Which Leadership Style Is More Profitable: Employee-Centered or Customer-Centered?

posted by on Tuesday, September 2, 2014

Effective leadership that balances the bottom line relies on a healthy respect for work-life balance as well as the needs of a company’s customers. That’s what Pivotal Health Solutions believes. Customer experience consultant Micah Solomon explains further in this recent essay on Forbes.com.

Wouldn’t it be great if the interests of shareholders, employees, and customers interlocked perfectly? If the day an employee fell ill were the day your customer wasn’t planning to come in anyway, and the day after the numbers had already been made for the quarter?

I don’t want to patronize my readers by stating the obvious, but in the real world things are a bit different.

In the world we do inhabit, an employee needs to leave work on time so she can pick up her kid from daycare, whether or not her replacement has shown up to cover her phone.  The boss, however, needs her to stick around to ensure full coverage. And the customer wants continuity in the handling of his project. These interests, you can see, don’t mesh together so well.

Let’s assume the role of boss, of leader, here. To be simplistic about it, let’s assume all we care about as boss is revenue, which we’ll define as maximizing revenue over the realistic life of the company or the brand. [Now, I don't believe for a minute that this is the only goal of a leader. I stand with Apple's Tim Cook on this, that there is a lot more to leadership than watching out for "the bloody ROI." But this is a simplified thought experiment.]

Now, here’s the question: As the revenue-seeking boss, do we manage for the customer perspective, or the employee’s?

Don’t worry, I won’t give you a trite answer like “both.” But I am going to give you a deeply thought-out answer…of “both.” There just isn’t any other answer.

If you lead just for employees you won’t get anywhere. Period. Although it’s true that customer and employee interests do often intersect — the customer wants to be happy, the employee wants that great feeling of making a customer happy; the customer wants a problem solved, the employee wants the feeling of mastery that comes from solving a problem — they don’t always. Convenience for the customer can mean inconvenience for the employee. Low prices for a customer can mean less money for the employee at review time. And so forth. Managing just for employees means that soon you won’t have a business left to support those employees.

If you lead just for customers though (an approach which, as a customer experience consultant, you might expect me to recommend), you’ll lose your soul — and fast. Inevitably, you end up treating your employees as less than human. Calling your workers in at all hours. Making ridiculous demands to suit ridiculous people. You become twisted like (I would argue) the Amazon.com managers working for “the most customer centric company in the world” who interpreted that mantra as meaning Amazon didn’t need to install air conditioning in 100 plus degree warehouses because, hey, the employees aren’t customers.

So how should you lead? I think the  best leadership approach for profitability and a superior customer experience looks something like this.

1. Realize that the ultimate success for the company — and thus, I hope, for the employees — depends on starting with a customer perspective.

–but–

2. Because employees matter, because, specifically, having happy, fulfilled, unexploited employees matters, accept that deft navigation, a skilled hand on the tiller, is required for the places where customer and employee interests diverge. Creativity, in other words, rather than resignation, may carry the day.

Many times, it’s not actually the interests of customers and employees that diverge, just the perspective. In these cases, make a very conscious, continuous and tireless effort to understand the customer perspective. My #1 rule of customer service success is that the customer is at the center of the customer’s universe. And customer-perspective-friendly improvements you make along the lines of learning to use customer-friendly language, increasing training, refining hiring techniques, improving facilities, reducing wait times, becoming more mobile-friendly, and so much more are not areas of inherent conflict, they’re improvements that can be made without causing stress to your employees.

In other cases, it’s worth learning the customer perspective even when it seems initially anti-employee. For example: The customers want 24-7 coverage, and they want it carried out by a single employee, so they never have to explain themselves twice. That’s what they want. And ridiculous though it seems, it makes sense from a customer perspective

Knowing this, bend in clever ways. Customer-friendly phone coverage, to continue this example, can be accomplished many ways other than by making an employee take a cellphone to bed. The IVR (interactive voice response system) at USAA Insurance, for example, allows you to be routed, at midnight, to a representative who knows all the details of your situation, even though she’s different from the one you spoke with during daylight hours. Allowing your customer, your employees, and even your CFO to get a good night’s sleep.