Employee Centric Or Consumer Centric?
I came across this tweet by Hunter Walk today. He shared a NYT profile piece on Managed by Q, a portfolio company of his and Satya Patel’s VC firm Homebrew.
The mindset of the founder of Managed by Q reminded me of my deep admiration for Seth Sternberg, the CEO of Honor, who wrote this piece explaining a big move he made for taking care of his employees.
This finally pushed me to write this piece that I have been meaning to write for a while now.
I am a big fan of brands that are user-centric and not number-centric. There will be no numbers for growth, revenue or profits to think or worry about if you don’t take care of your consumers. Now, this may not necessarily be true for legacy companies that already have massive user-base and distribution systems in place. They like to think that they can away by focusing solely on numbers. And this thought process is exactly what opens up room for startups especially when consumers have started valuing the experience more than the product itself.
Amidst all this, I think there is one section of people that both behemoths and startups tend to ignore or not pay much attention to. I am talking about the employees who work hard to get the greedy employers the numbers that they are shooting for and to provide the best customer experience for the startup founders who are engrossed in serving their users.
I think employees need to be treated at least as nicely as one would treat the consumers. Employees are the most important assets to any company of any size and scale. They are also the most undervalued assets at most companies. Employees are the folks that work relentlessly to help the founders or the management teams accomplish their goals. Without them, there is no product or experience. Without them, there is no business.
Most employers think that short term losses in employees’ welfare are not worth paying much attention to as long as such losses result in long term betterment in customer relationships. Yes, there is not business without users. Yes, a business should do everything it can to serve its users. But, does the user welfare need to come at the cost of employees’ welfare? For instance, exploiting employees by paying them lower wages helps a company serve its customers at a lower cost. From a strictly customer-centric mindset, this seems like a good strategy. And, in this mindset, employers tend to think that employees are easily replaceable assets. But, that is true only in the short term. In the long run, most of these employees are going to face financial struggles. This is going to force them to decide between being loyal to you and paying bills for their families. Guess what are they likely to decide? There is no reason for them to stick with you when things get even a little difficult because you did not treat them well in the first place. Is it really worthwhile when you factor in the hiring and training costs that go into replacing the workforce?
Now, imagine a scenario where you compensate the employees more than your counterparts. Yes, your short term numbers will take a hit. But, the long terms benefits in terms of increased productivity and loyalty against those short terms hits are likely to be disproportionately higher.
So, the numbers will work out in the long term. All we need to do short term is be human in our decision making processes. Take care of customers *and* employees. We shouldn't choose between being consumer-centric and employee-centric. Both are equally important. What we should consciously choose is not to boil people down to numbers.
