08 Jul The winning strategy for 2020: Put people before profit.
The tagline ‘people before profit’ sounds like a grand political slogan, but how it relates to today’s business climate is important to understand.
The phrase is simple enough: put people first and profits will follow.
It does not say that you can’t put people first and drive profits for your business. Some of the world’s most iconic brands (e.g. Netflix, Amazon, Slack) have taken a customer-centric approach to the creation and sale of their goods and services.
Not only can this enable profits, it can avoid customer service pitfalls that result in damage to reputation (we all remember the experience of a United Airlines customer being dragged from a plane in 2017 for failing to give up his seat to a staff member).
Customer-centricity has rightfully been a focus for businesses over the past few years. But of equal importance, and not talked about nearly as often, is the focus on one’s own employees.
Most businesses start with an idea and a small team, and scale from there. With growth comes new challenges, including more decision-makers and new processes. Though employee-centricity can be difficult in practice, it is critical that business leaders think deeply about the relationship they want to have with their employees.
Focusing exclusively on profit can hurt company performance
A study published by researchers in the United States found that “high bottom-line mentality supervisors serve as low-quality exchange partners with their employees, resulting in employee perceptions of low-quality leader-member exchange (LMX) relationships. In turn, employees reciprocate by withholding the very thing the supervisor desires—performance—in order to maintain balance in the exchange relationship.”1
To put it in plain English, focusing exclusively on profit can hurt employee morale and limit productivity.
I’ve worked with team leads and executives from organizations large and small, and I’ve seen first-hand that business leaders who create an employee-centric workplace drive strong employee retention and profits.
Look no further than Forbes ‘2019 best companies for corporate culture’ list, which includes brands such as Zoom and Microsoft. These companies focus on developing their employees, which in turn drives their profits. This includes trusting and respecting your employees and employing them to help the business drive change.
One key pitfall I’ve come across is that people managers fail to understand that the relationship between employee and employer isn’t simply transactional. Your company isn’t just giving an individual a paycheck and benefits for their work.
You are creating a partnership with your employees and providing them with an enjoyable work environment where they can learn lasting skills and develop as an individual is a driver of success.
What does your organization need to consider?
When determining if your organization is taking an employee-centric approach, answer the following questions:
- Do your employees understand their role and the expectations of that role?
- Have you provided adequate training / onboarding for your employees?
- Have you invested in employee development?
- Are there career development plans for all employees?
- Are you able to embrace the optimal way of working for each employee?
- For example, some employees may be more productive at night. Others may want to start early but leave by 3pm to spend time with their families. Can you support this working style?
- Have you provided an outlet to appreciate your employees (e.g. have you highlighted their contributions at an all-company meeting)?
- How are you incentivizing employees to go above and beyond?
- Have you encouraged your employees to actively participate in decision making related to the future of the company? Have you even given them a voice at the table?
Most businesses feel they are employee-centric, but I’ve seen far too many examples of leaders that don’t understand the employee journey. Perks such as ergonomic chairs and unlimited drip coffee can be wonderful, but nothing is more employee-centric than building an organization around your most important asset – human capital.
Employee empowerment is key to organizational growth. Ask your employees what they’d like from a workplace, actively listen, and provide clear guidance and feedback. Employee-centricity is a win-win for business in this highly competitive world.
What will you do to foster an employee-centric mindset within your company?
Quade, Matthew J., McLarty, Benjamin D., & Bonner, Julena M., (2019). The influence of supervisor bottom-line mentality and employee bottom-line mentality on leader-member exchange and subsequent employee performance, Sage Journals, https://doi.org/10.1177/0018726719858394
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Written by: Liam Miner