The book "Employees First, Customers Second: Turning Conventional Management Upside Down" by Vineet Nayar offers business leaders a unique perspective on how to approach their most challenging problems — employee engagement, productivity and long-term sustainable growth.
As part of a series on must-read books for business leaders, we're exploring the insights Nayar's writing offers finance executives. By showing the long-term financial value of transparency, building a culture of trust and creating an organizational framework that supports your most critical employees, "Employees First, Customers Second" challenges conventional notions about business.
Look in the Mirror
According to Nayar, it's critical to strategically assess how the business is performing. Employees often know something is wrong in the business before management, and when management's assessments don't line up with their own observations, it can erode trust and project the image that leadership is out of touch.
For finance leaders, this shows the importance of ensuring there's a strong understanding throughout the organization of past, current and projected financial performance. Finance information provides objective context for strategic, tactical and HCM decisions, and helps contributors at all levels of the organization see the bigger vision.
Build a Culture of Trust
Once you've achieved clarity on where the changes are needed, Nayar says it's easiest to achieve this through radical transparency. As Harvard Business Review (HBR) notes, there's a strong correlation between trust and financial performance, and research has found that businesses with the highest levels of internal trust outperform Standard & Poor's 500 Index. To foster trust, there are key steps businesses can take, including:
- Be honest about the current situation, including providing some level of visibility into financial performance
- Include information about bad news as well as good news to show that transparency is a value
- Build on that transparency and trust to tie proposed changes and solutions to the problem
- Humanize management by acknowledging errors and taking a personal tone in organizational and direction meetings
- Empower decision-making in the value zone and involve employees when developing solutions to organizational challenges
Invert the Employee Hierarchy
Nayar advocates a perspective that puts employees first and customers second. Inc. reports that Sir Richard Branson's own philosophy aligns with this mindset. "My philosophy has always been, if you can put staff first, your customer second and shareholders third, effectively, in the end, the shareholders do well, the customers do better, and yourself are happy," Branson says.
From a financial perspective, engaged employees tend to produce more. As Harvard Business Review notes, when measured correctly, employee engagement can correlate to higher levels of productivity and decreased turnover, which both directly impact the bottom line.
Invest in the Value Zone
From a strategic point of view, Nayar suggests investing resources in supporting what he calls the "value zone," which is the interface between your employees and customers where value is created, and in turn, revenue and profits generated. By aligning your management structure and support services to enable your employees in the value zone, your business becomes a streamlined performer that's focused on maximizing the bottom line. One tangible solution, according to Nayar, is using a ticketing system to resolve issues with tech, HR, finance and other departments to more adequately measure performance and ensure that core issues are resolved.
"Employees First, Customers Second" challenges business to take a hard look at their core principles and asks them to make strategic improvements to ingrained processes. Looking at employees as the source of value creation can help organizations steward its financial resources — and strategic and tactical decisions — in a way that helps maximize revenue and profits. Building trust and organizing to support the employees that create the most value for your firm can lay the foundation for long-term financial success.
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