Employees First Customers Second Quotes

The role of the CEO is to enable people to excel, help them discover their own wisdom, engage themselves entirely in their work, and accept responsibility for making change. (164)

that speaks to the little secret behind the relationships that small giants have with their suppliers and customers. It’s generally not the people at the top of the organization who create the intimate bonds. It’s the managers and employees who do the work of the business day in and day out. They are the ones who convey the spirit of the company to the outside world. Accordingly, they are the company’s first priority—which, from one perspective, is ironic. For all the extraordinary service and enlightened hospitality that the small giants offer, what really sets them apart is their belief that the customer comes second.

GET BEYOND THE ONE-MAN SHOW Great organizations are never one-man operations. There are 22 million licensed small businesses in America that have no employees. Forbes suggests 75 percent of all businesses operate with one person. And the average income of those companies is a sad $44,000. That’s not a business—that’s torture. That is a prison where you are both the warden and the prisoner. What makes a person start a business and then be the only person who works there? Are they committed to staying small? Or maybe an entrepreneur decides that because the talent pool is so poor, they can’t hire anyone who can do it as well as them, and they give up. My guess is the latter: Most people have just given up and said, “It’s easier if I just do it myself.” I know, because that’s what I did—and it was suicidal. Because my business was totally dependent on me and only me, I was barely able to survive, much less grow, for the first ten years. Instead I contracted another company to promote my seminars. When I hired just one person to assist me out of my home office, I thought I was so smart: Keep it small. Keep expenses low. Run a tight ship. Bigger isn’t always better. These were the things I told myself to justify not growing my business. I did this for years and even bragged about how well I was doing on my own. Then I started a second company with a partner, a consulting business that ran parallel to my seminar business. This consulting business quickly grew bigger than my first business because my partner hired people to work for us. But even then I resisted bringing other people into the company because I had this idea that I didn’t want the headaches and costs that come with managing people. My margins were monster when I had no employees, but I could never grow my revenue line without killing myself, and I have since learned that is where all my attention and effort should have gone. But with the efforts of one person and one contracted marketing company, I could expand only so much. I know that a lot of speakers and business gurus run their companies as one-man shows. Which means that while they are giving advice to others about how to grow a business, they may have never grown one themselves! Their one-man show is simply a guy or gal going out, collecting a fee, selling time and a few books. And when they are out speaking, the business terminates all activity. I started studying other people and companies that had made it big and discovered they all had lots of employees. The reality is you cannot have a great business if it’s just you. You need to add other people. If you don’t believe me, try to name one truly great business that is successful, ongoing, viable, and growing that doesn’t have many people making it happen. Good luck. Businesses are made of people, not just machines, automations, and technology. You need people around you to implement programs, to add passion to the technology, to serve customers, and ultimately to get you where you want to go. Consider the behemoth online company Amazon: It has more than 220,000 employees. Apple has more than 100,000; Microsoft has around the same number. Ernst & Young has more than 200,000 people. Apple calls the employees working in its stores “Geniuses.” Don’t you want to hire employees deserving of that title too? Think of how powerful they could make your business.

