towers Watson, concludes that “Over 70% of “high-retention-risk” employees want to leave because they see no future advancement in the current job”.

You have spent precious time and resources into training and educating your employees. Now it’s time to step back and give them the space to prove their abilities.

Solution: Decentralize your structure

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For those of you unfamiliar with the concept of a decentralized structure, here it is: Decentralizing your company’s structure means that lower-level managers and employees are empowered with the ability to make decisions without the approval of their superiors, as well as give input on the organizational processes that affect them and their interactions. Compare this to centralized structures (which tends to be the norm) where only a few, high-level figures carry all the decision making power. A democracy vs an oligarchy, if you will.

I’ll admit, the idea of decentralization can seem a bit scary or extreme to some. But, when done right, it can offer some real benefits to companies. Here are a few that stand out:

  • It boosts employee confidence and morale. You are telling your employees they are capable and that you trust them. Decentralization can turn a capable employee into a superstar.
  • It increases responsiveness. Your customers don’t want to wait for your employee to go consult with a manager before completing a transaction.
  • Decentralization will cut their waiting time in half, and that means happy customers.
  • It encourages innovation and creative solutions. Giving your employees a voice will open the doors to new ideas and perspectives you may have not considered. These are especially valuable coming from employees who interact with customers regularly.

Obviously, decentralization is only an option with well-trained and motivated employees. It also looks different depending on the size and type of business you are running.

Southwest Airlines is a great example of decentralization at a corporate level. Employees at all levels are encouraged to express their opinions on a large number of organizational issues. The result? “Southwest is the only domestic airline with 45 consecutive years of profitability. They have been #1 in the DOT Consumer Satisfaction Ranking for 22 of the last 26 years.” They also ranked #2 on the list of Top-Rated Workplaces in 2018 by Indeed. (Southwest Media) Pretty solid case for decentralization, if you ask me.

In a small, brick-and-mortar type business, decentralization may look like giving employees the power to issue refunds or exchanges without manager approval. Picture this: You are in a restaurant. Your server accidentally tacks on an additional item to your bill that you did not order. You both know the only solution is for this to be taken off your bill (and maybe even a complimentary desert be given). Problem is, only the manager has the ability to void items on a bill and they are currently taking an important phone call. Much to you and your servers’ dismay, your only option now is to wait. No matter how tasty your meal was, you will probably think twice before ever visiting this restaurant again. If only the server had the power to void the extra item, this whole situation could have been avoided.

My point is that decentralization is not a one-size-fits-all. It is important for any company that is considering moving towards a decentralized structure to look at their business model and critically evaluate the potential effects of making this move. And I’ll be honest, decentralization may not be the solution for your company. It all depends. But I seriously recommend you at least consider it.

This Harvard Business Review article is helpful for understanding when decentralization does and doesn’t work. And for more information on decentralization in general, check out this article

Now that the structural issues of information distribution and decision-making power are behind up, my final piece will focus on what some may argue is the toughest customer service problem to combat: Employee Apathy (in other words, when your employees cannot be bothered.) Stay tuned!

Alexander Shum
Alexander Shum is CardPay’s Head of Global Business Development and the Managing Director of its North American operations. With over a decade of international experiencein financial business development, he is an expert on all things Fintech. Never one to blindly follow, Alexander takes pride in always questioning why things are the way they are, and finding ways for things to be improved.


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