In the Teeth of Difficult Economic Conditions Customer Focus and Employee Engagement Article


Managers are faced with a pressing and crucial dilemma: in the face of difficult economic conditions, how to serve the customer as well as possible AND achieve this with high levels of employee engagement.  The one must be closely entwined with the other-diminish one and the other will suffer. Yet everything looks stacked against the manager: uncertain business prospects, fierce price competition, low profitability and cutbacks commonplace, whilst employee morale has suffered as the usual range of motivators has been whittled away. Many employees have been starved of the traditional means of recognition-bonuses, pay rises and “perks”; what is more, with staff reductions, overworked employees feel they are having to do more with less.

Two personal examples illustrate the effects of juggling twin cost and customer goals, and achieving -or not achieving- a balance.  when one of the authors went to stay in a budget hotel in the midst of a heavy snowstorm,  the receptionist was welcoming, enquiring sympathetically about the difficulties of the journey and asking if extra bedding might be helpful in the room. In the restaurant, the waiting staff were personable and attentive.  The next day the manager allowed a morning's stay in the room at no extra charge, until the worst of the weather abated. The chambermaid was being held up from cleaning the room, but her response was understanding and helpful-she offered extra teas and coffees. The hotel had pared down its costs, yet team spirit and customer focus shone through.

In complete contrast, when one of the authors went to a reception desk recently they were kept waiting for long time while the receptionist carried on with paperwork.  Eventually she looked up and miserably said “We used to have three people on this desk, now it’s only me- it's too much”. She could then be heard complaining loudly about one of her colleagues. Costs had been saved, but with considerable damage to both service and engagement.

How do you ensure staff continue to pull together and present a helpful attitude, as in the first example? Initially when times become difficult, employee engagement rises as people work hard to keep hold of their jobs.  Yet as the downturn continues management can become distracted, many employees are likely to be feeling less and less engaged, more ready to leave - yet feel unable to do so, trapped in an organisation that perhaps no longer commands their loyalty and respect. 

Yet satisfied customers and engaged employees are the supporting butresses of any business, and employee enthusiasm perhaps the most critical way of achieving high customer satisfaction and business success. In 2008 Watson Wyatt found that organisations with motivated and engaged staff are far more profitable than those without. Businesses that succeed in fostering the engagement of their employees typically achieve more flexible working practices, less rigid approaches and bureaucracy as well as greater responsiveness to their customers.

How can managers achieve the balancing act of cost containment and at the same time keep and enhance a committed and customer- focused organisation?  Retaining customers is the most cost effective way to do business, so managers need to put heightened focus both on existing customers, as well as attracting new customers.

Small wonder many managers find this challenge so daunting.

So what’s so special about engaged employees? We need to remind ourselves why engaged employees make so much difference in a customer context-they are much more likely to:

• Give discretionary effort to exceed the expectations of customers
• View change as challenging instead of intimidating
• Welcome opportunities to learn and develop

Given the right culture, good service is much more likely to happen when employees are actively engaged.

How to create a motivating environment

Typically employees are motivated when a set of linked factors come together:

• They are part of an open culture
• They have stimulating and challenging work to do
• Both management and employees interact on a regular basis
• Companies strive to develop meaningful two-way relationships.

Serial entrepreneur Allan Leighton has taken on, and made headway, in organisations he has led through active listening and debate. He aims to build foundations that start with a straightforward primary assumption –respect and listen to front-line staff and act on the results:

“… the vast majority of people want to do the right thing. Convince them that the right thing is to be open an honest and you’re on your way.”

We concur with this approach; an engagement and customer strategy will succeed if consideration is given to four inter-related principles: well¬-being, information, fairness and involvement, WIFI.

Four Principles of Employee and Customer Engagement

1. Well-being

Well-being at work encompasses many things, but essentially it means that employees care about their company in return for the company caring about them. A state of well-being means employees take pride in their work and are proud of their organisation. Well-being shows itself with employees who feel that their physical and psychological health is an organisational priority. Does this apply to customers? At its most basic, companies have a duty to ensure their products and services carry no long term harm. More proactively, companies need to harmonise maximising customer satisfaction with long-term customer benefits. In the end, a “profit at any price” approach will lead customers to turn away.

2. Information

Information must flow unhindered in a vibrant company.  Employees need to be informed about the performance and future direction of the organisation as well as their own performance and future. This requires involvement of all stakeholders. To achieve this, Chrysler managers conduct regular employee meetings to surface concerns and work them through. A large telecommunications company conducts monthly video sessions where a staff member interviews an executive. In too many organisations, employees suffer from inadequate feedback on their performance whilst managers complain that performance reviews are time-consuming and an imposition. In well-managed companies, performance management and communication is central to the way the organisation is run. For customers, organisations need to be transparent, with easy-to-access product and company data.

