Article 5.6

WHY EMPLOYEES MUST COME FIRST

It may seem strange to some that employees should "win" preferentially from a firm before the customers, shareholders, managers and suppliers, but consider this logic:

Because a global-supply of all goods and services exceeds a slow-growth, post-consumer demand in the U.S. market, the customer is truly the king. Like Kings of Old, we as customers are expecting if not demanding incredible things such as: perfect quality goods and services unconditionally guaranteed; microsegmented variety of goods; customized service delivery options; instant fulfillment speed; convenience of ordering, paying, returning, etc.; and all for lower prices. We are getting more of our demands each year, and when we don't we are quick to change to other suppliers who are promising more. The suppliers who succeed in meeting the most demands are winning.

The front-line employees are the ones, however, who must make all of these customer expectations come true. As a result, too many firms are now looking for too few of the workforce who have the work attitude and aptitude to be: customer-service minded; flexible with jobs, hours, and work-speed; and responsible for quality and self-management. These conscientious employees enjoy a seller's market and can demand: better pay up-front; a high performance environment; a future that they can be excited about; or, they leave for the growing number of firms who are meeting these needs.

If a firm can hire, keep, and coordinate a team of achievers to give the customer exactly what they want and then some, an economic chain of events can occur. First, the customers will be happy, buy repeatedly and tell their like-needing friends about the firm. Then, the firm will be able to charge a bit more for distinctive performance and still grow faster than the industry by retaining customers at a greater rate than mediocre head-to-head competitors. And, with profitable growth, the shareholders, top management, and the suppliers will all rise with the positive economic tide.

But, how do we: make our firm an attractive place to work; find these scarce, quality employees; and then achieve the customers' expectations? A few guidelines might help.

EMPLOYEE-FIRST GUIDELINES

If we want quality employees, then we must see them not as a cost-containment problem, but as an appreciating, long-term asset. We will have to pay more upfront to get a choice of applicants; pick well; and then forward-invest in them to help them achieve black-belt 10th degree ability at perhaps multiple jobs to give the customer the fast, perfect, and flexible output that they demand. Short-sighted exploitive capitalism of "hire them cheap and work them hard" must be replaced with patient, servant leadership.

Because quality and speed must be built into a firms production systems instead of inspected out or expedited along, we must re-think systems to get rid of inspectors, managers, and expediters, so we can split the savings with fewer, better, more trained and more empowered employees.

If we start to hire a new breed of more talented employees at higher starting wages, what are we to do with veteran employees who make less and do less? We can raise and measure the performance standards for them; give them accelerated pay-for-knowledge and pay-for-performance programs to earn the same as the new; and give them the same new environment and leadership that we must provide to attract and keep the achievers.

Many veterans will complain and not want to be responsible, but some will change and rise to new levels of expectations and total performance. Depending upon the existing state of a firm, as many as 20 to 80% won't change and may resign or have to go.

If an improving team of achievers is to meet all of the customers' expectations, then they will need measurement systems for all of the customer performance standards as a tool for improving and stabilizing quality of output. Because this data sharing will eventually make the firm informationally transparent, we might as well immediately start sharing all of the general financial numbers with all of the employees and make them responsible for growing productivity and profits.

If premium profits are achieved because of their team effort, some sort of gainsharing bonus in exceptional years is a winning and reasonable proposition for everyone.

If employees are to stay with the firm and stay motivated, we must provide them with goals that motivate such as: best measurable quality in the industry; and personal growth. We must also design meaning into three relationships for each employee. One relationship would be between the employee and the company as an abstract entity, just as US citizens have a rights-and-responsibilities relationship with their country. A second would be with their job to have - enrichment, challenge, and growth. And a third relationship would be with all other employees, so that there is a sense of community and family among them.

CONCLUSIONS

One article can not detail all of the how-to's for achieving a high performance firm. What is important, though, is to remember that out of economic necessity some of the too many competitors in any given industry are meeting more of King Customer's seemingly impossible demands by putting employees first. They practice all of the guidelines mentioned above and more. Some of these practices are unnerving and seem risky to conventional practitioners, but the risk of not changing is greater.

Merrifield Consulting Group, Inc. Article # 5.6