Steve Ballmer should have been fired as CEO of Microsoft many years ago. As a recent article in USA Today points out, Mr. Ballmer managed with fear. Any CEO that tosses chairs across the room when he gets angry is not going to get the best from his or her employees. Managing with fear stifles innovation, creativity, risk taking and thinking outside the box; which are all necessary if you expect to hold your own with a competitor like Google. What Mr. Ballmer fails to realize is the reason Google is starting to eat Microsoft for lunch is that the culture at Google does not allow fear. Instead, it encourages employees to come up with and run with new ideas. This is no longer the case with Microsoft.
An article titled: “Memo to Employees: The Boss Is Watching,” appeared in today’s Wall Street Journal. The article discussed the issue of electronically tracking employees behavior at work. This article takes the approach that employee ranks are filled with “trouble makers” who are lazy, dishonest, untrustworthy, prone to “goofing off” and need to be kept on a “tight leash.” There is, however, another way of looking at this situation. In reality, the things mentioned are actually symptoms of poor leadership, a culture that fails to engage employees and sloppy hiring practices. If business owners and managers would install a culture that engaged its employees, hired only those people who are going find meaning in the kind of work being done at their particular company and supported their employees rather than trying to control them, there would be no need to look over their shoulders with tracking technology. Instead, their employees would come to work every day excited about giving every bit of energy, creativity and passion to performing their jobs. This would dramatically increase the levels of productivity, customer service, employee loyalty and profitability. One of the lessons I have learned during my 30-plus years as a business consultant is that you can’t achieve excellence through control, but you can create an environment where employees give it to you voluntarily. To see this in action, check out the likes of Google, JetBlue, W. L. Gore & Associates and Zappos.
J.D. Power & Associates uses a 1,000 point scale to assess customer satisfaction in the airline industry. According to a recent article by Katia Hetter which was recently posted on cnn.com, “Passengers who are greeted by airline staff with a smile, even infrequently, report satisfaction scores that are 105 points higher than among those who never get a smile. Passengers who report airline staff smiling at them consistently report satisfaction scores that are 211 points higher than those who do not get any airline smiles.” As you can see, the smile is a very powerful business tool and has a major impact on a companies bottom line. It’s a tragedy that more companies don’t understand this.
According to an article by Katia Hetter, posted on CNN.com, JetBlue Airways ranked first for satisfaction among all North American airlines for the ninth consecutive year. “JetBlue also earned the top score among low-cost carriers for the eighth year in a row. Southwest Airlines was a close second among discount carriers with 770 points to JetBlue’s 787. Airlines are ranked on a 1,000-point scale.” The article went on to say, “Of course it helps to have happy (engaged) employees.” Jessica McGregor who is the senior manager of J.D. Power’s global travel and hospitality practice, was quoted in the article as saying, “One of things we see is that when you see companies that have high internal employee satisfaction (employee engagement), they have high customer satisfaction as well.”
Note: The parenthetical comments in the above post are mine.
There’s an excellent article in by Steve Strauss today’s USA Today.com on how having highly engaged employees can make a huge difference on the bottom line. The article cited research which said: “employees who are highly engaged in the workplace are about 50% more likely to exceed expectations. Also, noted in the study is that companies with highly engaged people outperform firms by 54% in employee retention, by 89% in customer satisfaction, and by fourfold in revenue growth.” This research confirms what we already know about employee engagement. If you would like to read the entire article, here’s the link: http://www.usatoday.com/story/money/columnist/strauss/2013/04/29/steve-strauss-good-boss/2115469/
When employees are engaged with their work, good things happen. I haven’t read of heard of one negative thing that’s happened as a result of employees giving all their energy, creativity and passion to performing their jobs. Rather, engaged employees create a competitive edge for their company that can’t be easily copied—they’re constantly making innovative improvements to products, services and customer experiences while providing superior levels of customer service which results in loyal customers. This means higher levels of repeat and referral business which, in turn, translates into significant increases in market share. In addition, companies with high levels of employee engagement enjoy substantial cost savings due to reduced employee turnover, absenteeism, accidents and employee theft. Clearly, having a workforce of employees that are engaged is a very good thing. if you want to know how to make employee engagement happen in your organization, just go to www.rossreck.com.
Marissa Mayer was hired as the CEO of Yahoo last July to turn the company’s fortunes around. An article in today’s Wall Street Journal points out that Yahoo’s revenue is down and that a turnaround has yet to take hold. What the article doesn’t seem to appreciate is the fact that Ms. Mayer knows what she’s doing and that a turnaround will happen and it will be a solid one. According to that same article: “Ms. Mayer said that it would ‘take several years’ to reach the growth rate she would like, and that her first priority was to make Yahoo ‘a really terrific place to work’ and hire the right people before stepping up the “cadence of product development.” This shows that Ms. Mayer has he priorities in the right order. First, you get the culture right which consists of making Yahoo “a really terrific place to work.” Second, you hire only those people who will thrive in that culture. And finally you turn those people loose and support them while they apply their best efforts to make the company successful. This process takes time, but it’s a “can’t miss” formula and it’s the same formula which is presented in my new book, The Engagement Formula which you can find on http://rossreck.com/.
Attempting to improve a company’s financial results by cutting staff usually makes the situation worse for a number of reasons. First of all, cutting staff does not get at the root cause as to why the company is experiencing poor financial results. This is what needs to be dealt with if a company expects to turn things around. Second, cutting staff deals a serious blow to company morale which causes huge reductions in productivity, innovation and customer service. This, in turn, results in lower sales which makes the financial problem even worse. A good example of this is the J. C. Penney situation that is going on right now: http://online.wsj.com/article/SB10001424127887324345804578423081955213990.html
According to an article in today’s USA Today, customer complaints are up and profits are down at McDonald’s. Customers are complaining about rude employees and slow or “chaotic” service and the problem is getting worse. As a slide from a webcast delivered by Steve Levigne, vice president of business research for McDonald’s USA, “Service is broken.” So what is McDonald’s doing to fix the situation? According to a franchisee quoted in the article, “The new leadership has decided to focus on customer satisfaction as a real driver for us to build the brand and build sales.” The truth is McDonald’s needs to focus on its employees–they’re not engaged with their work. Right now McDonald’s pays its employees as little as possible, doesn’t train them well or treat them well and hence the rate of annual turnover of its employees is high (the fast food industry average is 60%). No company can expect to deliver high quality service with a smile under these circumstances. McDonald’s would do well to take a look at how Quik Trip, a company in a similar industry, treats its employees and it could solve it’s engagement problem in very short order.
I absolutely love shopping at Trader Joe’s. The Quality of the groceries is excellent as are the prices. But, the most important reason that I shop at Trader Joe’s is the people who work there– they’re genuinely nice. As you walk around the store, they great you as if they really care about you. It doesn’t take too many visits before they know your name. If you ask them a question, they’ll go to great pains to get you an answer and if you ask them where a certain item is located, they will take you to it rather than say, “If we have it, it’s in aisle three.” In short, these employees love what they’re doing and it shows in the way they do it. This, in turn, is what brings people like me back to their store on an almost daily basis. It’s a great recipe for success.