Your Customers Know If Your Employees Are Engaged – Why You Should Care

A few years ago, Market Basket experienced the kind of nightmare that very few companies ever see. A family feud between cousins ousted the CEO, Arthur T. Demoulas, who was loved by his employees. Many people in the Northeast remember the story. Market Basket employees loved Arthur, because he was known to remember employees’ birthdays and other milestones as well as attend weddings and funerals. Pretty amazing for a company with 25,000 employees. One article even compared him to George Bailey in “It’s a Wonderful Life”.

Engaged employees protesting on behalf of their company

Market Basket employee protester making a really important point. Source: Market Basket

Pictures of employees picketing outside of Market Basket stores ran in newspapers and online all over the Northeast, including the picture above, which appears on Market Basket’s own website. Stories of 10 and 20-year Market Basket veterans popped up everywhere, rallying to bring back their beloved leader. Over 5,000 people rallied at Market Basket headquarters over a two-day period. Why were the Market Basket employees so loyal to the company? Why were they so loyal to their leader? Why did these employees risk their own jobs to fight for their CEO?

How do companies like Market Basket survive such turmoil? When employees fight for the company because they love what it stands for, that is powerful. Does your company have those kinds of employees? Would your employees fight corporate raiders to save the company they believe in?

The Truth about Taking Care of Employees

The stories coming from Market Basket employees revealed a fundamental tenet about Market Basket’s priorities: the company took care of employees, shared profits, and their leader actually cared for people. In a nutshell, Market Basket had the kind of culture most companies dream of. It had the kind of culture that employees would strike to save. It also had the kind of leader that the employees would fight to get back. Would you employees do the same for you?

Private equity firms targeted Market Basket for a simple reason; it was a extremely successful business, as Arthur had grown sales from $3 billion to $4 billion during his tenure. Is there a link between culture, employee engagement and corporate performance?

At a high level, firms like The Hay Group have shown that companies with highly engaged employees vs. companies with low engagement levels enjoy 2.5x more revenue growth. Further, they found that 80% of the companies in their study agree that they need to find better ways to engage employees, yet only 25% were starting to drive change.

In addition, since 1998, companies that make Fortune’s100 Best Companies to Work For outperform major stock market indices, to the tune of 200%! These companies have figured out the secret sauce of employee engagement, corporate culture and overall company performance.

In spite of clear research showing that a good culture leads to company success, only 19% of companies believe they have the “right culture”, in there own eyes, according to Josh Bersin at Deloitte. What are the rest of us missing? Do we need more proof?

Engaged Employees Lead Companies to Outperform

Maybe you have seen some of the above metrics in the past. As it turns out, some companies have done additional research to find out why culture is so important. These companies, armed with new research, tell a story of how employee engagement is directly tied to customer satisfaction. We all know that happy customers breed loyal customers, which improves company performance.

“Your customers won’t love your company until your employees love it first.”   – Simon Sinek

DecisionWise ran a research study in the restaurant chain market. Over a one-year period, they looked at the direct impact of employee engagement on customer satisfaction. They discovered that “locations ranking in the top 10 percent in the company for levels of employee engagement experienced nearly 3X higher guest satisfaction ratings.” Further, “locations that experienced the greatest gains in employee engagement had nearly 4x growth in customer satisfaction scores.”

In addition, Best Buy found that higher employee engagement scores did lead to better store performance. The company found that for every 10th of a point it boosted employee engagement, its store saw a $100,000 increase in operating income annually, according to CFO Magazine (a finding so interesting that the article was re-run in the Harvard Business Review 3 years later). The research is clear: make your company a better place to work and you increase profits.

Anecdotal evidence and industry research shows that companies can improve customer satisfaction by improving employee engagement. Market Basket employees all but proved that highly engaged employees will go the extra mile for your company.

Are your employees engaged? Your customers can tell if they are. Can you?

Leave a Reply

Your email address will not be published. Required fields are marked *