364 | Customer First or Employee First? Which is best for you?

The big debate in business is customer first or employee first. For many, it is a hard decision. I asked seventeen Inc, 5000 leaders of the fastest growing companies, the same question. The only one said customer first. The other sixteen were firm in their stance that the best leadership strategy is to put employees first. When you put customers first, your employees can feel it to their core. When you create a culture of employee first, you have a chance to connect and support your people. When you take care of your people, they will take care of your customers. Customer first is an outdated concept in leadership, but it is smart in corporate strategy. Find out why I say this.

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Customer First or Employee First: The Transcript

I got a big question for you today. In your business, if you had to pick one, which would you choose? Customer first or employee first? Now I know it’s a very tough decision, because we’re taught to put so much focus on the customer. In marketing, it is customer first in everything we do, customer first, customer first. And so how in growing your business is it any different?

Well, the answer may surprise you, and a lot of people will actually disagree with me that it’s actually not supposed to be employee first, but I think those people are wrong. I’m taking a hard stance on this because it’s not just my insight that I’m sharing with you, this is the insight of the fastest-growing companies in America, the privately-held companies if you will. But they’re growing on average over 2700%, the ones I talked to. Now, this whole concept, this whole question is such a big deal, that I want to go into the depths of it, but before we get there, let me just explain to you a little bit about who I am, what I do.

My name’s Gene Hammett, I study hyper-growth companies that understand the chaos that’s going on inside those companies to really figure out the patterns of leadership and culture that make those companies thrive and grow faster than their peers.

Now, what does all that mean for you? Well, if you have a business and you’re on-track for growth, you want to grow really fast, then you’ve gotta make the decision in a very clear manner. Customer first or employee first? Now here’s the data. In the last two weeks, I’ve had 17 conversations with fast-growing CEOs.

The CEOs of these companies almost unanimously agree, I say unanimously, because there was one person who said, oh it’s so hard I can’t choose, if I had to choose it would be customer first. So, if we look at that, 16 out of 17 of these leaders said employee first, that’s 94.1% if you’re doing the math. And they all believe that the employee is the central focus to the success of the company. And developing that employee, growing that employee from the inside out is the key to their overall success, navigating change, navigating new technologies, disruption, innovation, everything comes back to the people. Now, I have so many of these conversations. I have a few things I want to share with you specifically they’ve said, but I also want to talk about what this means for you and your business.

So, let’s just go right into it. The reasons why employee first are, and I’m reading this if you look at my eyes, when employees love the company and are lined with emission, they take care of the customers, that’s a good one, right? Another quote is, employees are many-to-one relationship with customers. We develop employees so they serve our customers, love that one. And then finally, employees that feel cared for will care for the customers. I know they’re all similar, but there’s many different varieties of those same quotes throughout the conversation where I was talking to these CEOs about their growth and about what they’re doing to continue that growth inside their culture. And it was a focus on the employees.

Now, let’s take a bigger look at this, let’s look at what Zappos does. Zappos for a long time has been known for their culture. And Tony Hsieh says, “We believe happy customers “equals happy,” let me back up. “We believe happy employees equals happy customers, “and happy customers come back for more.” Very simply, now you may be looking for more data behind this. Well, I did the research on best places to work. Companies are focused on employee experience. And their stock market, the what is it, FTSE Russell has every year for about 18 years, got together the best performing companies. And actually, let me back up. The FTSE Russell, let me get to my data here, where is that? Bear with me for a second. Dah, dah, dah, dah.

Alright here it is, so the FTSE Russell goes back from 1998 to 2015, so pretty broad number of years. And the Fortune 100 Best Places to Work, so the top tier companies, these are not the fastest-growing companies, these are the biggest companies, but they’ve been designated as the best places to work. If you track their stock performance and switch it out every year on the best places to work, some of these companies like Salesforce has been there for many, many years, you would see a two to three times higher stock performance on best places to work. So companies that really focus on the employer experience are really getting a huge benefit out of putting employees first. Now how do they do that and what does it mean for you?

Well how do they do it is they actually really pay attention or are intentional about the culture they have, the values of the company, the mission that the company has. They are truly into transforming them, not just training them. They truly are into communication that supports them, and the feelings of safety that they’re really necessary to have people feel like they’re cared for. An over-arching kind of approach to this is these companies, the fastest growing companies, make people feel like owners inside the companies, even when they don’t have a stake at ownership.

So how do you do this? Well, I think the first step is understanding where you are right now. So you’ve heard me talk about culture before, I’ve got a score card, if you’re really into understanding this and you want to go to GeneHammett.com/culture and download the latest version of our Culture Scorecard. And it’s really about how you’re positioned for growth. And stay tuned for more insights around this, but that’s the first place to start, and if you have that, then you’ll be able to go further with this information, but I really want to go back to this, is it customer first or employee first? You have to make up your mind, you can’t dilly dally on this, I really believe that employee first gives you a chance to serve your employees as leadership inside the company and let your employees serve your customers, and that’s the way it works. So it’s employee first with a customer-centric focus.

Alright, that’s my answer, and thanks for being here at Leaders in the Trenches, and as always lead with courage, and I’ll see you next time.



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