Why putting staff first is good for business
“Putting staff first is good for business” isn’t really a novel concept anymore. It’s become a well known fact. The problem is a lot of companies don’t know how to put staff first. For several decades (roughly 80s through the 90s boom and in to the 2000s) we went through a time where businesses were solely focused on shareholder value and profit. Customers were an after-thought and staff were an unavoidable cost.
How did we get here?
According to the Independent “In the 1960s, the UK decided it needed its own business schools. On the recommendation of the Franks report, the Manchester Business School and the London Business School, were established. Other universities followed suit and companies began to provide management training for their employees; Henley Management College, Ashridge and INSEAD in France, started in this way.”
I guess it took another 20 years or so for this MBA way of doing business to take hold. The result was big profits for shareholders with unhappy staff and customers which also resulted in a boom and bust economy. A great example of this is IBM. In the mid 2000’s IBM treated it’s staff appallingly adding to the IBM Staff Pension Fund scandal. During the 2007 crash the treatment of staff grew worse and the answer was a constant “Just be grateful you have a job”. As things started to pick up a large amount of staff left and they have found it very difficult to attract younger staff ever since. The result on the share price is quite obvious to see here at macro trends.
In the late 90’s early 2000’s I had the great privilege of working for Tivoli Software in the early days of IBM ownership but before it was taken over properly and swallowed up as a product. Jan Lindelow was a fabulous inspirational leader, the company was truly like one large “family” and team wasn’t just an empty word. I loved every minute at Tivoli until we were all put onto IBM contracts and life changed in an instant. Off the top of my head Tivoli went from a few million turnover when I joined and we were on track to hit $2 billion when I left only 3 years later. I left because working under IBM the little things that made it great to work for Tivoli disappeared and I became a number rather than a person.
Over the last decade companies have started to realise that treating staff like a number is not good for business. Customer satisfaction was on the floor, all concepts of brand loyalty were gone and staff retention has been extremely difficult and costly. Newer younger companies have come in with the honourable intention of treating staff well however, because they are still adopting the old business school mindset towards running a business, they are unfortunately, for the most part, merely paying lip service to caring about their staff and customers.
Throughout my career I have been privy to watching great examples of how to do it and how not to do it. One young company paying extreme lip service to caring about staff and only interested in the bottom line and one medium sized company where the CEO does actually care about it’s staff and customers particularly come to mind right now. The difference is astounding and it shows in the examples below.
How NOT to do it:
The young company talks about team and family but has an astronomical churn rate with many junior staff members leaving within 6 - 12 months and many senior members leaving within 1-3 years. They also struggle with “finding the right people” when hiring new team members. You can see why because the CEO leads with an iron fist. I heard a truly shocking account of an appraisal conducted at that company. I am someone who is very “un-woke” and says it how it is, I want to hear the truth from my staff rather than beating around the bush. I struggle with being PC but I can take honest and frank discussions. So despite being the opposite to a “snowflake”, from this account I heard bullying, sexism, discrimination and destroying a young person’s enthusiasm with the age old “be grateful you have a job” sentence thrown in. This seems like a strange tactic considering the issues they are having with their attrition rate. Unfortunately the HR Manager is still using the traditional philosophy of putting the profit before the people and seems to have missed that the world has moved on from this ideology in the last 20 years. Luckily this young person doesn’t need the job and is only there because she believed what the company says it stands for on paper and she likes her immediate manager and colleagues. Time will tell if this is enough to keep her but this is also a perfect example of people leave managers not jobs.
How To Do It:
On the other hand the medium sized company has a CEO that truly cares about the well being of its staff world wide. This CEO was the first to take a pay cut in March 2020 and then on a weekly basis the next level of senior leaders took pay cuts so that nobody was made redundant and those on less income did not have to take a pay cut. This CEO insists on a gym in the office which any employee can use at any time along with an in house personal trainer. They have a canteen that only supplies fresh, good quality, healthy food free of charge. His staff love working there and during the difficult year that was 2020 most staff gave everything they had to make sure the company still hit their numbers and senior staff were rewarding by getting their full salary back as soon as possible.
History is littered with stories of successful and unsuccessful companies but we have reached a time in history where with the internet there are more millionaire youngsters than we could ever have imagined. I hear from so many industries about how difficult it is to find good staff. You only get good staff by being a great leader. Remember that age old saying “People leave managers not jobs.” and it’s true.
With the year we’ve had there is more burnout and more lack of interest in employees than ever before. If you’re of the opinion that your employees are lucky to have a job it may be worth looking at how productive your staff are. Happy healthy staff “produce” more. People who love their jobs produce more. People who feel unappreciated and burnt out do the bear minimum.
With the end of lockdown in our sight now is the time to put a strategy in place for the rest of the year ahead and long term. How are you going to reopen or start new? How are you going to adapt to this “new world”? How do you want your customers to see you? How are you going to attract the right people? How are you going to retain the staff? (staff churn costs a large amount of money). How are you going to get the best out of your staff? How are you going to reduce sick days? (Sick days cost money). How are you going to create sustainable growth and get off the boom and bust rollercoaster?
Simon Sinek has a great video about Noah. Please take a look and ask yourself how much do you and your staff love their jobs?