As I write this, I know there are countless mysteries about the future of business that we’ve yet to unravel. That’s a process that will never end. When it comes to customer success, however, I have achieved absolute clarity on four points. First, technology will never stop evolving. In the years to come, machine learning and artificial intelligence will probably make or break your business. Success will involve using these tools to understand your customers like never before so that you can deliver more intelligent, personalized experiences. The second point is this: We’ve never had a better set of tools to help meet every possible standard of success, whether it’s finding a better way to match investment opportunities with interested clients, or making customers feel thrilled about the experience of renovating their home. The third point is that customer success depends on every stakeholder. By that I mean employees who feel engaged and responsible and are growing their careers in an environment that allows them to do their best work—and this applies to all employees, from the interns to the CEO. The same goes for partners working to design and implement customer solutions, as well as our communities, which provide the schools, hospitals, parks, and other facilities to support us all. The fourth and most important point is this: The gap between what customers really want from businesses and what’s actually possible is vanishing rapidly. And that’s going to change everything. The future isn’t about learning to be better at doing what we already do, it’s about how far we can stretch the boundaries of our imagination. The ability to produce success stories that weren’t possible a few years ago, to help customers thrive in dramatic new ways—that is going to become a driver of growth for any successful company. I believe we’re entering a new age in which customers will increasingly expect miracles from you. If you don’t value putting the customer at the center of everything you do, then you are going to fall behind. Whether you make cars, solar panels, television programs, or anything else, untold opportunities exist. Every company should invest in helping its customers find new destinations, and in blazing new trails to reach them. To do so, we have to resist the urge to make quick, marginal improvements and spend more time listening deeply to what customers really want, even if they’re not fully aware of it yet. In the end, it’s a matter of accepting that your success is inextricably linked to theirs.

In 2009 Southwest Airlines was the largest airline in the world based on the number of passengers that fly the airline each year,30 and in 2011 it was not only America’s leading low-cost carrier but was also rated America’s favorite airline by Consumer Reports.31 Joe Harris, a labor lawyer for Southwest, explains that the company’s harmonious employee relations are no accident. “At Southwest, our employees come first; our customers come second; and our stockholders come third,” he said. “The rationale is pretty simple. If we treat our employees right, they’re going to treat our customers right. If our customers are treated right, they will come back and our stockholders will benefit.

In a tiny company like mine, it’s up to the owner to invent the way the company operates and to design the systems that keep track of what is happening. Fortunately, I find this to be an interesting challenge. If I had wanted to build only furniture, I could have kept myself very busy, but the company would not have grown. Without a rational way to handle information, we would have descended into permanent chaos. Thinking about information is different from ordinary work. The challenge is to find good ways, using data, to describe what’s happening in the real world. It’s aligning the description of the company with the activities of the company. My job as boss is to monitor both of these and to continually modify the description to fit the reality. My employees can’t do it—they each work on their piece of the process. I’m the only one who sees everything. I decide what to keep track of, and how to do it. I have two information systems. First, there’s my subjective impressions of the state of the shop, the mood of the workers, the eagerness of the customers, drawn from my observations and conversations. The second is objective, actual data that lives in separate fiefdoms: the accounting system, in QuickBooks; the contract and productions system, in FileMaker; e-mails and customer folders sit on our server; AdWords data lives in the cloud. So do our shared Google Docs spreadsheets, which act as supplementary databases. There are also a bunch of Excel sheets, dating back to 1997, when I first computerized (twelve years after starting the company). None of these subsystems talk to one another. Information passes between them via the people who use it. I’m the only person in the company who knows how it all fits together.

With a StoryBrand-inspired narrative, ordinary jobs become extraordinary adventures. With a unifying BrandScript, the above story would have gone more like this: Before even applying for a job, the prospective employee has already heard the buzz on the street about this cool company. It’s somehow more alive. The people who work there love it and so do their customers. They exude a sense of competence within their industry as well as across the community in general. Their leaders are respected. Even their former employees talk about it with a hint of sentimental longing. On the list of ideal places to work, there are few that compare. During the first interview, the candidate starts to understand where the buzz has been coming from. The hiring manager describes the company the way you might describe Lewis and Clarke preparing to tame the western frontier. There are interesting characters whose lives have led them to this place. Business goals sound like plot twists. There are mountains to climb and rivers to cross. There are storms to weather, bears to hunt, and treasure to find. The hiring manager is visibly excited as she walks effortlessly through the seven categories of the company’s narrative. But not just anyone gets selected for this expedition. The employees of this company aren’t trying to be snobs; they’re just staying true to the story they’re following and they don’t want to compromise the plot. If you happen to be selected, it’s because destiny basically demands it. Instantly the candidate’s concept of work shifts up a level. It’s no longer just about what he can get out of it. It’s also about who he will become if he’s allowed to enter the story. He senses that working for this company will transform him. By the second and third interviews, the candidate has met most of the team and even been interviewed by them. Everyone he meets tells the exact same story he heard on the street and in the first interview. The story is growing on him. He realizes he needs to be part of a story like this to be fully satisfied in life. We all do. Finally, his first day on the job arrives, and the onboarding experience is more like being adopted than getting hired. He spends quality time with a facilitator who takes a small, new team through a curriculum explaining the story of their customer and how the company positions themselves as the guide in their customers’ story. Amazingly, the onboarding is more about the company’s customers than it is about the company itself. This organization loves their customers and is obsessed with seeing them win the day. Finally, the new employee discovers the secret. These people are here to serve a customer they love.

