Customers First Or Employees First?

I do not think there is any trade-off between the two- it is the engaged and motivated employees who are ultimately responsible for more and repeat customers. In reality however, the culture of an organization can put one over the other and neither is without its pitfalls. Should the organization focus exclusively on its employees losing focus on its customers the perils in the long run are too obvious; on the other hand, should the organization focus completely on its customers maybe even at the cost of its employees, the challenges appear with a little time lag, but they appear nevertheless and when they do, they are no less daunting than the other case.

Let me describe the culture largely prevalent when an organization tilt one side or the other. There would be some exaggerations since here the purpose is to highlight the points when an organizations tilts too much on one side.

I shall begin by describing culture in an organization which may tilt too much on the keeping the focus on its employees and shall then try to describe how it may lose focus on its customers altogether.

Only Employees:

Its proponents would typically value individuals and their emotions more than the tasks and goals. The end objective appears to be to keep employees happy and to create a harmonious environment at workplace. There is a tendency to create strong emotional bonds and then expecting that those bonds would help in getting the work done. This would lead to a lot of communication within the organization since there would be a larger value placed on camaraderie. There is a lot of positive feedback which is provided to everyone. In this kind of a culture there is likely to be lot of celebrations and get-togethers at the slightest instance. This leads to immense relationship building within the organization. There is a feeling of warm togetherness amongst the employees. Up to here there is no problem. If anything, everyone would love to be a part of such an organization.

The problem starts when this is taken to an extreme. Then, people are encouraged to talk about things they agree upon rather than talking about their differences openly. Conflicts, certainly the open ones, are avoided at all costs. People would shy away from disagreeing openly because it can create a dent in the relationships. Hence, problems that need to be solved remain under the carpet. The tendency to give positive feedback can be so overwhelming that authentic feedback meant for improvement of the individual can get so sugar-coated as to lose its impact and message altogether. The need to maintain the perfect harmony and cohesiveness can stall managers from insisting on raising the bar on performance from their teams and holding each other accountable for their deliverables since both of them could and usually would lead to reasonable degree of differences of opinion and acrimony cannot be ruled out in such situations. The tendency is to look only look at the positive side of all performances often in the face of glaring needs for improvements. Deadlines can get extended time and again for some reason or the other so that everyone is comfortable with the timelines. Meetings can stretch long hours or there could be multiple meetings until everyone is “on the same page” as consensus of all concerned would be of prime essence. Taking initiative on something which may make things tougher for others in the same or another team can get tacitly discouraged and hence over a period of time employees are unlikely to take initiatives which would have ramifications for others upstream or downstream unless of course everyone is absolutely comfortable with the same. Tough decisions are likely to get avoided or pushed upwards- nobody like to bell the cat- anything which could potentially be unpleasant to a section of employees as that can adversely impact the overall harmonious environment of the workplace.

The natural result of this kind of a culture is that the performance of the organization would suffer in the medium to long term. Therein lies the irony because while it all too good to be an employee in such a culture, nobody really wants to be associated with an organization which is ultimately not doing well in business. Every employee wants to be part of a success story as it were and there are very few who would be fine to be part of an organization which is consistently failing to meet its goals. The challenge with this kind of an employee –first organization culture can be that it might lose sight of why it exists at the first place. It can get so obsessed by its focus on employees that it forgets that ultimately the employees are there achieve the end of customers because in the absence of the latter the former have no justification to be there and would not be there.

Let me now turn to organizations which may be excessively focused on customers and tend to neglect the employee aspect. There would be exaggerations to make the point but directionally it would not be too far off.

Only Customers:

The culture with excessive focus on customers means that the organization is too obsessed with the end results at the cost of employees who are essential for the desirable end results on a sustainable basis.

In this kind of a culture extremely high performance standards are continually sought. There is a massive premium on doing things faster and better. Anyone unable to catch up with the speed is quick to be hauled up and more is demanded of them. There isn’t much occasion for a second or third chance and employees unable to meet the expectations (which themselves are very high) are quick to be replaced. Many employees feel overwhelmed by the continual pressure of demands on their time and deliverables. The bar is continually raised higher to exceed customer expectations on an ongoing basis. There could well be a tendency for micromanagement in such situations since nothing can be left to chance as far as customers are concerned. There could well be an assumption that those at the helm of affairs know and understand how to exceed customer expectations and hence there is a set way of doing things. More often than not, it leads to evaporation of innovations and flexibility on the part of employees at large. Managers often get viewed as task masters by their direct reports who feel that the former are only interested in getting the job done without any considerations for the their teams.

Ironically this pays off very well in the short run- high performance standards to continually meet and exceed customer expectations would surely endear the organization to its customers and is likely to be a darling of its customers. Since it is the customers at the end of the day which decide the financial performance of any organization, this culture would surely produce superlative results in the short or medium run. If such an organization pays its employees above the market median or if the skill sets required is not very specialized, such culture can thrive and do well for a longer period. In the absence of either or both, the chances are that the success of such organization would be short lived.

Having said that, there is merit in the above culture as well which should not be overlooked. As mentioned in the previous paragraph that the chances of this kind of an organization doing well in the short and/ or medium term is high, especially if it is paying its employees significantly above the market median. At the end of the day, every employee in any organization would like to be associated with it if the organization is doing well or better than others in the industry. Since these kind of organizations tend to do well at least for some period of time, it is able to attract and retain good talent at least for a while. Having a continuous supply of good talent certainly creates a virtuous cycle for the organization to perform better on a sustained basis.

Conclusion:

The obvious conclusion is for an organization to strike the right balance between customers and employees. One at the expense of the other is not a sustainable proposition in the long run. An organization cannot exist for employees, of employees and by employees if it has an eroding customer base due to sub-optimal performance and yet at the same time it cannot get so obsessed with exceeding customer expectations that it neglects the very employees who can help the organization do that. While tilting heavily towards the employees may bring in accolades in the short run and may help the organization win some recognition for being a wonderful place to work, in the long run if it continually fails to deliver on customer expectations it is unlikely to remain that way. Analogously, tilting heavily towards customers may bring in a lot of business and great financial results in the short or medium term, the long run is likely to get compromised if the organization cannot attract or retain the very talent needed to do so on a continual basis.