Employees and Customers Aren’t First
One of two business philosophies dominate organizations today, “customers first” or “employees first.” Both are useful.
Neither reflect reality.
Employees first:
Vineet Nayar, CEO of HCL Technologies, Ltd., is committed to employees first. Harvard Business Review published his book, “Employees First, Customers Second.”
The employees first movement even reaches into health care. Spiegelman and Berrett wrote, “Patients Come Second.”
Customers first:
Stew Leonard’s best expresses the customer first philosophy. They have two rules.
Rule number one: The customer is always right.
Rule number two: When the customer is wrong, refer to rule number one.
Reality:
In reality, “employees first” or “customers first,” both work. But, they aren’t the real “first” in any organization.
Both camps justify their position by showing how successful their organizations are by adopting their preferred approach. “Look how much money we made putting customers first,” for example.
Organizations come first. The real question is, “What’s good for the organization.”
The real issue is how you express organizational self-interest. Do you believe it’s best for your organization to put employees first or customers first?
A sign in the front window saying, “We put ourselves first,” just doesn’t sell.
Absolute:
None of the philosophies are absolutes. Leaders navigate competing interests between employees, customers, stakeholders, communities, stockholders, and organizations.
I’m not suggesting we abandon values and ethics. But, lets get real. When push comes to shove, organizational self-interest drives organizations – within the confines of law, regulation, values, and ethics.
Successful organizations do what’s good for others
in ways that are good for themselves.
The conversation feels like a dog chasing it’s tail. Customers or employees or organizations? Yes, yes, and yes.
For the record: I’m an employees first guy.
Are you a “customer first” or “employee first” leader?
What guiding principles help leaders navigate the competing interests of their constituents?
Dan, As you know…. this is discussion is central to the work I do. For the record, I’m an employee’s first gal.
http://letsgrowleaders.com/2013/04/29/customers_or_employees/
Thanks Karin. As an employees first guy, I’m glad to see that you’re an employees first gal!! 🙂
Thanks for the link. I really enjoyed the article.
This made think of my home. As a mom, I strive to put my employees (husband and children) first for the betterment of our organization. Then there are times I put the home (business) first to ensure my employees are well taken care of. You made it clear somethings sound good but reality is where truth is exposed! Success is balance!
Thanks Changed. I have to confess that I don’t like the term “balance” it just feels wishy washy. But, ….. 🙂
Hahahaha!!!! Love it!
KaRee
Great post Dan you been on a roll.
Anything that brings awareness to THE BIG PROBLEM……things are not right in the workplace on America…..is cool with me.
80% of folks disengaged at work. You do know Dan the response to that fact reveals if a person is really a Leader of just a bloviating windbag.
No Leader is cool with a 80% rate of absolute failure. Just idiots and dummies who don’t think it applies to them. These results are OURS, not theirs! Part of the idiot mindset not to see they are part of the whole.
Good topic hope it stirs more out of the slumber. As Leaders we are stinking up the place and why not now being the good time to say, yeah I may know cool sounding stuff in my head, but it ain’t really helping anyone. 80% number is not lying.
The opportunity is great, time for REAL LEADERS to step up and start making things better.
Starts of course with Why.
SP
Effectiveness Activator
Thanks Scott. Lets go make things better! 🙂
I see you are everyday.
I am working on expanding my megaphone.
The folks really need Leaders. What they got right now ain’t cutting it.
80% failure rate. It is disgusting the service we are giving others and it makes me want to hurl!!
Actually makes me want go help and goodness the opportunity is staggering.
Party On Dan,
SP
This reflects one of the old says “taking care of ourselves before taking care of others.”
Thanks for sharing.
Thanks Yan. Yes…it feels like circular reasoning. But, what’s the alternative.
Dear Dan,
A debatable post!
Employees and Customers are two sides of one coin and both sides have their importance.
