Do Happy Employees = Happy Customers? No!

Common wisdom suggests that there is a direct correlation between employee and customer satisfaction. Common wisdom, of course, is often flawed. Just ask a couple of my favorite business authors, Dan Ariely (Predictably Irrational) and Steven Levitt (Freakonomics). Sometimes the things that we believe to be true, simply aren’t.

A few years ago an article in the Harvard Business Review by Rosa Chun, a professor of business ethics and corporate social responsibility and Gary Davies, a professor of corporate reputation at Manchester Business School in the UK, disputed this conventional wisdom. And, of course, their position drew an immediate and strong response. I covered the story and its response for a couple of business publications at the time and found the whole issue to be fascinating.

In reality, the issue is far more complex than the simple, assumed, link between “happy employees” and “happy customers.” Because the concept of “happy employees” is just one variable that ultimately impacts customer satisfaction.  Certainly satisfaction, commonly referred to these days as “engagement,” is important for organizations. However, engagement without alignment around the organization’s mission, vision, values and goals will not yield desired results. It’s not just about satisfaction, said the experts I talked to – it’s about process and people. Satisfied employees alone are not enough.

As Russ Eisenstat, a co-author of The Critical Path to Corporate Renewal(Harvard Business School Press, 1990) told me:

“A lot more needs to be aligned than just satisfying the people who work on the front lines. They also need the tools in order to be able to meet customer needs, the quality of the product and service offering needs to be effective, and the internal processes need to be aligned in a way that allows them to deliver their best.”

In short, it’s complicated.

Yes, businesses are wise to engage their employees. But, they’re also wise to recognize that engaged employees are just one piece of an increasingly complex process that ultimately delivers value to customers.

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