For lack of a better term, we might refer to the process as building a sense of community—that is, a sense of common cause between the company, its employees, its customers, and suppliers. That sense of community rests on three pillars. The first is integrity—the knowledge that the company is what it appears, and claims, to be. It does not project a false image to the world. The second pillar is professionalism—the company does what it says it’s going to do. It can be counted on to make good on its commitments. The third pillar is the one we’ve been discussing—the direct, human connection, the effect of which is to create an emotional bond, based on mutual caring.

The second type of linear business model is a services company. Examples range from Oracle to JP Morgan to Jiffy Lube. These companies hire employees who provide services to customers. Generally, services companies fall in one of two camps. The first kind makes and sells physical services. Your car mechanic and plumber both fall into this category. The second builds human capital or intangible assets, like intellectual property, and uses those assets to sell specialized services.

Customers are first, Employees are Second and the Shareholders are third.

Have you ever met a new person and within seconds forgotten his or her name? It can be embarrassing, can’t it? Many people will laugh, brush it off, and say, “I simply can’t remember names!” But you should take remembering seriously.

Growing up with well-educated parents and an older sister with her Master’s Degree in English Language and Literature, I was left with little wiggle room as a child to use poor grammar. When I would inadvertently slip, I would be corrected in a matter of moments—excuse me, seconds! While it may have been irritating for a 10-year-old, I am eternally grateful as an adult that the grammar police kept me in line.

Having a second set of eyes to review what you do is an effective practice. Sometimes you will be so close to your own work that your blinders will cause you to miss tiny details which can create huge errors, and reflect poorly on your intelligence and expertise.

Applying a value lens to stakeholder capitalism, two ideas strike me as particularly important. First, business creates substantial value for customers, employees, and suppliers even if its only goal is to maximize financial returns. Think of all the stories in this book—Best Buy, Apple, Michelin, Quest, Intel, Tommy Hilfiger, and many more. Every one of them is testament to the ability of business to create significant customer delight, employee satisfaction, and supplier surplus. Competition is our best assurance that companies continue to innovate in service to these stakeholders. Second,

Emotionally intelligent leaders recognize that it’s not all about profit and loss. It’s not only the bottom-line numbers that matter. Perhaps more than any leader who’s ever graced the American business landscape, Kelleher recognized that it’s employees first and customers a very close second. This may seem counterintuitive at first, but it’s this empathetic and altruistic mind-set that enables the customer experience to happen. You see, it’s truly reciprocal.

Unless the company becomes obsessed with constant change for the better, gradual change for the worse usually goes unnoticed.

