Employee is the most important customer

T. Karekalan Department of Management Eastern University

The Sri Lankan market comprises many small- to medium-sized "service" businesses. I look at these organizations and wonder if they are a product of their product. To be truly successful, a business really has to serve two customer bases. The customer base most focused on is typically the revenue-generating one.

However, considering cause and effect, the internal customer (the employee) should be on at least an equal footing with the external customer. This leads me to a question to those of you who lead or manage people:

If you consider the people that worked for you as your largest and most important customers, would you behave or see them any differently than you do today?

For those who have a tendency to lean on authority to motivate their employees, let me give you something to think about. Reporting to you on a daily basis means that we have a customer relationship.

I say this because if I do not keep you satisfied you are going to help me move my career in a new direction. However, if I am not satisfied with you, I have two options. I can resign or go on silent strike.

If I choose the latter, I will give you only the minimal performance to keep my job, but you are never going to be able to get spectacular results from me. While this is scary for any business, it can be devastating in a service business.

Let us consider internal customers from three different perspectives: external customer, other internal customers, and bottom-line impact. From the external customer standpoint, they are going to be most comfortable dealing with familiar faces that know exactly what, when, where, and how they like to receive their service. Given that most of us are creatures of habit and routine, every time that routine is broken I believe you put your customer relationship at risk.

From the other internal customer standpoint, things work the same way. The longer people work together, the more familiar and comfortable things get. We really can build a strong enduring team as long as we do not get complacent and employ proper leadership and management techniques.

However, the rules change dramatically every time someone leaves or someone new is introduced to the team. Even if things do not get that dire, it is likely that morale will decline as people have to take on extra workload. If it goes on long enough you can rest assured that the external customers are going to see quality, service, and customer satisfaction decline.

Let us not forget about the bottom-line impact of internal customers. I have read all kinds of statistics that range as high as 25-times-salary for turnover of a key management position.While I cannot validate that number, I can point out that you will potentially incur recruiting costs, lost sales, overtime pay, and other costs as a result of employee turnover.

This has to add up to a minimum of three-times-salary. On the upside, think about the results accomplished by your most highly motivated employees, particularly with regard to attracting, servicing, and keeping internal and external customers. Keeping these individuals gives your business a tremendous competitive advantage.

Consider your internal organization as your best and most important customer and ask yourself the following questions: * What is my strategy for customer retention? * How well do we communicate "with" employees rather than "at" employees? * What is our interdepartmental strategy? * Does it take an act of Congress to get something done around here or are we fast on our feet? * How are we going to identify and nurture talent? * How do we create career opportunity even though we are a small business? * What types of leadership, management, and customer service development do you offer your people on an ongoing basis?The decision is up to you! Find and polish your gems today, or spend lots of your organization's valuable time and money salvaging and finding new internal and external customers.