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Monday, April 6, 2009

A snapshot view of how Asia's best employers deal with economic down turns.

This is a snap shot analysis of how Asia's best employers deal with the economic down turns:
many of the best employers in Hewitt's survey see the global economic crisis as an opportunity to cement their relationship with their staff, train employees and woo key people from competitors.
According to the survey many are adopting the "Employee first, Customer Second" method:

Forward-looking companies across the region are adopting that business model. HCL Technologies, an IT outsourcing firm based in Noida, India, and a top 25 Hewitt winner, adopted a new vision statement called "Employee First, Customer Second" in 2006.

The idea: by empowering employees and giving them any tools they need to help customers, the business will thrive.
This is very same model used successfully by Southwest Airline, USA that came through 9/11 attacks financially intact with no layoff of any staff. This is how the former CEO James F. Parker explains it in his book, page 168:
At Southwest, we were sometimes asked who we sought to serve first - employees, customers or shareholders. We always said employees come first. We knew the way we treated our employees would determine their attitude towards our company. We knew that if we served our employees well, they would serve our customers well. And if our customers were happy, it was pretty likely the shareholders would be happy too.
That all pretty good sense to me sadly too many companies fail to see this simple rule.

[1] "Do The Right Thing - how dedicated employees create loyal customers and large profits" by James F. Parker, Wharton School Publishing, 2008.


Zijian said...

According to the "book", a CEO / manager should just cut costs, and the easiest way is to cut people, and then the accounting figures will look good. And not surprisingly, most managers did. When running a company, they saw nothing but costs and revenues only.

Will the wisdom of these best employers spread through industries?

L. Mar said...


The "book" does not contain one line of advice of such. Let me provide some more quote from the book to demonstrate how Southwest works.

This is what James and the Southwest view on their employees:
A lot of companies say their employees are their most important asset, but they don't really mean it. The truth is, they treat employees as depreciable assets, to be used up and then discarded. This is the root cause of the culture of conflict that infects many major corporations today.

I will give you a specific example happened in Southwest that distinguished them so sharply from others in the event of 9/11:
At the Southwest, we made a different decision. With the full support of our board of directors and the leadership of the chairman of our board, Herb Kelleher, we decided that Southwest would not lay off employees. We would not ground any of our airplanes. We would not cut the pay of our employees. And we would pay the $179.8 million to our employees' profit-sharing plan on time, on September 14, the same day our planes were allowed to return to the skies.
The only people who took a pay cut at Southwest Airlines were the company's officers, who we allowed to take a voluntary 10 percent pay reduction if they chose.

Guess what their competitors did and it is also interesting to see their financial performance following this event.
The reason why they do this is because their company followed and supported by a very simple principle:
When in doubt, just do the right thing.
The book concludes with an advice that many so called CEO/Leaders at various levels should follow:
Leaders who are trustworthy will be trusted. Leaders who treat employees with respect will likely be respected. Employees with love their company if it loves them back.
Many in development world is also skeptical with many documented quality development processes or methodologies. Their skepticism is understandable in many cases, according to research done by Steve McConnell.
The reason is not that they do not work or fail to produce respectable ROI but because only about 1/3 of the software company use these processes as the guiding principle rather than as lip services that is discarded the minute they hit rough spots. As a result 2/3 of managers have never been evangelized with the proper principle. In brief, they are a phony!

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