Volume 47, Issue 3 - April 2008
In the news
by Jeff Johnson, first vice president of the Association of Millwork Distributors (AMD) and president of Western Pacific Building Materials in Portland, Ore. Mr. Johnsonís opinions are solely his own and do not necessarily reflect those of this magazine.
The Golden Rule
Happy Employees Are Key in 2008
I have been in the door and millwork industry for 23 years. The last 12 years I have devoted a great deal of time to building a national network of industry and non-industry companies to benchmark Western Pacificís own performance. I know the door and millwork industry demands high service and is a labor-intensive business; therefore, part of my analysis has been focused on ways to manage labor expenses. It has been traditional management thinking that reducing wages and benefits improves your bottom line and creates a strong return on investment.
Time to Ask
I donít think enough business owners or managers ask themselves if their companies could be more successful if they focused on creating an environment that builds happy employees rather than focusing on ways to cut costs to drive their bottom lines. Should we spend more time during this difficult year focused on the people who enter orders, build doors, pull millwork and unload our trucks rather than looking at ways to cut expenses? Creating a motivated work force is difficult to quantify, but it should be part of your management plan.
It seems obvious that treating employees as you would like to be treated, and paying a fair wage goes a long way to building an efficient and involved organization. Most of the managers I talk to say they believe in this style of management but, it seems, when times get tough, several companies cut to the bottom line and donít live up to the concept.
This is surprising because the door and millwork company that goes the extra mile to create a strong employee environment often sees tangible effects in lower employee turnover, reduced errors and fewer training costs. To me, the most important effect of this type of environment is a greater level of customer service, which creates a strong competitive advantage in your marketplace.
Learn from Starbuckís
Several mornings each week I walk into the Starbucks store down the street from our warehouse. I am always amazed at the great level of customer service I receive. Howard Schultz, the founder of Starbucks, has created a great example of treating his employees with a high level of respect. Employees who work 20 hours a week or more receive full health care benefits and later may be granted the opportunity to receive stock options. The reward for Starbucks is happy employees, one of the lowest turnover rates of their industry and a line every morning at their counters. Their cheerful employees and strong customer service create an addictive environment. To see tangible results of this type of employee-focused atmosphere, take a look at the companyís sales growth, profit and share price increase since its IPO in 1992.
Treating employees as you would like to be treated and with respect is certainly not the only reason a company like Starbucks has thrived and outperformed against its competition. The companyís purchasing power, consistent products and skilled management also have a large impact. As we begin a difficult year in 2008, owners and managers should look further than cost-cutting and make sure they are creating an environment which gets the very most out of their employees to create a positive customer experience.
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