By William V. Jones
Recently I spoke to a board of directors representing a new community bank celebrating its
first year of operations. My focus was to deliver a short message about the
"personal touch."
I was fascinated by a report that I had seen on
national news about major banks opening branch offices across the country.
It had only been two years earlier that these same banks announced the death
of branch offices. Branches were being replaced by ATM machines
and Internet banking because people wanted access anytime, every day of
the week.
The result of this high-tech approach was the banks' business
swooned. New research was conducted to find out why. The bottom line was that
customers wanted to give (or take) their money from a human being, not a
machine or virtual banker! People trusted a friendly face not a well-oiled
service that gave them 24 by 7 services. Hence, the push to re-open branch
offices and lure customers back.
Community banks found their niche in the
marketplace because they already understood that people wanted a "personal
touch." As the American economy struggles to regain its position in the
global marketplace, how much emphasis will be placed on human to human
interaction? More importantly, will American businesses realize that
the most critical cog in their profitable future is quality interactivity
and personal preparedness of the frontline employee? A customer will only be
loyal to a company when the people they contact deliver quality,
personalized solutions to meet their needs.
SAS International is a company located in North Carolina that has enjoyed an unprecedented 26 years of
double-digit profitability. The company has been featured twice on
the news show, 60 Minutes. You can obtain a synopsis of the show by
visiting CBS
(http:/www.cbsnews.com/stories/2003/04/ 18/60minutes/main550102.shtml) and
read for yourself about the total commitment to the "personal touch."
The bottom line is that CEO Jim Goodnight is loyal to his employees. His
philosophy is based on the premise that when employees go home at the end of
the day, his job is to bring them back. That kind of employee loyalty has
led to virtually no turnover (less than 3 percent) and
outstanding customer care that keeps contract work growing. In
addition, the company's commitment to its workforce creates
an unprecedented demand from others seeking employment at SAS, thereby
minimizing dependency on head-hunter services.
At SAS, and many companies
like them, taking care of employees is personal, not business. Millions of
American workers have heard the line, "nothing personal, just business,"
as they are being escorted out the door. Work is personal and when these
employees are asked to be customer-friendly in the future, it will be
difficult.
Employers will need a workforce, sooner than later, that
can build customer loyalty. Many indicators suggest that the economy is
growing. In fact, annual growth was recently measured at 7.2 percent for the
2003 third quarter, the best since 1984. Companies are again showing interest
in hiring workers, adding 57,000 full-time and 33,000 temporary jobs in
September, 2003. Company spending was also robust at over 11 percent, the
highest spending in three years.
Productivity gained to this point has been
accomplished either with new technology or by stretching the workforce to
create more with less people. For sustained growth, companies will need to
commit to a larger workforce that is customer-friendly (consumer confidence
and spending drive company profits). The multi-million dollar question is:
"Since employees are plentiful and willing to work, hiring grateful people
will automatically create loyalty, right?" There are several reasons to
recognize that question as fatalistic.
First, employers do have the greatest
pool of available quality workers ever assembled. Manpower experts estimate
that over 70 percent of college graduates over the past three years
were not offered a job requiring a college degree. A degree is now
a symbol of people seeking meaningful work at a fair wage. Hence,
employers now have access to people that in the past may have been overlooked
because they were too expensive or "over-qualified." These well-educated
people are eager to work so they can pay college loans. Mainly they will ask
if your position is tied to meaningful employment (immediately satisfying
outcomes with a chance for wage growth and promotions). Treating them as
replacements or temporary workers will have them quickly abandoning your
company. Turnover as a result of negative behaviors is very costly to a
company.
(A quick comment about the label "over-qualified." In an
era where talented people can make the difference between mediocrity and
success, why not hire everyone you can afford? Build high-power teams that
can problem-solve and address deal with your company's needs. Quality
companies are currently stock-piling talented employees to be prepared for
growth and demand. It is much like a professional sports team adding players
for the playoff run.)
