For better customer relationships, concentrate first on employees

New book by global IT services giant HCL Technologies suggests the best path to better customer loyalty is to concentrate on motivating employees on the front line of customer relations.

The first priority of every company should be serving customers, right? Wrong, according to a new book from IT services firm CEO Vineet Nayar, called "Employees First, Customers Second: Turning Conventional Management Upside Down."

This is the management philosophy that HCL uses to run its business, a philosophy it embraced back in 2005. Why should you listen? For one thing, HCL actually grew during the 2008 to 2009 recession, recording revenue expansion of 23.5 percent last year alone.

The issue for Nayar is that managers don't spend enough time concentrating on empowering and "enthusing" the employees that have the most contact with customers. Here's his observation from a press release about the book:

"Perhaps the biggest surprise for readers of my book will be that Western-style companies can achieve even greater success by making their approach to business more democratic. Companies with traditional top-down, pyramid-like hierarchies with rigid reporting structures make it very difficult for critical competitive information, garnered on the front lines, to flow uphill to the C-suite, where strategic business decisions have traditionally been made.

This is not to suggest that you should coddle your employees. This is a strategy focused on accountability and results. Those results are transparent to everyone. One example given in the book focuses on the company's 360-degree performance reviews. If you are asked to provide feedback, you are given the results of that entire review. That applies all the way up to the chief executive himself. The way in which this happens is described in this book excerpt on the BusinessWeek Web site.

HCL believes that this sort of transparency -- the transparency you see in social networking communities -- will be particularly instrumental in motivating the workforce of tomorrow, Generation Y.

The services firm commissioned a survey among private sector employees to help share the ideas put forth in its CEO's book. One finding was that 59 percent of the individuals surveyed said that they often see problems that have eluded the notice of their managers.

Close to 90 percent said they would be eager to share their observations for improving the business with their managers -- if such behavior was encouraged and rewarded.

But, the problem is that employees today feel undervalued, according to the research. In fact, almost half the respondents said that employees are the least valued group with their company, after customers and top management. What's more, about 20 percent said that when the present supervisors with a problem, the person promises to address it but never does. Personally, I would expect this last number to be higher and I'm glad that it is not.

The data was gathered during May and June 2010 from approximately 700 employees working for private sector firms with at least 300 employees.

I'm not a manager anymore, but I used to be, and I do know that the biggest motivator for my team was transparency. They were willing to go above and beyond for the company when they understood the rationale. They had a much tougher time supporting arbitrary decisions, especially those that went against what they were experiencing through their interaction with our customers (in this case readers).

I would think that this approach would be particularly valid in any services business, from the hotel and airline industries to product customer service. How many times have you wished, for example, that the person on the phone was able to REALLY act on your particular problem instead of sticking to the script? Here's a novel concept: Maybe the people who enforce your customer service rules should actually have a hand in writing them?

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