Recently, J.D. Power and Associates recognized various companies for ranking highest in customer satisfaction in their respective industries.  For two years running, one young and growing company has dominated the specialty coffee retailer industry in levels of customer satisfaction: Dutch Bros. Coffee.

For two years, Dutch Bros. Coffee has outshined industry giants (here’s lookin’ at you, Starbucks—we don’t want to pay $7.00 for a latté made by a surly barista anymore).  On its About Us page, Dutch Bros. Coffee relates how it “has always focused more on people than the bottom line, with a desire to transform lives rather than conduct transactions” (emphasis added).  The company has clearly lived up to this claim—some customers’ lives have been so transformed that they’ve opted to hold their wedding ceremony and reception at a Dutch Bros. location.

Employee Engagement and Customer Experience

Clearly, focusing on people is effective—Dutch Bros. has grown from a single push-cart coffee stand to a franchising company with nearly 200 locations in 7 U.S. states in just 21 years.  To the competition, Dutch Bros.’ success is staggering.

“Our customers are the best, man, and so are our bro-istas,” says company co-founder Travis Boersma. “They rip and they rock, and it’s all about the people.”
“Staff friendliness and positive interaction with the customer are keys to achieving high levels of satisfaction,” said Sally Lombardo, director of research operations at J.D. Power and Associates. “A specialty coffee retailer whose staff learns to master these skills may not only achieve high customer satisfaction, but also benefit from positive recommendations, customer loyalty and attachment to the brand.”

As humans, we’re usually friendlier when we’re happier—right?  (Maybe all Dutch Bros. employees are so happy because they have a seemingly unlimited access to delicious, caffeinated, “liquid love.”)

From a human-resources standpoint, happiness and engagement are closely related—ignoring the positive emotional-effects of coffee.  Perhaps, then, the lesson we should all learn from Dutch Bros.’ success is that a people-centric company culture is what drives success.  It probably wouldn’t hurt to give your employees an energy-boost, too.

Our extensive research and experience in the customer-service industry confirms that when companies focus on the people aspect of business they see positive results in profitability, competitive advantage, and growth.  Remember, engaged employees lead to happy customers—and customers ultimately decide which businesses succeed and which businesses fail.  So, what other companies are focusing on transforming the lives of their employees to drive success and break records?  What are some people-centric tactics organizations should employ?

As I type this blog, I am gazing out the window of my home office at the beautiful snow-covered mountains of Utah. Not day-dreaming, really. Thinking.

It’s certainly a better view than looking across the busy street I see from my regular office. I try to work from home at least once a week. I find it allows me to focus on those things I can’t necessarily accomplish at the office—writing being one of these. Even when I set aside blocks of time at the office, I am regularly interrupted by emails, urgent phone calls, and the familiar, “hey, boss, do you have two minutes?” I love my team, but multiply those interruptions by 30 and a day goes by fairly quickly without much getting crossed off my “important-but-not-urgent” list.

Working from home once in a while is critical to my role. For hundreds of workers at Yahoo!—affectionately known as Yahoos!—that remote work option has just changed. They have just learned that the days of working from home are over, at least if they want to remain employed at Yahoo! after June.

CEO Marissa Mayer has done a lot to focus on the struggling company’s dearth of employee engagement. She has revamped the organization structure, and has worked hard to improve the employee experience through such actions as providing employees with smartphones and bringing in free food. But, remember, this is the same CEO that told reporters, “My maternity leave will be a few weeks long, and I’ll work throughout it.” According to CNN, Mayer issued a company-wide memo through HR dictating that the 800-1,000 Yahoos! currently working from home would need to relocate to the office if they wished to remain employed. Ouch!

I’ll admit, even though I managed to shower and dress for the day, the likelihood of me running a razor across my face today is about nil. Why bother? The kids won’t even be home from school until after 3, and they could care less about whether dad maintains a personal appearance conducive to a professional working environment. So what must be going through the heads of hundreds of Yahoos! that are accustomed to working remotely?

For many Yahoos!, the difference to date between casual Fridays and any other day of the week has been whether or not to include underwear with the daily sweatpants ensemble. Working from home brings with it the obvious advantages of no commute, a more comfortable environment, and the ability to be home when the salsa-of-the-month-club package shows up at the doorstep (thanks, DecisionWise team—still loving the Christmas gift!).