However, the top management sees the coin from a different angle. It may concentrate on a hard currency note rather than the coin if newer earning opportunities are seen at the cost of employees or customers welfare. In an expansion phase, the emotional or rightful things are just overlooked. It’s a reality!
From ethical and ideology angle, internal customers [employees] need to be taken care first who in turn will effectively manage external customers [users’ group]. Moreover, there is a difference between short-term and long-term vision of the top management. In short-term vision, many quality aspects are ignored. This is a universal phenomenon.
Thanks Dr. Asher. Yes, debatable for sure!
Thanks for adding some added angles to the conversation.
The short and long-term perspective is another very important aspect to choosing priorities. It takes courage to shoot for the long-term perspective.
I’ve heard it suggested that a medium term perspective is most useful.
I work for a company that focuses more on processes than on people. They have laid off employees, but they also have fired customers. If the organization were a person, it would be a perfectionist.
Perfecting processes is the priority. So far, it has worked well. In the b2b arena, we would be considered a luxury brand. Many of our customers are giant rich lazy companies, and they love us. The leaders know that by paying more, they get their stuff “right the first time.”
The customer is often taken aback when we are unwilling to break a dozen processes to accommodate them. We tell them when they are asking for the wrong thing, which surprises them, since many are used to being coddled by their vendors.
I love working there. As an employee, I am proud to be working for “the best.” It actually drives engagement, because it attracts people who are interested in getting things done right.
A few of the customers we “fired” have come back sheepishly and agreed to play fair with us. They value what we do and are usually very successful if they play by our rules. They found that our competitors may offer them lower rates, but they also provide inferior products and services.
We have lost a lot of good employees. Perfection can demand long stretches of late nights to get things right. It tends to burn people out after a while. But some of the very best have come back because they were missing the culture of perfection.
Thanks Dunk. What a pleasure to read your perspective on this conversation. To some degree, it may not matter which priority we choose as long as we choose one. Customers, employees, or even processes…
At first it seems like processes isn’t a very good priority…I appreciate your take on it. Cheers
I admit, we had our doubts in 2008-2009. Luxury brands don’t fare well in a recession…but we stuck to our core values, let the price conscious customers experience imperfection, and they all came back to us in 2010.
Dear Dan,
When I was reading the philosophies of whether customer first or employee first, first thing came to my mind is ” Organization first” and later my confidence enhanced when I saw the sentences “organization first”. In fact, the logic is strong here. Whether it is customer or employees both are part of the organization. Both are worthless if organization does not meet its goal.It means organizational goal is the most important part and to meet it, it is important to prioritize stakeholders based on its relevance. I do agree with you that such philosophies work based on nature of role, responsibilities and goal in hand.
Being in academics, many people like management feel and discuss that students are our customers. But I do not digest this easily. Unless customer get values in organization or see their dream, they may not join. They come since they expect organization to fulfill their dreams. Similarly, organization is concerned about creating its own platform so that customer will find right reason to come. So, in this sense, organization comes first.
At the same time I strongly believe that organization is made out of people. There are different categories of people in shaping and creating organization. Initially, founders, stakeholders and investors create by their philosophies. Later on it is shaped by executives who run the organization from time to time. But the reality is that values carried by executive play major role in creating philosophies and practices. Practices play even greater role in shaping organizations.
Thanks Ajay. I woke up this morning thinking how hypocritical we are to act like “customer first” or “employee first” are the ultimate idea.
The more I thought about it the more it seems there is an interplay of competing forces. I chose the term competing intentionally.
I work for a company that sees everyone as our customer, this includes employees, vendors and those who pay for our services. The approach has helped us focus on all people we come in contact with on a day to day basis and establishes a culture that everyone deserves respect.
Thanks Calvin. That’s definitely one way to address this issue. It makes it easy to say “customer first” when everyone is a customer. People first. 🙂
There are tensions between stakeholder requirements that require us to pay attention to each, without categorizing who is first, just as a parent must pay attention to the needs of each of his/her children one at a time without playing favorites.
