"Employees First, Customers Second" — Your Team as Your Most Important Stakeholder

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Traditional employee hierarchy suggests that customers and investors come before your workforce. But Sir Richard Branson says otherwise in an Inc. interview: "If the person who works at your company is not appreciated, they are not going to do things with a smile," Branson says. If organizations don't treat customers well, they risk losing them because of bad service. That is why Branson makes sure his companies prioritize employees first, customers second, and shareholders third."Effectively, in the end shareholders do well, the customers do better, and your staff remains happy," he says.

Author Vineet Nayar outlines a similar premise in his book, "Employees First, Customers Second: Turning Conventional Management Upside Down." In the latest in a series on must-read books for HR Leaders, we take a deep dive into Nayar's book. Here are four key lessons on the employee hierarchy.

1. Move From "Command and Control" to Supporting the Value Zone

Nayar defines the most important part of his business as "the value zone." This is the function where value is generated for customers, whether it's producing innovative product ideas or ensuring seamless service delivery. He notes how in the past, businesses had a more rigid "command and control" structure that focused on a top-down hierarchy. Instead, his theory ensures the organization is structured to support the individuals doing the most critical work.

2. Focus Support Functions on Enabling Your Team in the Value Zone

Support functions can play a critical role in keeping operations moving. However, it's essential these departments are enabling your team in the value zone, and not standing in their way. Nayar notes it's often the opposite with oppressive policies and slow response times, which can create barriers and frustrations rather than solving a problem. He offers three key recommendations:

  • Streamline unwieldy or unhelpful policies to ensure policies are transparent and don't create burdens
  • Introduce a help desk model where workers can take out a "ticket" with support departments and expect a response within a certain amount of time
  • Aim for "zero tickets," which means support functions are working smoothly and anticipating workers' needs, so no problems are arising and there's no need to follow up on them.

3. Open Up 360 Degree Reviews to Spans of Influence

Annual reviews are often top-down reviews. When the 360 degree review model became popular, individuals received feedback from a relatively small group of people in their immediate zone of control. Nayar suggests taking a broader view during the review process. Evaluations aren't just a tool for determining raises and promotions. "Employees First, Customers Second" highlights the importance — and opportunity — of using reviews as a tool to streamline employee performance and coach teams on improvement.

4. Use Directions Meetings to Build Comradery

Directions meetings, or vision setting meetings, are a common event in the business world. As Nayar notes, organizational leaders often appear on stage, make their pronouncements and leave. However, he suggests finding ways to humanize management. For example, in his book he shares a story of a time when he opened his annual meeting by dancing to fun music. It surprised people and put them in an open mindset to talk about more serious issues.

The traditional employee hierarchy can slow organizations down and prevent them from delivering the agile, sophisticated solutions that today's customers demand. By inverting the traditional top-down approach and organizing the business around supporting employees who are creating the most value, HR leaders can increase business results and improve employee relations.

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Other articles in this series:

"Employees First, Customers Second" Unexpected Insights on Moving Your Business Forward

"Employees First, Customers Second" Transparency in the Workplace: Building a Culture of Trust

"Employees First, Customers Second" Unlock Employee Potential By Fostering an Entrepreneurial Mindset