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PHIL HARDWICK: Which should a business value most: employees, stockholders, customers or products/services?

PHIL HARDWICK

PHIL HARDWICK

If  you, a business owner, had to choose, which of the following would you place more emphasis on: Employees, stockholders/investors, customers or products/services? It’s tempting to say that all are equally important. But what if I told you that those companies that value employees more are more successful? At least, that is what the evidence suggests.

From 1997 – 2013 stock in Fortune magazine’s “100 Best Companies to Work For” outperformed the S & P 500 and the Russell 3000 indices. During that period the S & P 500 was up 6.4 percent, The Russell 3000 was up 6.41 percent and the Fortune 100 “Best Companies to Work For” was up 11.8 percent. Thirteen of the companies have made the list every year since Fortune began publishing it in 1998.

Whole Foods Market, which opened a store in Jackson last year has made the list every year. John Mackey, Whole Foods CEO, says that employees want meaning and to be a part of a team.

More research on this subject was done by Glassdoor, a recruiting company that among other things allows employees to rate their own companies on the Glassdoor website. As of this writing there are over six million company reviews. Glassdoor Research conducted several studies and found that public companies on the Glassdoor list and the Fortune list outperformed the market as mentioned above and that companies rated low on the Glassdoor list significantly underperformed the market.

Before going further it must be pointed out that employees, investors, customers and products/services are all important. Overemphasizing one factor and neglecting another will result in business failure in the long run. Nevertheless, there are companies that are very successful in stressing one factor over another. For example, an article in the April 27, 2015 Wall Street Journal entitled “Pharmaceutical Companies Buy Rivals’ Drugs, Then Jack Up the Prices” contained a contained a comment by a Valuent Pharmaceuticals International spokesperson who is quoted as saying, “Our duty is to our shareholders and to maximize the value of the products that Valeant sells.” That strategy is obviously working for that company because its stock has gone from under $75 to over $200 during the past two years.

So what are the best ways for a business to value employees? To learn that we turn to the Society for Human Resource Management 2012 Employee Job Satisfaction and Engagement Research Report. It revealed that the top five contributors to employee job satisfaction in 2012 are as follows:

» Opportunities to use skills and abilities;

» Job security;

» Compensation/pay;

» Communication between employees and senior management; and

» Relationship with immediate supervisor.

And then there is some local anecdotal research by one of Mississippi’s most successful businesspersons. Jeff Good is co-owner of Sal & Mookies, a Jackson restaurant opened in 1997. Sal & Mookies second location just opened in Biloxi. Good also is co-owner of two other restaurants and a catering company. He was named 1998 Restaurateur of the Year for the state of Mississippi and was honored as one of Mississippi’s “Top 40 Businesspeople under 40” by the Mississippi Business Journal. He is well-known as a business person who values employees. When he opened Sal & Mookies in Biloxi recently he and his management team asked 50 new employees why they left their former jobs and what they have disdained about former workplaces. Here are 16 of the things that are representative of what they said:

» Not Family Oriented

» Rude

» Trust

» Lack of training

» Lack of discipline

» Short staffed

» Bad attitudes

» Disappearing Management

» Not appreciated

» No support

» Poor communication

» Lack of Management

» Poor organization

» Expectations

» Empty Promises

» Lack of teamwork

In conclusion, the most successful businesses place a high emphasis on valuing employees. The above examples can serve as a guide as to what employees want and do not want from their employers.

» Phil Hardwick is a regular Mississippi Business Journal columnist and owner of Hardwick & Associates, LLC, which provides strategic planning facilitation and leadership training services. His email is phil@philhardwick. com and he’s on the web at www.philhardwick.com.

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