Leading from the front

Leading from the front

The performance of frontline employees can have a crucial impact on the way customers perceive your brand. So how can you keep them at the top of their game?

  • min read


Leading from the front
At a Glance
  • Customer satisfaction surveys indicate a large gap between how well companies believe they are performing and how well they actually perform.
  • Superior performance only happens when frontline staff are motivated and equipped with the right tools.
  • Top management must provide leadership and communicate a clear message to motivate employees.
  • The corporate culture must genuinely enable and support employees to give the best possible service.

A telltale sign of any high-performance organisation is the engagement and focus of its frontline workers. These vital employees can build lifelong relationships with customers by delivering the right kind of experience through sales, service and delivery. In this sense, the "front line" also includes employees in the "back room"—the buyers at a retail company, for instance, who decide the next season's assortment of merchandise, as well as cashiers and sales staff. The frontline employees of manufacturers or other industrial companies, for example, can make or break the quality and cost of products, which hinge on factory-floor productivity. Whether the frontline staff face the customer or not, the same principles apply; a well-organised front line is a decisive factor in any company's success.

For many companies, the problem is not about recognising the front line's importance, but rather falling short on consistent, high-quality execution. A Bain & Company survey highlights this problem. In a survey of 362 companies, nearly 96 per cent of respondents recognised the importance of customer focus, and 80 per cent believed that they deliver a "superior experience" for customers. But these beliefs do not survive a simple reality check. A similar survey of customers found that only eight per cent of companies (across seven broad sectors and 47 industries) actually do deliver a superior experience in the eyes of the people who count. Closing this "delivery gap" between the 80 per cent of "believers" and the eight per cent of "achievers" depends partly on how the front line is organised and led.

The hallmark of a high-performance front line is the ability of staff to make good decisions and then execute them quickly and effectively. Frontline staff make critical decisions every day—"should I accept that return?" or "how can we get this shipment out on time?". They play a vital role in determining the success or failure of strategies devised in the boardroom.

Organisations that excel at frontline execution know how to motivate employees, even in positions that involve seemingly uninspiring tasks. They manage to foster a connection between the frontline employee and his or her job. It could be that the employee belongs to the company's target market segment and thus understands the kind of extra help that will benefit the customer. The result is a virtuous circle. Organisations benefit from the energy unleashed by this connection, while employees feel more motivated and fulfilled.

In our experience, confirmed through research and our analysis of a number of high-performing companies, there is no silver bullet to foster these connections between employees and their jobs. To create a front line capable of excelling at decision-making and execution, the best performing companies do five things well:

  • Set a clear vision to guide people on the front line.
  • Define clear roles and hold the people in them accountable.
  • Hire people with the right skills and attitude, and focus them on the measures that matter.
  • Provide the right tools, working practices and technology to help people excel at execution.
  • Instil a high-performance culture that motivates people at all levels to get things done and to strive for excellence.

Set a clear vision

How do you motivate a front line of thousands of people to work towards a common goal? A company's leaders need to set a strong, clear vision. The best leaders can express their vision for what it takes to succeed in the business, as well as "the way we do things around here", in a single breath. Michael Dell's two-word strategic principle—"Be direct"—sums it up for Dell's 55,000 global employees.

A strong vision must also be inspiring. It must paint a picture of success that motivates employees to become a part of it. Employees need to be able to relate personally to the company's vision in order to make it effective. ASDA, one of the UK's leading retail stores, has a mission to reduce the cost of the average housewife's weekly shopping, something that resonates with its employees.

A company's vision must be communicated constantly through as many channels as possible. This could include the CEO and top team speaking to frontline employees through broadcasts or newsletters, as they do at ASDA. It might also include top executives rolling up their sleeves and taking shifts on the front line. However, the people at the top can only be in so many places at once. A strong front line depends on leadership that is distributed throughout an entire organisation, within teams at every level of the company. As Sir Terry Leahy, CEO of grocery chain Tesco, has said, "We don't want one leader. We want thousands".

Take the example of one US-based restaurant chain. A new strategy to draw upmarket customers with a more innovative menu and higher price points had divided the leadership. Same-store sales lagged well behind the industry average and customer polls showed the plan was not working. Did they have the wrong strategy, or was it poor frontline execution?

In fact, both problems were in evidence. Disagreement and inconsistency at the top about the company's values and priorities had led to inconsistent execution and confusion throughout the company. The vision of an up-market dining experience was out of step with the company's history as a casual dining chain offering consistent fare at reasonable prices. Many employees knew this, and so did franchisees, who owned 70 per cent of the chain's restaurants.