In the big picture of the universe, God must come first, family second, taking care of our health 3rd, and all else must follow. That means organizations should be lower in our priority than our relationship with God and family. Our health is vital, for we need it to make everything else work, and because our bodies are not ours to destroy. They are a gift from the Creator, as is every moment of time we live.
Within the context of organizations, the essential thing is that the organization’s mission must come first, for it is the only reason the organization exists. If we are members of the organization, we are its stewards, no matter whether we lead it or follow. Whatever and whomever is ethical and proper that best furthers the organization’s mission is the right thing to put first at any given time. That may be customers, employees, suppliers, partners, the public.
Leaders and followers need to get the God-family-health-stewardship of resources priority sequence firmly in their minds. Note that in the stewardship context, the person seeks to better outcomes for the organization with which he/she has been entrusted, and NOT to better his/her position or power unless it is truly the best thing for the organization.
Judging between competing priorities is therefore not a dogma of “putting customers first” or “putting employees first”, but a developed skill. All of the organization’s stakeholders need to understand that the organization’s members won’t pander to any given stakeholder, but will seek the organization’s good. That will allow the organization to better further its mission, giving it competitive advantage that in the long run will better the outcomes for all of its stakeholders. Just as a family is strong when parents care for all children equally, and all children participate in obedience and doing chores, so the organization’s mission is strengthened by wise allocation of time and resources to supporting the right things.
Marc, I think you have it right. Put God first. He says “Love your neighbor as yourself” which is true of organizations too. I think of this in terms of my church where I pastor, the family I father/husband, and the school in which I teach. What does love say in this particular context: how would I like to be treated if I was the employee? how would I like to be treated if I was the customer (or child, congregant, student in my classroom)?
Thanks Marc. What I see you saying is, after God/family/self, it’s mission first. I like the clarity of that as apposed to organization first.
God, family, health, stewardship, now that’s a solid respectable concept Marc. Thanks for sharing. Steve
Fabulous post, Dan. Brilliant even. It sure has freaked me out. Close to the “chicken and egg” what came first debate. And I agree with you about staff members first…with a hair-line proviso.
The GOAL of the organization can simultaneously include wellness of both staff members and customers, and need not be mutually exclusive. I believe successes are made from desire: Something they have deep inside them, a dream, a vision. Yes, they need skill. At the same time, leaders must be cognizant their “will to serve” must be stronger than their skill.
It is almost as if to obtain whatever we conceive and believe, we must work in the realm of the real–and live in that of the ideal. When leaders care, teach and serve in this way, both staff members and customers are served seamlessly, I believe.
Thanks Rick. You bring yet another angle to the conversation – an organizational mission that includes the well-being of it’s staff and customers. Makes total sense to me. As the organization works to take care of its constituents, it takes care of itself.
Hi Dan, long time no see. I always read your posts and this one is intriguing because of its simplicity. In my mind nothing can ever be achieved unless the giver grants with joy. All other forms of giving solve the immediate problem but never claim the perpetuity of the forever loyal recipient. Customers are not only buying what you sell, they are getting all that you are. The product will never bring them back as often as how you made them feel. This is a long winded way of saying that our most valuable and neglected resource is the human capital that greets the customer. Take care of your staff and they will take care of the organization. It is as simple as that. I also love the quote above of “Happy people make people happy.” And I will most definitely be ordering tee shirts and other paraphernalia with that logo. My hats off to the creator for I am a happy customer! 🙂
Thanks Al. Great seeing you. I often think of you and the organization you lead.
I’m with you. Love the quote, “happy people make people happy”
Now, it would make me happy if you didn’t stay away so long. 🙂
Agreed and now where is my other mentor Dr. Campbell?
People first. Why partition the concept?