3. Fairness

Fairness is about dealing with employees and customers consistently and equitably throughout their entire relationship with the organisation – for employees, from recruitment and hiring, to professional development, to rewards and promotion. Companies that fail to nurture their company’s talent fairly and without favouritism risk under-utilising their most gifted employees, who may leave in frustration. Employees must have stimulating, challenging work. The workplace should be a positive environment where managers praise individual and group efforts to deliver to accepted standards. Some companies empower managers to award non-monetary prizes for exceptional work-the amount of money may be small, but recognition is important. Customers need confidence in the company, that one customer will get no less favourable treatment than the other, and that companies do not hide behind legal loopholes.

4. Involvement

Managers can easily lose touch with the needs and concerns of their staff. Companies should strive to cultivate positive relationships between senior managers and employees. Leaders who retain regular contact send the motivating message to their employees that they welcome and encourage involvement.

Involvement will often lead to employees having autonomy and authority to make independent decisions. Empowered employees have the potential to contribute more, be more productive, creative and energetic. Honda employees are take pride in their company, which makes great efforts to encourage communication and involvement. Companies should strive to cultivate similarly meaningful relationships between senior managers and employees.

In dealing with customers, they must be involved in any product or service introduction or redesign. Regular focus groups and customer panels will help assert the voice of the consumer.

When the Midlands Co-op set out to improve its customer attractiveness and profitability, it started by looking at the views of its employees and its customers in tandem, using focus groups.  It strengthened its culture by developing new values, such as a high recognition culture and improving customer satisfaction and retention.

Actions to maintain customer service excellence through employee engagement

Establish customer satisfaction as a clear business goal and ensure that customer satisfaction features in all individual objectives.

Almost every organisation professes to keep the customer as their number one priority.  In practice, other priorities take over.

Use satisfaction surveys and other forms of feedback

One way to ensure that changing customer needs and employee issues are constantly monitored is through the use of surveys and feedback mechanisms.

Formulate a clear strategy with specific goals

No aspiration is likely to get anywhere without operationalising it into a much more specific strategy, with clear goals, agreed timescales and measurement.

Identify what motivates each of your team members

Every person is different.  As a leader and manager your role to create a climate where people give of their best.  Find out what makes your team members “tick”: responsibility, achievement, advancement, recognition, affiliation, power?

Implement continuous employee development

Employees need regular updates on their skills and performance, using periodic coaching and feedback through to development programmes.

Devolve the power to make decisions and resolve complaints

Nothing makes a customer more irritated than when complaints take too long to be resolved.  Giving employees training in how to handle complaints and discretion to resolve problems quickly.

Communicate till it becomes second nature

Employees are frequently starved of insight into what is going on in their own organisation, they are simply told what is happening via instructions and orders with no rationale behind it. Customers can get left out, too, with disastrous consequences.

Reward and recognise employees

Customer focused behaviour deserves to be recognised; in practice targeted behaviour often goes ignored while mistakes suffer the “scapegoat and blame” treatment. A reduced budget should not stop all recognition –find new ways to do something: a personal letter, a small gift, public recognition, a simple, sincere “thank-you”.

Stay focused on the customer

It's so easy to take the eye off the ball when it comes to serving the customer.  This is particularly true at the moment when the key issue appears to be cutting costs.

Managers must lead from the front:

There is a saying: employees join an organisation and leave their boss.  A team member’s line manager has a powerful influence in shaping their attitude and approach to customer service.

Successful managers:

• Share pride and vision of the organisation
• Communicate widely and in a variety of ways
• Earn and develop trust: a team’s immediate manager must be capable of being trusted, because he or she understands what the company is about, and is open and honest in conveying those ideas to the employees.
• Encourage active listening and do not filter out the results
• Promote a genuine "we're all in this together" atmosphere and practice

In conclusion

Whilst no-one should deny the present difficulties, there are practical ways to reach high levels of customer and employee engagement, thereby countering inevitably constrained resources and tight budgets.

Fostering true employee engagement and customer focus comes down to the discipline of creating the right culture and taking active steps to maintain it. Senior managers must actively set the tone for engagement and customer focus in any organisation. Employee engagement linked to customer service only develops with top-¬down commitment and constant follow-through by managers. Managers, heed the message: consistently demonstrate integrity, visibility and leadership. Above all, be prepared to listen and act on what all your stakeholders say.

Steve Macaulay and Sarah Cook are development specialists who focus on helping managers and organisations to achieve change in a customer-focused way. Steve is a Learning Development Executive at Cranfield School of Management, Sarah is Managing Director of The Stairway Consultancy. She is the author of “Customer Care Excellence” and “The Essential Guide to Employee Engagement” both published by Kogan Page.  Steve can be contacted via email on; Sarah on

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