To get back on track, the leadership team first had to agree that the new strategy was not right. The team then decided to build the next wave of growth around the company's original values: good food, friendly service and reasonable prices. However, they still had to win the support and enthusiasm of staff. But employees had lost confidence in the leaders. At an offsite meeting, the senior team listened to feedback from employee surveys, rating individual and collective leadership and the environment that had been created. The CEO remembers this as "the worst day in my life".

To help improve morale, managers agreed to base a percentage of their own compensation on employee feedback. They maintained the momentum by hiring people who bought into the new values. Crucially, the chain also supported those who decided to leave through a "no-fault separation" policy, which provided transition pay and assistance in finding a new job. With clear leadership and new direction, employee turnover declined. Same-store sales growth went from zero per cent to four per cent, well above the industry average in 2003. The share price has increased more than fourfold since 1999.

Define clear roles

In order to be effective, people need to know what they are expected to do, and to feel accountable for doing it. This sometimes means pushing decisionmaking authority out to the front line. At other times, it means clarifying that a role is restricted to execution. Despite the volumes written on "empowerment", there is no single right answer for defining frontline roles. Companies must think through what is right for their situation and employees. The key is identifying what we call "linchpin" employees. These are usually frontline supervisors, who provide coaching, direction and guidance. In a department store, for example, the linchpin is not the store manager but the manager of a depart ment; for a manufacturing firm, it might be the shift supervisor.

Take Timpson, a leader in shoe repairs and key-cutting in the UK. Over the past ten years, Timpson's revenues have increased fivefold to £98m in 2004 and profit has quadrupled to £4m. Employees' average earnings per week have increased 53 per cent over the period. In 2004, Timpson ranked second in the list of 50 best workplaces in the UK.

A large part of Timpson's success results from the clearly defined roles of its frontline staff. Chairman, CEO and owner John Timpson states: "The people who serve our customers run the business, everyone else is there to help." He has given everyone on the front line the authority to make decisions. For example, the Timpson price list is a "guide", with frontline employees empowered to set prices where they want and give discounts if they feel it is warranted. Every frontline employee has the authority to spend up to £500 to settle a complaint.

As a result, Timpson's frontline employees are very clear about their role and feel accountable. They have simple guidance from the top—"amaze our customers"—and they know the boundaries within which they can operate. Their incentive to use their authority wisely is reinforced by their share in the business' success through Timpson's uncapped weekly bonus scheme: the more they sell, the more they earn.

Timpson has also recognised the importance of linchpin employees. Area managers are encouraged to spend as much time as possible in stores to build their teams' skills. Timpson has also created wide salary bands to motivate people at every level. A high-performing branch manager can earn more than a district manager, and could even surpass an area manager.

Hire the right people

Getting the right people and ensuring they are all pulling in the same direction are critical to ensuring frontline success. This depends partly on the right recruiting strategy and people development processes. The rest comes down to measures and incentives for frontline staff. Neither is easy. Some frontline jobs are low-skilled and low-paid. Turnover is a perennial problem. Increasingly, companies are outsourcing some activities that used to be part of their own front line. But high-performance companies manage to address these challenges creatively.

Frontline leaders often hire for attitude as much as for skills. Timpson used to recruit shoe polishers and key cutters. However, John Timpson realised that not all "experts" came with the attitude required to amaze customers. He scrapped the traditional process and instead told his recruiters to "hire personalities". He designed a sheet of cartoon characters and told recruiters to tick whether candidates seemed to be "Mr Ambitious" and "Mr Friendly", or "Mr Scruffy" and "Mr Dishonest". Using this simple tool, Timpson recruiters began to build a front line that was outgoing and committed to success.

ASDA has also targeted its recruiting efforts, focusing on people who are gregarious and more likely to enjoy interacting with customers. ASDA executives talk about "auditioning" rather than "interviewing". They particularly value people who are more than 50 years old, called "Goldies" because they have celebrated their golden or 50th birthday. Older employees are more likely to deliver the type of customer service that the company is looking for; they match the demographic profile, interests and usually the values of ASDA's own core customers.

In addition to hiring the right people, frontline leaders also ensure those people are focused on the measures that matter and are paid in a way that reinforces desired behaviours. One of the keys is to ensure a balance between productivity and customer service. At eBay, for instance, customer feedback is weighted alongside productivity in creating employee performance reviews. eBay collects input through continual surveys and monthly workshops with buyers and sellers to ensure that customers' needs drive any department or business unit's efforts to boost productivity.