Thanks Steven. I thought it was useful, even engaging to explore which types of people…. 🙂 — (written playfully)
Critical as employees are to service delivery, the organizations that I’ve seen put employees first have badly failed their mission. I’ve seen hours set that were what the staff wanted, for example, that were completely inconvenient for their clients.
Putting customers first leads to a focus on existing customers – not good if that’s not the path to growth, or if the community has changed and that leaves out a big part of the community.
Since I work with community benefit organizations like charities, I’m a “community first” person. Sometimes what’s best is to wind down the organization and free up donations and volunteers for a more effective, relevant one. But most of the time, organization first works very well and much better than employees or customers first.
Dan,
Great post. I, too, am an employee first guy, and recognize that the world is not black and white, but shades of grey and we have to look at the gestalt of a situation to get it right. Being too tied to a methodology or mindset limits us a consultants and coaches from giving the best to our clients.
A couple of years ago I wrote a blog article espousing my belief in this area around the value of having more of an employee first approach in business and even created a visual representation I share in my workshops that makes this point very powerfully, some here may find useful so I share it for that purpose:
The Power of “Internal Customer Service”
Skip
Your blog on “employee’s first” was impressive, Skip, as was the interview with Barrett, Southwest Airline’s President. Thanks for the invite. You and Dan certainly do proffer valuable reason why staff members must be first.
I’m a customers first gal. But I understand your point about organization first. I think whatever our company’s values are, they should apply to all stakeholders; employees, customers, bosses, etc.
When my daughter was little, a friend was visiting and when she left, we hugged and said “I love you.” to each other. My daughter began to cry, sob actually, and when I asked her what was wrong she said, “I thought you loved me!” I reassured her of my love for her and told her that the human heart is big enough to love a lot of people without diminishing our love for any one person.
If we value satisfaction for example, can it not be applied to every stakeholder?
Diana
Thanks Dan for this thought-provoking post. I work in education but the principles still apply.
There’s a fine line between the two. In order to fulfill salaries, we must obtain payment. Payment is acquired by the consumer. We must make the consumer happy in order to attain the goal of receiving money to compensate. I am old school in the fact that the consumer comes first. Educated staff is a large portion of compensation with accomishment when they “feel” when making a customer pleased. This must be followed up with timeliness. Their reward is making someone’s day, enjoying what they do, receiving a thank you from management followed by their salary to show they’ve done a great job.
Employees first, then customer which enables us to serve our communities. If you believe with all your heart in the development of people and watching them stretch and grow, this is the path. If you choose to put employees first only to achieve end results you will fail in the long run, it violates the true nature of the Universal Law of giving with no expectation of anything in return.
The employees first philosophy assumes that the employee is motivated,is competent and has the initiative to creatively solve a problem for the organization and for the customer. It takes strong leadership to ensure that the employee is capable of serving the interests of the organization and the customer.
Hi Dan,
Do we really need to put any stakeholder first?
To put someone first, is to put someone second, third etc. And where do we get the demoralizing, paralyzing notion that we’re “not good enough”? I suggest it comes from this kind of comparative ordering. Competition can be a great motivator; for the one who “wins” out. Sometimes it is even for the one who “loses” out. But many of us feel anything but motivated when this happens. What if we released the notion of competing to win with others and just competed with ourselves? What if we were only concerned about how much value we were adding to the life of the person in front of us – whether that person is a colleague, a boss, or a customer?
How would that make a difference?
• The need to rank would be gone! That means no more “losers”. It means stretching yourselves to do better at no cost to others.
• Wasted energy (blame) from not winning is redirected into thinking about value add (business speak for adding to a person’s sense of well-being. Do we dare say we made them happier?)
• Competitive walls of secrecy between people make way for rivers of collaboration.
• The notion of “not good enough” would morph into “we can…”.