Numerous articles also extol the business virtues of remote employees: reduced costs, higher levels of productivity, and increased engagement and dedication, to name a few. However, other studies point out the obvious opposite side of the equation: personal distractions, difficulty to manage, distrust, and lack of social connection.

Regarding the last point—social connection…
Citing improved communication and collaboration as key reasons for the change, Mayer announced that in order for Yahoo! to be one of the best places to work, employees had to be in close proximity of one another. While some would argue these points (especially those that have enjoyed the benefits of distance), there is a lot to be said about social interaction that cannot necessarily be achieved through email, telephone, or video conferencing.

Last week I participated in two-day leadership development session with a stellar team of individuals. One constant theme was the plea, from those working remotely, to “PLEASE” include them in communication and important information. While very professional, and certainly hard working, these offsite individuals were not feeling that connection so necessary to engagement.

As we review those factors that contribute to engagement—Meaning, Autonomy, Growth, Impact, and Connection—we clearly see that a feeling that one belongs to a greater community (i.e., work team, department, organization, company, etc.) helps us to be more engaged in the work we do. We more clearly recognize our part in the greater whole. Some may claim to have the ability to maintain this connection while working remotely, but common sense tells us that communication and collaboration is about much more than a few emails and a weekly conference call. Working remotely, I may miss this important factor, regardless of my work ethic.

Remote employees often report feeling disconnected from the organization. I first learned this nearly two decades ago when the idea of eLearning first took off. The premise was great—one could learn from his/her own desktop without wasting valuable time in the classroom. Great idea, but it was found by many that much of what an individual learned didn’t come from the training CD, but from the valuable face-to-face exchange between coworkers. Computer-based training was taking away that learning opportunity. Applying this to remote workers, we see that there is true value in those face-to-face connections that cannot be relegated to electronic instant messages.
So, get back to work, Yahoos! According to your CEO, you will more productive. Wait—I am the CEO. Maybe that’s why my employees are asking to work from home.

I recently had the opportunity of listening in on an excellent HBR Ideacast: The High Cost of Rudeness at Work. Naturally, a company cannot expect to achieve employee engagement if its most-senior leaders follow inappropriate practices of people management. I don’t want to take that path with this blog, though. Rather, I want to take the path that the Ideacast touches on: customers cannot tolerate rudeness or incivility with the least degree of allowance, even when it’s not directed at them.

Many of our clients operate in the fast-paced and demanding customer-service industry. These companies are constantly looking for ways to improve customer satisfaction, often concluding that their “front-line employees are the root of the problem.” Could it be that these customer-facing members of the company comprise only the tip of the iceberg contributing to engagement problems? After all, the apple doesn’t fall far from the tree.

The Impact of Employee Engagement on Customer Satisfaction

Before joining the DecisionWise team, I had the opportunity to work in a variety of customer-facing positions. At one point, I was in charge of local training initiatives for an international food-service chain. In this position, I noticed a few trends:

1. 1. Customers love when companies treat employees well. At the locations I frequented, our team members had been taught to have fun with their jobs—while maintaining an extremely high standard of customer service. If you were to enter one of our locations, finding the crew singing along to a new song on the radio would not be surprising. Many customers would comment on how they enjoyed coming to our stores and how much fun we all seemed to have. By allowing employees to have fun, the company was able to build more rapport with customers—the company was able to engage its employees.
   2. Employees love to be treated well. Employees should be treated well from all directions—from customers and management alike. As some of the commenters on our recent blog on the Fortune 100 Best Companies rightly noted, the best companies show respect to their employees. Like was mentioned above, when customers witness companies demonstrating respect for employees, those companies establish stronger bonds of customer loyalty.
   3. Management attitude affects the bottom-line. Blaming the declining sales figures on frontline employees isn’t fair; most of these employees (save the most proactive, who will quickly leave if they’re being treated poorly) simply inherit behaviors that Management models. Perhaps that’s why Forbes recommends that leaders model the behaviors they seek.

I’ll be the first to admit that I learned the above lessons through a process of trial and error. Looking back, I appreciate the knowledge I gained from that experience in the food-service industry, as it continues to apply to everything I do—both in and out of the office. Respect your customer-facing employees and they will respect you; so will your customers.

Perhaps you don’t work in the food-service industry. How do you think respecting employees affects your company? Do you have an experience when you visited a company and were shocked by how its employees were being treated? Or, more optimistically, have you ever been amazed by the level of respect employees received at a company? Share your stories with us in the comments.