Episode 144: Connecting The Manager, Employee, and Customer Satisfaction Chain

The 90th Percentile: An Unconventional Leadership Podcast

Details

In this episode of The 90th Percentile, hosts BreAnne Okoren and Joe Folkman explore the powerful connection between leadership, employee engagement, and customer satisfaction. Drawing on research and real-world examples from companies like Sears and Zappos, they discuss how effective leadership drives employee engagement, which in turn boosts customer satisfaction and profitability. They also examine the critical role of culture, leadership development, and the difference between givers and takers in creating cohesive, high-performing teams. Tune in to discover actionable insights for fostering better leadership and ultimately delivering superior customer experiences.

Key Learnings

1. Leadership Directly Impacts Employee Engagement and Customer Satisfaction: Effective leadership is the most significant factor influencing employee engagement. Higher levels of manager effectiveness correlate with greater employee engagement, which subsequently leads to improved customer satisfaction.
2. The Employee-Customer-Profit Chain: Studies, like the one at Sears, show that increased employee engagement directly influences customer satisfaction, which in turn increases profitability. For example, a 5-point increase in employee engagement at Sears led to a 1.3% rise in customer satisfaction and $250 million in annual revenue growth.
3. Hiring for Cultural Fit Enhances Customer Service: Companies like Zappos have demonstrated that hiring employees who align with the company culture and empowering them to make decisions can significantly improve customer service. The Zappos model shows that great customer service stems from employees who are committed to the brand and its values.
4. Leadership and Employee Retention are Linked: Employees are far more likely to leave an organization if they work for ineffective leaders. For instance, nearly half of employees working under the least effective leaders were considering leaving, compared to only 15% under the most effective leaders. Leadership development is essential not just for employee engagement but also for reducing turnover.
5. Givers vs. Takers: Employees who act like givers—sharing knowledge, assisting others, and creating a supportive culture—tend to work in more cohesive, efficient, and profitable environments. This behavior improves not only internal relationships but also customer satisfaction, as these employees help build positive and productive cultures.

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Webinar

Zenger Folkman hosts an exclusive live webinar every month, where you can meet Jack Zenger and Joe Folkman and talk about their latest leadership development research. Find out more information and register here.

Research

Connecting The Manager, Employee, and Customer Satisfaction Chain– Forbes Article by Joe Folkman
In the Company of Givers and Takers– HBR article by Adam Grant
How Zappos Customer Service WOWs Customers to Win– Article by Sam Framton

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