Who Is the Customer?

This is a question that has been asked in business since there were any businesses. It is obvious that the people who pay the way and the financial shareholders have to be happy to have the business do well. But are they the most important to keep a business going strong? Let us take a look at a couple of organizations. The first one is in the airline industry. Have you ever flown? How do you feel about each airline? In college and when I worked for Hewlett Packard, I usually flew on United or Continental (because that is with whom HP had contracts). In Guam, I enjoyed Pan Am and Continental Air Micronesia. On personal business, I almost always took Frontier Airlines. Unfortunately, they have changed with regard to service to customers and the happiness of employees. I now take Southwest, whenever possible. The reason is because of their service. There are some aspects of the “cattle” loading I do not like, but the people are all great. Could that come from the ideals of the Southwest CEO? There is a fascinating article in Forbes entitled Employee-First Approach is Key to Customer Service Success Herb Kelleher, of Southwest Airlines, stated: “Years ago, business gurus used to apply the business school conundrum to me: ‘Who comes first? Your shareholders, your employees, or your customers?’ I said, ‘Well, that’s easy,’ but my response was heresy at that time. I said employees come first and if employees are treated right, they treat the outside world right, the outside world uses the company’s product again, and that makes the shareholders happy. That really is the way that it works, and it’s not a conundrum at all.”

I remember several conversations I had with Rulon Stacey, who was CEO at Poudre Valley Hospital, about how he turned around Poudre Valley Hospital. It seemed that the previous CEOs turned over quickly until Dr. Stacey brought in a new Philosophy. It is best to put it in his own words.

One of Dr. Stacey’s inspirations was the philosophy of Malcolm Baldrige. He researched the Malcolm Baldrige National Quality Award and submitted the application for 2008. Poudre Valley Hospital won the award that year. Rulon would be the first to admit that it was a team effort to win the award, work by all members of the hospital at all levels. The Malcolm Baldrige Award is a very prestigious award that is awarded to health care organizations, educational institutions, and businesses. It is something that all should strive to attain.

As was shown by Southwest Airlines and Poudre Valley Hospital, companies who treat their employees well thrive. Good employees will go out of their way to help customers, which in turn will help the entire organization.