Isn’t Gresham on the route to get to Colton and the Association’s farm is just down the road from there?” Lt. Vincent rubbed his hand over his face. “Yes, figured you would think of that. But it’s not enough.” “Not for a warrant, but it’s an indicator.” They stared at each other. “My captain just assigned two three-man detective teams to the murder.” “You must have more. What about descriptions of the men? Didn’t the people in the bank give you anything on them?” “Not much. One army sergeant said that four of them were young, moved quickly. The fifth one seemed older, a little heavier, maybe overweight. Only one man spoke, the old guy. The rest of them just waved guns and pointed to put the tellers and the customers down on the floor. “Oh, the first robbery was just before opening. They grabbed an employee who had just unlocked the front door, pushed her inside, all five rushed in and they locked the door behind them. So no customers to deal with. “The second robbery was just before closing time. Again they locked the front door then put everyone on the floor. Two of the men vaulted over the counter so quickly that the workers didn’t have time to press the alarm buttons. So there was no rush to finish the job.” “With military precision?” Matt asked. “Sounds like it. They left both banks by rear doors that are always locked so nobody saw them make their getaway except one guy in the alley who was painting the rear of his store. He was the one who got the plate on the Lincoln.” “You knew the dead guard?” “Yes. He had retired from the PD before I came, but that was my bank and I always talked to him when I went in there. A nice guy. Good cop. Damned sorry that he’s gone.” “What about this lady cop?” “She’s off at four. I’ll ask her if she can have a cup of coffee with us here about four fifteen. Her name is Tracy Landower. She’s barely big enough to be a cop. She stretches to make five-four, and must weigh about a hundred and ten. She’s strong as an anvil tester. Strong hands and arms, good shoulders and legs like a Marine drill sergeant. She runs marathons for fun.” “I won’t try to out run her.” “Good. She has short dark hair, a cute little pixie face, and eyes that can stare you right into the pavement.” “Sounds like a good cop. I’m anxious to meet her.”   CHAPTER FOUR   Anthony J. Carlton was an only child of parents who were comfortably fixed for money and lived in a modest sized town near Portland called Hillsboro. His father was a lawyer who had several clients on retainer, who took on some of the toughest defense cases in the county, and some in Portland. He was a no nonsense type of dad who had little time for his son who had a good school and a car of his own when he turned sixteen.

On balance, disruptive innovation is very positive. In an isolated environment, something is being done in a traditional way. Then innovative entrepreneurs come out and say, “Hey, you can do this much more efficiently for a fraction of the cost and with a tenth of the number of employees.” For customers, it’s fantastic. But there are people who are losing jobs, which is not great for them and potentially a burden for society. Over the long term, however, if you don’t have disruptive innovation, you will become a country or a market full of incumbents and will eventually be disrupted by somebody else, which would be very bad for you. So yes, on balance, disruptive innovation is good. Many people think of technological innovation and entrepreneurship as an American, and particularly a Silicon Valley, specialty. You’re an example of the global spread of tech entrepreneurship. Are you an exception, or are you the new rule? This is something I’m really excited about. One of the reasons I started Atomico eight years ago was to prove that Skype was not just the one exception where a global tech company was created outside of Silicon Valley. Silicon Valley was the first technology ecosystem created. It’s been around for over 50 years. And it is the most prolific location for creating successful technology businesses. But we did some research and looked at the last ten years in the Internet and software sector to see where the billion-dollar companies were coming from. What we found was that 40 percent of those companies came from Silicon Valley and 60 percent came from outside. My prediction would be that over the next ten years, Silicon Valley will account for less than 40 percent. [For a technology ecosystem to thrive,] you need to have people who are encour aging. You need to have role models. You need to have capital. And you need to have people who want to come and work for these entrepreneurs. That is starting to happen in more and more places. Obviously, China, with Beijing, is in second place. But Sweden is now third in the world in producing billion-dollar software and Internet companies over the last ten years. There’s no lack of talent in these other places, and technology education is very good all around. Ten or 15 years ago, if you wanted to be an Internet innovator or entrepreneur, you packed your bag and bought a one-way ticket to Silicon Valley and made it over there. Today, you don’t need to do that. You can be equally successful in many other places around the world. This is an irreversible trend. I think you’re going to see more and more great entrepreneurs and great technology companies being created in other places.

Customers first, employees second, and shareholders third.