How Much Are Your Employees Spending With You?

Some of you may be familiar with the leadership theory that views employees as customers and their manager as the store keeper.

The theory makes a parallel between running a customer focused business and leading a team in a similar way to build exceptional discretionary effort, loyalty and other benefits.

We are all customers of some business or somebody.

Most of us will have experienced a highly personalised level of customer service at some stage in consuming a service or product. How did it make you feel?

Valued? Important? Cared for? Respected?

What impact did that have on your consumer decisions from that point on?

It’s very likely that the service and customer experience that you received was carefully designed, supported and resourced to deliberately build the relationship between you and the business you were dealing with. This is relationship marketing based on establishing and maintaining a relationship of mutual exchange with customers. Relationship marketing is an extension of the focus on customers first and designing products to suit them, rather than traditional inward product/service focus approaches. Customer focus and relationship marketing approaches not only give organisations the capacity to gain valuable information to satisfy customers in the short term, they also build a relationship of mutual exchange that fosters long term loyalty and continued opportunity to recognise changing customer needs before competitors and create more value. In this way the value proposition you offer relative to your competitors is greater than just the product or service itself – the relationship that has been built is now included and that brings a value of its own. Organisations as diverse as luxury goods, coffee retail and engineering construction contractors have gained serious competitive advantage from customer focus.

So what lessons from customer relationship focused organisations can be applied to the relationship between your organisation and employees?

When looking at great cultures within organisations that are invariably successful, how do you imagine their employees feel?

Valued? Important? Cared for? Respected?

The inspiration for this blog has its genesis many years ago. I read a book with the intriguing title “The Customer comes Second.” The author, Hal Rosenbluth, was born into the Rosenbluth family who had set up a Philadelphia travel agency. Hal steered the business from a small family operation to become the second largest travel company in the world before selling to American Express in 2003.

This blog about why a “customer focus” with your employees is worth consideration.

Lets look at where the similarities are.

Employees, as customers, buy from a business – and particularly their leader. They can choose to buy the values, feeling of engagement through being listened too and included in workplace decisions, employee development, benefits and intrinsic satisfaction and belonging that comes with working for that leader. Lets call them the people value. Employees trade their skills and time for this and make conscious decisions about the employee value proposition with your organisation relative to others.

If that leader delivers on all of the people value the employee (customer) is expecting, the more likely they are to give more (spend more) because they feel valued and respected. Research shows that employees will give more time, effort and energy to that leader beyond the minimum required to maintain their role. We refer to this as discretionary effort. Employees are also more likely to stay with the organisation when the people value that was promised is delivered.

When a leader delivers less of what was expected the employee starts to examine the value they are receiving more closely and look to see if the deal is a fair one.

They then question whether the purchase in exchange for effort and energy is really worth it?

If people find that the trade value starts to fall below their expectations, they withdraw their discretionary effort (which is their currency) perhaps slowly at first until the value equation reaches a threshold point. This threshold point is commonly called “working to rule” or “presenteeism”. At this stage the employee stops buying from the leader altogether and exerts no more effort or energy other than what is required to keep their job. This might manifest itself by the employee no longer offering opinions or input into business forums, not delivering a high quality of work and shunning attempts to be part of a team or process.

During this time the business performance and culture slide during the employees lack of engagement. Eventually, if the employee is dissatisfied enough with the trade value, they will shop around for a better deal and potentially leave.

So, where does the salary package they are paid fit into all of this you ask?

As we have seen from a plethora of studies, money as a motivator has a moderately short term ability to influence performance and rates below relationship with manager, purpose, communication and opportunity for development. It is also low down on the list of reasons why people leave businesses. So money is only a minor segment of the overall employee value proposition.

Ask yourself:

– “Am I delivering the best customer service to my employees?”

– Am I meeting expectations on the employee value proposition that I committed to?”

– “Am I employee focused?

If the answer is no, think of ways that you can meet or even exceed expectations watch the turn around in discretionary effort and intention to stay. You may find that many of the practical things that you can do to meet employee expectations are low or even no cost.

At STS, we consistently support major organisational change to shift outcomes on safety, production and cost. A key factor in all successful changes for clients over many years has been the role of individual and groups of leaders and their behaviors. When these behaviors shift the impact on the organisation is exponential, as is the impact on individual employees and their view of the value proposition with their company.

All businesses have internal and external customers. All departments have customers, usually internal. If as a leader you can not satisfy your immediate customers, how will the department and business succeed in the long term?


Post written by Andy Rooke, Project Manager at STS Consulting Australia