During the worst financial crisis since the great depression in the 1930s, families were losing their homes, companies became extinct overnight and employees were losing their jobs by the droves. Amid all that uncertainty, one executive decided to keep and maintain his employee's benefits, although his company was losing money at an alarming rate and shareholders were lobbying for a reduction of the company annual 300 million medical expenditure for employees.
One of the company's major shareholder even indicated to the CEO that this crisis would provide the perfect cover to cut benefits for part-time employees. But what this shareholder and other shareholders in the company did not understand about this executive is his unwavering commitment to his employees and his values.
The CEO felt so strongly about his employees; he told the investor he could sell his stock because his position was final. The shareholder sold his shares and cut all ties with the company; however, the CEO stood firm because he understood the value of his company and the promise made to all his employees. You see this company was the first company to offer medical coverage for full and part-time employees. If those benefits were cut, it would fracture the trust of the company and put the company in an even worse position.
The company rode out the crisis, maintain the benefits to all employees part time and full time, return to profitability and continue their dominance in the coffee business, further cementing their position as one of the most recognizable brands in the world. Although things look grim for the company in 2008 when Howard Schultz returned as the CEO of Starbucks, he however turnaround the business and kept the promise made to himself when he brought Starbucks. Never comprise the values of the company and always make the employees the center focus of the business because he knew, when you take Care Of Your Employees, they’ll Take Care Of Your Business.
Richard Branson famously said "If the person who works at your company is not appreciated, they are not going to do things with a smile," By not treating employees well, companies risk losing customers over bad service. To this end, Branson says he has made sure that Virgin prioritizes employees first, customers second, and shareholders third.
You are probably scratching your head and thinking how can you put your shareholders last, it makes no sense. But I assure you it makes perfect sense. According to Duran, the theory makes sense, happy and smiling employees are going to pass along this contagious joy to the people they serve. Craig Jelinek of Costco, for example, found similar success by putting their employees first. Costco is now the second largest retailer in the USA behind Walmart, and their stock has doubled since 2009.
It was Craig Jelinek who systematically implemented wage increases and refuse to cut healthcare benefits during the financial crisis when all other retailers were cutting jobs. This kind of leadership inspires employees, and as a result, Costco has reaped the fruits of this type of approach to business.
It is not rocket science, and it does not require any significant financial commitment from the company, it can be something simple as creating a learning organization, for example. When companies develop a culture of learning it helps employees feel valued – while making them more valuable.
According to PwC four out of five tech CEOs are concerned about the availability of critical skills. Providing training opportunities for employees not only boosts the organization but also assures employees you’re invested in their success. There are several simple initiatives any organization can implement to create an employee-centric organization.
The leadership, however, needs to inspire the team and lead by example. Richard Branson has 50,000+ employees at Virgin Group; most leaders would see a massive wage bill, Branson instead sees it as an opportunity for 50,000 brand ambassadors.
Vineet Nayar, CEO of HCL Technologies and the author of the 2010 book, Employees First, Customers Second. Indicated in an interview “Your employees are the gateway to customer satisfaction, and if they aren’t happy, the customer isn’t going to be happy."
The recovery of Starbuck started with an emotional re-connection with the values of the company by the leadership. Howard Schultz inspired everyone in that company to believe in the core purpose of Starbuck again, and as a result, the business has surpassed all the company projections.
Put your employees first, lead by example, inspire your employees to believe in something greater than their own well-being and your company will experience tremendous growth, admiration, employee loyalty and a deep emotional connection with customers.
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