Why the Employer Brand Became More Important Than the Consumer Brand
Who would you rather work for?
- United Airlines or Southwest Airlines?
- Google or Yahoo?
- Vons/Safeway or Trader Joe’s?
Odds are high that you have identified the better employer with each example simply through word-of-mouth or direct customer experience. Or, you might be seriously interested in working for one of these organizations and have read employee feedback at Glass Door or Indeed.
The war for talent is back but it bears little resemblance to the war employers were having 12 years ago. According to Gallup’s latest global engagement survey, only 13% of the world’s workers are engaged. The real war is focused on attracting the 13%. Unfortunately, the world is also filled with disengaged CEOs who believe if their company provides a commodity, in other words, low prices, customer satisfaction and employee morale are the expected casualties. How much irritation will an airline customer absorb in order to get a cheap ticket? If a grocer is the only game for the next 3 miles, of course customers will put up with expired dates on food and Yelp reviews that include, “The employees need to be put on suicide watch.”
For every CEO that makes excuses for rotten cultures and irritated customers, we find another company occupying the same niche that makes the employee & customer experiences their #1 foundation for success. Time and time again, we can examine Southwest, Trader Joe’s or Google and find unique employer brands that clearly spell out the characteristics of the tribe, the people who will fit into that tribe, and the expectations in how the tribe responds to the customer’s needs and expectations. Great employer brands can be clearly articulated and followed. The best establish consistent behavior which leads to faith for the employees and the customers.
In the late 90s, an administrator in our company insisted that we convert from Apple to PC. Tears fell as she pulled my old Mac out of my trembling hands. For the first time, we had software crashses and viruses. But, the turning point happened when I reached out to customer service at Microsoft and tried to solve a problem so I could work through the weekend. Three hours and ten minutes later, I gave up. During that time, I had been transferred over and over. I was talked down to, instructed to go through the same ineffective procedures repetitively and questioned if I was following their directions.
Today, we are an Apple proud company. The hardware works almost all of the time. But, when there is a problem, I have faith that a smart, humble, respectful, and above all, effective employer will help us.
Why are employer brands more important than consumer brands?
Because employees fulfill the promise of the consumer brand. If a customer’s actual experience differs from the consumer brand’s promise, they will leave because the organization has lied to them. A few years ago, we reached a tipping point with transparency. Every single consumer is a journalist and judge. Every employee has the option of revealing the truth around their employment experience. In fact, a savvy candidate can learn more about the hiring manager than many of the people reporting to her or to him.
Once the word gets out, the premium talent runs when they hear your name. As CEO of Yahoo, Marissa Mayer, in a now legendary act of desperation, spent over a billion dollars acquiring smart start-ups. But, she wasn’t pursuing unique technology or access to new markets. She couldn’t get the premium talent required to turn Yahoo around. Think of it. When Stanford’s best graduates hit the market they might be thinking, “Google, Apple, or entrepreneurship?” But Yahoo? Some of the world’s better candidates would view a stint at Yahoo as a career killer. They envision a tribe of stagnant stakeholders that torpedo change and go out of their way to fly under the radar. One client indicated getting anything done there was a bit like trying to get fresh bread in Russia.
For Yahoo as well as other employers, the employer brand determines what an organization becomes.
Getting personal, there is a supermarket within 300 yards of our home in Pacific Palisades. We only visit it when we have an emergency, such as needing an ingredient to finish a meal. Yelp reviews give feedback like, “The employees in this store ought to be placed on suicide watch.” We have encountered cashiers that hold conversations with other cashiers without ever looking a customer in the eye! As a result, for every dollar we spend at this store, we spend 20 at another store, which is five miles away and is a bit more expensive.
The nearest Trader Joes is 10 miles from our home. We drive in once-a-month to get supplies. The average tenure of the company’s cashiers is twenty-one years. While their prices compete with commodity oriented stores, the customer experience is as good as any luxury brand. A few months ago, I misplaced a pair of sunglasses at the store. I visited the manager’s desk who greeted me warmly and asked for my number. That afternoon, he called rather joyously. “We have your sunglasses Mr. Harder.” In thanking him, I brought up how wonderful every single employee I’ve ever met at Trader’s is a world-class person. He responded, “Thank you. We love our people and we love our customers.”
If you can’t attract the best talent in your industry, you will never achieve category leadership. Your employees will actively or passively practice disengagement. Customers will have lower rather than higher expectations.
Today’s savvy CEOs will not tell human resources to “fix the engagement problem” or “improve the quality of candidates.” They will answer basic questions like, “Who do we want to be?” “When people think of our employees, what comes to mind?” “If we want to attract the best talent in this category, what kind of culture do we need to build?” Ultimately, they will do whatever it takes to attract and grow the best talent.
I’ve seen the patterns so many times that when a human resource client discusses a job offer, my first question is, “Has the CEO taken ownership of the culture?” If not, they probably ought to keep their bags packed. Why? The usual pattern is the CEO will tell human resources to fix the culture. The CHRO starts telling employees everything is about to improve. The workers look past his or her shoulder to the CEO and see business as usual. They shrug. An employee survey is issued. The results make the managers feel more inadequate than ever. They are sent to a leadership and come back filled with enthusiasm. The employees respond, “So what?” The human capital executive is shown the door for failing the culture. How many of you have witnessed this sacrificial ritual?
Employer brands are not perfect. However, they are honest. For years, The Walt Disney Company generated mixed feedback in the talent market. When we designed new leadership programs for the company, I had the privilege of working with some of their best and brightest from all over the world. In the midst of a program, one executive asked, “What do you believe is Disney’s employer brand?” I thought about it for a moment and responded, “The employer brand is to attract the talent that creates magic at great profit in the midst of chaos.”
The room went silent for a moment, followed by a few gasps of recognition and then broke out into laughter. For someone who loves creating magic at great profit in chaos, they will fall in love with Disney and stay for years. If they don’t, they will find the environment insufferable.
This past year, United Airlines reminded millions of consumers of the cynicism and contempt that permeates their culture. Lost and dead pets, customers dragged out of their planes, unruly environments, and damaged baggage. Today, many travelers will only board a UA flight is there is no alternative. The company doesn’t have an equipment problem, it has a talent problem. But, one CEO after another places cost-cutting ahead of customer experience and employer brand. The results speak for themselves. Flight attendants ask pilots to raise the temperature in the cabin so more people will pass-out. Pilots purposely delay landings in order to get a bit of overtime without hitting the mark that produces a report with the FAA.
Uber might have been one of the country’s most successful start-ups in many years. But, their contempt towards female employees and drivers has led to perhaps the first time in business history where consumers are mindfully selecting Lyft because its spiritual and moral principles are superior. That said, Uber appears to be in a tremendous and costly drive to build a culture of high performance and integrity.
Bottom-line? There are no shortcuts in building a great organization. In the end, people will sustain your success. The best talent will make you a category leader.
Why has the employer brand become more important than the consumer brand?
- The consumer brand is what we sell.
- The employer brand is what we become.
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