Page 61 - 100 Great Business Ideas: From Leading Companies Around the World (100 Great Ideas)

24 THE EMPLOYEE–
CUSTOMER–PROFIT
CHAIN

Sears provides one of the best examples of employee practices
connecting directly with organizational performance. The
employee–customer–profit chain (a variation on the service profit
chain) makes explicit the links between cause and effect. By
enabling employees to see the implications of their actions, it can
change the way people think and the results they achieve.

The idea

Traditionally, managers focus on results. However, this data is
historical. What is really required for market leadership is an
emphasis on managing value drivers (the aspects of the business
that make the greatest difference and provide most benefit to
customers). Of these value drivers, employee retention, employee
satisfaction, and employee productivity significantly affect customer
satisfaction, revenue growth, and profitability. This is highlighted
in the diagram of the service profit chain opposite.

In the early 1990s, senior executives at American retailer Sears
realized that future performance was not going to improve simply
by developing a different strategy or adjusting marketing plans.
Following significant losses, executives focused on three issues:

• How employees felt about working at Sears.
• How employee behavior affected customers’ shopping

experience.

54 • 100 GREAT BUSINESS IDEAS