Managing as though employees really mattered

by Miel Feria, SERDEF Media Bureau

(first published in the Philippine Daily Inquirer, Sunday Biz, Sept. 23, 2012)

There have been countless articles on how to make companies more productive. The science of efficiency has been thoroughly discussed and preached, with objective maximization usually the main focus.

With the common practice of profit maximization through minimization of unit cost and/or increase in product price, historically, customer satisfaction was not taken into consideration in production. Customer satisfaction was not the end-all of businesses. Through the years, though, we have seen a gradual shift from the principle of efficiency and the pursuit of objective maximization to a more customer-centric approach in business. Placing a premium on the importance of customer satisfaction has slowly gained ground.

But this transition to a more customer-friendly organization does not happen overnight. The change must come from the leaders in the organization. The leadership must be able to empower their employees and make them believers in their vision for the organization.  They should be able to lead by example, and inspire their employees to achieve a common goal.

In the recently-concluded Competitive Entrepreneurial Leadership Conference organized by the UP Institute for Small-Scale Industries (UP ISSI) and the Small Enterprises Research and Development Foundation (Serdef), a number of speakers underscored the importance of taking the needs of employees into consideration in the quest for customer satisfaction.

In her talk on Customer Social Responsibility, Prof. Virginia Yap, Vice Chancellor for Administration of the University of the Philippines Diliman, says that the first step to a more customer-centric organization is providing service and support to the employees of the organization.

Talking about ways of tackling Customer Social Responsibility, Yap stresses that “the levels of customer service provided by an organization are directly dependent on the strength of the organization’s internal leadership and its ability to foster a culture of customer service and gain commitment to the culture throughout the entire organization.”

The compassion shown by the organization’s internal leadership toward its employees is often reciprocated by loyalty and dedication. When employees don’t feel alienated from their work, they feel a sense of belonging. Identifying their product as their own, they feel the need to make their work the best it can be and are personally driven to do better.

Such is the case of Betis Crafts, a furniture export business based in Guagua, Pampanga. Betis Crafts started as a backyard business producing wooden handicrafts that blossomed into one of the premier furniture exporting companies in the country.

In her own talk at the UP ISSI-Serdef forum,  Myrna Bituin who owns Betis Crafts attributes her company’s success to the high level of commitment and dedication of its employees. She says this was primarily due to the importance given to workers. Seeing employees as partners and not merely as cogs in the production engine enabled Betis Crafts to mold its employees into a team that, in turn, took its commitment to the company to heart.

“We connected with our employees in a human moment. We considered them as our great resource and it made a difference,” she shared during her talk.

She said management made it a point to attend to employees’ basic needs. Recognizing and addressing employees’ concerns freed the workers from personal worries and allowed them to concentrate more on their jobs.

Betis Crafts implemented several projects that benefited its employees. It encouraged them to plant vegetables and raise farm animals to supplement their income. It also provided housing, additional health benefits for supervisors and managers, and scholarships for deserving children of employees.

The company also set up a cooperative for its workers that focused mainly on re-lending and operation of a cooperative store which grew from an initial seed capital of P10,000 to resources amounting to 4 million pesos today. It also encouraged and supported employees with entrepreneurial inclination to set up their own shop. Some of these former employees eventually became subcontractors as the company grew.

The company’s devotion to their human resources was reciprocated with employees totally devoted to their work. Children who were scholars thought of a way to give back to the company. In listening to and addressing the needs of their employees, Betis Crafts was able to enjoy employees’ dedication, even when these employees have struck out on their own.

Tita Datu Puangco, president and chief executive officer of Arcilla Enterprise Development Consulting Company who also spoke at the forum, says a leader who is able to mobilize hearts, wills, energies and efforts of people for a single purpose is revered and cherished. Efficiency and achievements are easily forgotten whenever there is disunity and discord. Only in making everyone a believer in the organization’s goals can a company truly prosper.

Puangco compares an organization to a mosaic:  “The leader is part of the mosaic, a leader among leaders who has to purposively align his or her functions with those of other leaders.”  Nothing is more self-defeating, she says, than a leader who pursues an independent track without regard to the goals of others in the organization.

After all, the quality of the product or service delivered depends on the people delivering them. It is the ability of the leader to foster a culture of customer service and to foster unity of vision within the company that would make it a reality and this can only be achieved, according to Prof. Yap, by starting “at home.”

In the end, although maximization of production and minimization of cost may be the most efficient way to achieve business success, the longevity of the business depends on the level of commitment the employees feel toward the organization and vice versa. As in the case of Betis Crafts, longevity and success was achieved through leadership with a heart.

Both Yap and Puangco are graduates of the UP ISSI-Serdef’s Managers Course for Small-Scale Industries, which is sometimes dubbed as a mini-MBA.  On the other hand, Bituin’s Betis Crafts was a client in an in-factory extension program for export-oriented manufacturers by the Department of Science and Technology, UP ISSI and Serdef.

(The author is with the Serdef Media Bureau. The Small Enterprises Research and Development Foundation—Serdef—is a resource hub for micro, small and medium enterprises in partnership with UP Institute of Small Scale Industries.  For more how to start and how to grow in business features, visit the Serdef website at www.serdef.org.)

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