Provide the right tools

Outstanding frontline performance cannot be provided without the right tools and techniques. ASDA's success was built partly on its attention to this issue. After a move into higher-end supermarkets stalled, ASDA's leaders refocused the company on its core business: delivering value through low prices and a commitment to local customer needs. The new management team set the company's sights on rebuilding ASDA's market position as a low-price leader. They realised that outstanding frontline performance would be critical to the turnaround.

The leadership team initially dedicated significant time to communicating the company's new vision to all employees. They convened bi-monthly, company-wide meetings and used internal television, radio, newsletters, notice boards and an intranet to keep spreading the word. However, ASDA did not just communicate; it also equipped the front line to deliver. It collected best practices from around the company, documenting the most effective approaches from different stores. Stores were encouraged to innovate new ways of motivating the front line. One example is the "golden trolley", a piece of backroom equipment painted gold and reserved for the warehouse employee whose commitment to ASDA has been singled out.

The results have been impressive. ASDA moved from the brink of bankruptcy in the early nineties to one of the UK retail sector's best performers. Its market position as a provider of "everyday low prices" and its strong performance culture attracted the interest of another frontline leader, Wal-Mart, which acquired ASDA in 1999. This validated ASDA's operational excellence and strategy, particularly as Wal-Mart was eager to learn from its new UK business. Indeed, ASDA's recent response to the UK's challenging retail environment has been to reduce middle managers by 1,400 and hire more frontline staff.

Instil a high-performance culture

Many companies have "fun" cultures but relatively few manage to make their business objectives and their overall vision live and breathe through the thousands of employees on their front line. Great companies foster a passion for the business that encourages people to give their best.

Enterprise Rent-A-Car knows the value of a strong culture. The largest car rental agency in the US (it overtook Hertz in 1996), Enterprise leads the market for neighbourhood and off-airport rental cars. Its industry leadership was largely built by instilling the conviction that attention to customers' needs leads to success. "Put customers and employees first, and profit will take care of itself", declared the company's founder Jack Taylor, and subsequent Enterprise leaders have taught this philosophy throughout the company. Current CEO Andy Taylor and president Don Ross make a point of addressing classes of new managers on Saturday mornings. They relate examples of outstanding customer service to reinforce their message, like the story of one branch employee who accompanied the wife of a customer stricken by a heart attack to the hospital, staying with her for hours until relatives arrived.

Every employee in every branch is focused on the "Enterprise Service Quality index" (ESQi), which measures customer satisfaction on a five-point scale. These scores are the key variable in determining promotions. Thus everyone learns that he or she must take personal responsibility for turning customers into enthusiastic promoters of Enterprise. As the company explains, ESQi is "one of many ways in which we remind ourselves to put customer needs first".

Cultures such as this emerge in a crisis, when employees must think and act quickly without guidance from headquarters. Enterprise managers faced a dilemma in the aftermath of September 11, 2001, as travellers stranded by the shutdown of commercial flights in US airspace sought cars in order to return to their homes. Enterprise ordinarily does not do one-way rentals, as its neighbourhood branch system lacks the logistics. Many branch managers quickly decided to give customers the cars anyway and worry about getting them back later. Enterprise's culture has been vindicated. As it is privately owned, the company does not report profits, but worldwide revenues grew 32 per cent between 2000 and 2004, to $7.4bn.

Putting the best foot forward

Building a high-performance front line requires companies to do five things well: set a compelling vision; define clear roles; hire the right people; provide strong tools; and build a highperformance culture. This takes a system, not just a structure. For a company needing to turn around an underperforming front line, or one hoping to turn an adequate front line into a high performer, building such a system may seem daunting.

The first step is to identify where to start. A quick diagnostic of what works well and what needs improvement can often point to one major issue to tackle first. It is critical not to underestimate the change process. While it may be possible to analytically determine the right frontline structure or the appropriate balance between productivity and service in employee metrics, it is impossible to realise these goals without winning thousands of individual hearts and minds.

Companies that succeed in building a strong front line gain an enduring source of competitive advantage. When frontline people give time and energy to making the business succeed, competitors have a hard time keeping up.

Paul Rogers is a partner with Bain & Company in London and leader of Bain's global organisation practice. Jenny Davis-Peccoud is global manager of Bain's organisation practice. They are contributors to the book "What Managers Say, What Employees Hear: Connecting with Your Frontline (So They'll Connect with Customers)", published by Praeger in Spring 2006.


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