Favor The Customer: Allow Empowered Employees to Create Profits

By: Multi-Unit Franchisee
Published: January 15th, 2014

Companies can make more money when they empower employees to make decisions that create over-happy customers, says John Tschohl, president of Service Quality Institute.

"Employee empowerment is defined as allowing employees to make fast decisions - on the spot - in favor of the customer. Empowerment is the single most difficult skill to get employees to utilize. That's a problem for businesses and government because if you don't have empowered employees, you will never be a service leader," says Tschohl, who is the author of Empowerment: A Way of Life.

"It is critically important for businesses to give employees the power to make decisions on the spot because one policy can't cover everything. There are too many weird things that happen every day. The best news is that most decisions will cost the company less than $50, which is a pittance when you consider the lifetime value of the customer and the good will that empowered decisions can make," says Tschohl.

"But employees are afraid to make empowered decisions on their own - regardless if the company actively supports empowerment," says Tschohl. There are three key reasons employees don't take initiative to solve problems:

1. They think they will lose their jobs. They think it is less risky to lose a customer than their job. After all, they think, "No one ever got fired for enforcing a policy, rule, or procedure."
2. They are afraid they will be penalized and have to pay for what they did. For example, if they upgraded a person from a room to a suite, they will have to pay the difference.
3. They don't want to get chewed out. There is very little upside for an employee who makes decisions. They don't get any pats on the back and there aren't any celebrations when they make a decision.

Companies need to adopt an employee empowerment plan.

1. To implement an employee empowerment plan, every top manager and department head needs to be on board. They must enforce a culture of empowerment and they must celebrate when employees make empowered decisions. It just takes one negative management feedback for the employee grapevine to get the message that the policy is just lip service or the policy du jour.
2. Train employees on empowerment. You have to teach them what is it, how to do it, and how we make a big deal about it.
3. Reinforce and celebrate empowerment. Most empowered decisions have no significant cost. For example, they might open the doors early to let in a customer. They can bend policies and procedures to fit a situation. In a restaurant, they can let the customer mix and match menu items.

"If employees knew their jobs were to create happy customers, the company will grow faster. By empowering employees, you can build market share and market dominance. You will have over-happy customers. And you will make more money," he says.

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