Second, employers have the luxury of hiring quality
employees at wages 40 to 50 percent less per hour than 5 years
ago. Manufacturing jobs (without adding benefits) paid an average of $17
per hour whereas retail pays an average of $9 per hour. An American-based
software engineer would earn between mid-$40K to mid-$60K just a few years
ago. Today, that job has been outsourced to India where a quality engineer
can be hired for less than $12,000 per year. That means American engineers
are now plentiful and available at very affordable rates. People will take
your job but their expectations of you as a leader are higher because you pay
them less. Their tolerance for any lack of respect from management will be
low and the resulting negative attitude will be detected by your
customers.
Third, companies no longer feel obligated to offer a
benefits package. I suspect that given a choice between more high-paying
jobs and fewer jobs with benefits, people will opt for the high-paying jobs.
The savings from health care, retirement and other long-time
entitlements are not pocketed as company profit. The savings
are re-invested in the employee as part of an incentive package (money
and/or education). As an employer, you gladly offer these quarterly
incentives because it benefits you the most. Continuous learning is the
greatest asset you can develop in your company. Unlike technology that
ages and becomes obsolete, employees committed to learning will adapt and
grow.
Fourth, thanks to the global market and economic scales that rapidly
change, companies are no longer committed to the idea of "lifetime jobs."
Employees are also conditioned to accept that a job may only last from a few
months to a couple of years. This creates a strong sense of urgency
to quickly gain employee loyalty. A workplace filled with apathy can
rapidly develop and may never rebound leading to customers leaving in great
numbers.
So what should be your company's strategy to create loyalty fast?
Honesty, integrity and a genuine interest in the well-being of your employee
is your foundation. (There's not a company in America, regardless of size,
that won't say "Duh, we've already got that in our mission
statement!") Every company pays homage to these words but few, like SAS
International, actually live it. Because the "personal touch" begins with a
positively-centered workforce, the following steps are suggested:
Step
One. Make every new employee part of your team by conducting a world-class
orientation program. If you don't know how to set up a world-class program,
contact your local university. They do it every year with their
freshman class. The points that every company miss are: who is involved
and who is invited.
Here is a clue: treat orientation like a "pep rally" and
get your team ready to "win."
Step Two. Employers have every advantage
right now: lower wages, reduced benefits, "at-will" terminations and a
plentiful, qualified personnel pool to choose employees. As employers, be
honest and recognize these employee disadvantages during the hiring process.
Follow that discussion with your "personal touch" strategy by
outlining your "top-shelf" education and personal growth
program. Education comes in two packages: internal and
external. Internally, your training program is organized, tied to quality
outcomes and has a training team that is accountable for the employees'
success. It is so good, that at the conclusion, the CEO/President writes a
letter to each "graduating" employee stating that they have completed the
program and you would highly recommend them to be considered in future
employment for any new company. Externally, every employee has a personal
growth plan that begins immediately after orientation. Working in
partnership with local providers, employees are schooled on how
to diversify and learn various skills. This effort reduces
the vulnerability people feel when they lose a job and begin looking
again. Have managers sit with each employee and design a personal education
plan that includes career advancement in your company.
Step Three. Set
your work standards high and help people reach quality outcomes. Create a
corporate culture that emphasizes "spit and polish," strong communication
skills and leadership. Never tolerate those people who are just getting
through the day; it brings the entire workplace down. This viewpoint may
sound harsh, but people want to be associated with a winner. As long as you
set the bar of excellence high and assist people to be
successful, employees will be proud of their company. And, just as in the
case at SAS, more quality people will seek you out as an employer. It's the
reason why so many athletes want to play for the New York Yankees: the goal
is a championship every year!
Unless all the business and psychology
studies are wrong, people want meaningful employment and management
that cares. The "personal touch" for most employees is
face-to-face contact with decision-makers at all levels. That
builds employee loyalty. The result is loyal customers and sustained high
profits.
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