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FOUND WISDOM

Can today’s startups be as employee-obsessed as they are customer-obsessed?

Rick DeLucco
Customers have needs. Employees do, too.
By Jaime Schmidt

Founder, author

Reporter Zoe Schiffer’s account of the work environment at Away, published Dec. 5 in The Verge, brought shock to many readers, who discovered the trendy luggage company had fostered cultural elements of blame and shame. I don’t condone the behavior described, but I do have a theory about what caused it: being “customer obsessed.”

While I was CEO of Schmidt’s Naturals, the company I founded in 2010 and sold to Unilever in 2017, I too considered myself “customer obsessed.” Early customers had been the ones to help me view my passion—making natural products—as a viable business. And so my customers became my focus group; they provided invaluable feedback and insights; they informed new product launches; and of course, they kept my business afloat. I considered customers to be my business plan.

Yet as the company multiplied in size and experienced hyper growth, new crises arose every day, each one threatening to negatively impact customers. Once, a truck carrying our raw materials tipped on the highway (thankfully no one was hurt), and we had no immediate access to backup ingredients. Another time, we released multiple batches of deodorant with faulty stick dials, rendering products unusable. On another occasion, on the eve of launching a brand new product, we were shocked to discover a latent flaw in our manufacturing process that left us with tens of thousands of unsellable units.

These are the moments that test your character as a founder, and your response to them will forever influence the culture of your company.

With each new crisis, I wondered how our relationship with customers could be impacted. Would we lose their loyalty because of a late shipment? Would they give up on us because our product wasn’t perfect? Would they switch to another brand because of the delays? I can remember multiple occasions in which I fired off emails to colleagues with the frame: “Find a way to fix this.”

As any founder of a fast-growing company will tell you, climbing sales numbers, smooth operations, and loyal customers are top priorities. But if employee well-being and company culture aren’t as equal a measure of success, then it begs the question: Have you created an environment that encourages the pursuit of profit, in spite of the human costs?

We’ve seen stories about employees working unacceptably long hours, having their paid time off suspended until performance benchmarks were met, criticized in public communications channels, or fired after participating in private conversations serving as a safe space for marginalized employees. Worrisome to me is that these behaviors are often enforced or enacted in the name of the company’s values: thoughtful, customer-obsessed, iterative, empowered, accessible, in it together. For example, “customer-obsessed” employees might be expected to do whatever it takes to make consumers happy, even if it comes at the cost of their own well-being.

What good are a company’s values if they don’t serve the very employees who are working so hard to keep customers happy?

At Schmidt’s, whenever chaos was unfolding, I had to first consider my own accountability. As CEO, it was my job to set my team up for success. While my customers were a priority, my employees needed to be, too. Frankly, I was grateful to have people working for me and trusting me with their livelihoods. Without them, there would be no Schmidt’s.

I had to make difficult decisions about where to invest. When we needed support but didn’t have the internal expertise, we first brought in consultants and agencies. Manufacturing specialists helped our production department optimize inventory and improve production line efficiency. Human resources representatives came in to establish job descriptions and implement trainings. A customer experience consultant was hired to build out that department and help implement best practices—critical as our customer base grew.

I had to be flexible. When the manufacturing setbacks caused unexpected delays, we temporarily relaxed our 48-hour policy  on outgoing shipments. We gave bonuses to employees who agreed to optional shifts over the weekend, and filled in the gaps with temporary staffing. When the dust settled, we recollected ourselves and improved our game plan with the knowledge we had gained in overcoming the challenge.

When it comes to profit and a positive work culture, despite what you read on the internet—you can have both. Relaxing our shipping standards wasn’t a sign that we were hindering our profit.  Rather, it was an opportunity to go above and beyond, winning Schmidt’s fans for life. By checking in with customers transparently throughout the process with regular updates, we developed a rapport with them, earning their trust. This not only resulted in improved customer retention, but helped our team own the problem, instead of being embarrassed or feeling like the company had done something wrong.

Today, it’s clear that we, as business owners, have a responsibility to establish values that truly reflect the needs of our inside customers—our employees. And when those values are in place, we need to honor them—by providing safe spaces and methods for venting and raising concerns. By establishing clear and fair communication policies. By offering benefits and perks independent of performance. By owning up to mistakes when we make them. By listening.

I respect brands that establish themselves as innovative disruptors in today’s crowded landscape. But there are limits and consequences to being “customer obsessed.” My hope is that many of us take this opportunity to reflect and examine if our values actually empower our employees. What if we strove to be just as employee-obsessed as we are customer-obsessed?

Jaime Schmidt is the founder of Schmidt’s Naturals and author of the forthcoming book Supermaker: Crafting Business on Your Own Terms (April 2020).

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