The direction that HCL executives took was a courageous one and it spoke to the need of the employees to not only feel valued by their company, they also need to know the value of their own contribution to the company. I was fortunate to learn about that transition in more detail in an interview with Anand Pillai, then Sr. Vice President and Global Head — Talent Transformation. He shared so much with us that I invited him back for a Part 2 interview! (www.ImprovingCustomerExperience.com – episodes 62 and 63)
They got people thinking, just like you do, Dan. And that’s aaaalllllll good!
Hi Dan,
I love reading your blog and use your suggestions everyday to help my constant uphill battle in leadership. I was wondering if you have any info or helpful techniques for shift managers? I manage a group of 20 but they are not always consistently mine. We work for a 24hr hotel and have 3 shift managers. How can I be effective and respected without being compared to another shift manager’s style? Thanks for all you do!!!
Thanks Alicia. I’m posting your excellent question on the Leadership Freak Facebook page. http://on.fb.me/ZFY8ud
Alicia, people will always compare. I do, you do, we all do. We each display the principals life has taught us. We simply have to remain true to our values and beliefs. When remain committed to what is worthy and rite we can’t go wrong. Thanks for sharing – Steve
Good afternoon Dan , Personally I have to choose employees 1st but only by a nose. The Holy Bible commands us to love thy neighbor as you love thyself. As a leader I’ve always considered those who work for me to be the first customers that must be satisfied. A disgruntled, disengaged workforce will never produce at a level that satisfies todays demanding customers and subsequently their organizations shareholders. A leader needs a mindset much similar to that of a father. Irregardless of the situation a father will always put the concerns of his children before his own. A father raises his children to be confident, self motivated, yet humble and receptive to authorities position and direction. However focusing only on your people can leave the leader out of touch and out of balance with customer expectation and demand. When you put your people first, you build an atmosphere that inspires creative thinking, an action oriented workforce and a network of reliable people who share a commitment to produce customer loyalty.
Steve
Mature leaders/people know how to love others as they love themselves.. So, whether customer or employee.. We could freely give as we freely receive. 🙂
What a great quote, “Successful organizations do what’s good for others in ways that are good for themselves.” I am glad to see a realistic approach to the customer first mentality. Putting the customer first can put you out of business first if there is not a balance.
In my opinion, leadership is not an “either or” proposition – it is a matter of “and.” Your priorities are your customers and your organization and your employees..
So true Phil. I think of my self as a people 1`st person. ALL people, employee’s, customers, shareholders, etc, etc. All certainly are equally important. To leave any out of the equation results in disatatisfaction in some form.
Thanks Steve
Hi Dan,
I didn’t think about it until now even though I have displayed many of the principles characterizing both approaches. Thinking about it now and coming to the conclusion that I fully agree with the organization first consciousness. I am calling it consciousness simply coz success requires conscious / rational thinking and actions geared towards organizational benefit.
Taking this thought a step further and what is altruism and is there really a selfless approach to interaction among human beings or is it all about doing good on to others in ways that are good for ourselves.
I’m not sure I would say I am an “employee first” person. Saying it that way insinuates you would sacrifice customers for the sake of an employee, while the other side suggests it the other way. Neither is really correct.
I am a big believer that if you hire the right people, equip them to excel, make your values clear, and empower them to make customers happy, then everyone wins. It places focus on customers through employees. So I guess my approach is people first.
I used to work at HCL Tech and I truly enjoyed the ‘Employees First’ feeling. They are truly committed to empower and enable the employee in every possible way. And because the organization is involved in a wide variety of industries and houses over 92,000 employees, the opportunities are endless for those with an open mind. Of course the pressure to perform is always there and ultimately it benefits the customer when the internal environment is healthy and competitive.
I’m so thankful you stopped in Eeshan!
You’re welcome. It was a nice post Dan! 🙂
Is it either or? Can there be balance? Or does it come down to the owner so that the organization reflects him/her? For me, when an organization is well run, it means I feel good about placing my trust in the product etc. I feel important and not used. If it was either or, I’m a more a customer type guy – unless I’m working as an employee.