Put your employees first and your customers second

Used with permission of the author:
Author: Jay Shepherd
jay@shepherdlawgroup.com
CEO — Attorney
Shepherd Law Group
Boston, Massachusetts, USA
www.shepherdlawgroup.com 
20 November 2007

The following article originally appeared in "Gruntled Employees" at www.gruntledemployees.com on 3 June 2007.

Got an email a few weeks back from Siobhan Ford at the Harvard Business Review calling my attention to an article in their June issue. (Actually, her email ended up in my spam filter, because I forgot to turn off the "ignore all things Harvard" rule.) (Kidding.) She had found us through Frank Roche's excellent KnowHR blog (shout out, Frank), which has been a staple on our Blogroll (right) for quite some time.

Anyway, Siobhan pointed out this short piece by two professors from Manchester (UK) Business School, Gary Davies and Rosa Chun. Davies is a professor of corporate reputation (how cool a title is that?) and Chun is a professor of business ethics and social responsibility (slightly less cool, and harder to fit on a business card). Davies and Chun conducted field interviews with 4,700 customers and employees of 63 businesses. They learned that service companies were more likely to be growing if their employee satisfaction exceeded their customer satisfaction:

Our research shows two things: Employee and customer views strongly correlate, indicating that the former influences the latter; and year-on-year sales growth positively and significantly correlates with the size of the gaps between employee and customer views. The more the staff’s view outshines the customers’, the greater the sales growth, because, we believe, employee views tend to transfer to customers through the aptly termed process of emotional contagion.

"Emotional contagion," apparently, is the way that employees' good feelings rub off onto the customers. The professors also found that employee satisfaction was most influenced "by the perceived quality of both training and management and by how much autonomy workers have."

Bottom line for managers and HR: employee satisfaction can actually be used as a metric to provide a leading indicator for company growth. Maybe that will get the boardroom's attention.

The article, which is only slightly longer than this post, is available for free until June 27 [2007] here. Thanks to Siobhan for the tip, and sorry about the whole making-fun-of-Harvard's-blog-policy post. (Well, not really.)

Short summary
Employee satisfaction leads to customer satisfactions leads to boardroom satisfaction.

Keywords and relevant phrases
accountability, business growth ,corporate reputation, customer satisfaction, customer service, emotion, emotional contagion, employees, ethics, management, perception, productivity, recognition, responsibility, risk, social responsibility, strategy, training