An excerpt from
212° Service
by Mac Anderson

It’s like the chicken or the egg question… Who comes first if you want to achieve business success – your customers or your employees? Herb Kelleher, one of the founders and former CEO of Southwest Airlines – an industry leader in customer service, sheds some light on the answer:

“I always felt that our people came first. Some of the business schools regarded that as a conundrum. They would say: Which comes first, your people, your customers, or your shareholders? And I would say, it’s not a conundrum. Your people come first, and if you treat them right, they’ll treat the customers right, and the customers will come back, and that’ll make the shareholders happy.”

So what’s the first step?

Hire the Best People…and Treat Them Right!

Howard Schultz, Starbucks’ founder, understood that the key to the success of his then fledgling coffee business was to recruit well-educated people who were eager to communicate their passion for coffee. This, he felt, would be his competitive advantage in an industry where turnover was 300 percent a year. To hire the best people, he also knew he must be willing to pay them more than the going wage and offer health benefits that weren’t available elsewhere. He saw that part-time people made up two-thirds of his employee base, and no one in the restaurant industry offered benefits to part-timers.

Schultz went to work in an effort to sell his board of directors on increasing expenses while most restaurant executives in the 1980s were looking for ways to cut costs. Initially Starbucks was still losing money. But Schultz was persistent. He was looking long term and was committed to growing the business with passionate people. He won, and he said many times afterward that this decision was one of the most important decisions, if not the most important, that he had made at Starbucks. His employee retention rate was about five times the industry average, but more importantly, he could attract people with great attitudes who made their customers feel welcome and at home.

When hiring someone, start with the premise that attitudes are contagious. Then ask yourself one question…Is theirs worth catching?

I’ve been in business for over 30 years and I’ve come to realize the difference in success and failure is not how you look, not how you dress, not how much you’re educated, but
In my business life, I’ve watched many very intelligent people fail miserably because they have a negative attitude, and I’ve also observed just as many people with average intelligence soar to success because of positive attitudes.

Southwest Airlines’ VP of People is often asked the question, How do you get your people to be so nice? Her answer is always the same…
It sounds almost too simple to be important, but “hiring nice people” has been the cornerstone of their amazing success in a highly competitive industry. They understand their competitors may be able to match their price and copy their business model; however, they feel that the spirit and the attitude of their employees will be extremely difficult to replicate.