Study: Why employee first means business first

* This story was previously published as “Study turns notion of business leadership on its head, but do the ideas have any legs?” and is re-published with updated information

The University of Illinois’ school of business says that emphasizing service to employees instead of service from them, as an approach to leadership, can make a business more profitable instead of making it less competitive, among other benefits. The thesis is published and fleshed out in the article “Servant Leadership and Serving Culture: Influence on Individual and Unit Performance” in the Academy of Management Journal.

The study asserts that when bosses ask how they can help employees instead of how employees can help the bosses, in a “servant” leader style, customer happiness and job performance increase, and turnover decreases. As a result of fostering trust, caring, cooperation, fairness and empathy employees feel more valued, and in turn give more back to their bosses and customers, the paper explains.

The research is based on data and surveys collected from 1,000 employees of Jason’s Deli, a national restaurant chain, at 71 locations in 10 metropolitan areas. The investigators found that stores with “servant” leaders had higher job performance, customer satisfaction and, most importantly, higher sales. While this study is new, the idea is not. Robert K. Greenleaf was the first to coin the phrase “Servant Leadership” in the 1970’s.

According to Sandy Wayne Ph.D., one of the lead authors of this study, the leadership style of C-suite executives also creates a company’s organizational structure and employees at all levels respond in kind to it.  

“C-suite executives need to be aware that employees respond positively when executives take into consideration the concerns and needs of lower level employees.  So, although employees may not interact with C-suite executives, they do pay attention to executives' communications and their decisions…C-suite executives that focus on developing and meeting the needs of their employees find that profits will follow as those employees will ‘go above and beyond’ by exceeding performance expectations,” stated Wayne.

In addition to Jason’s Deli, another prominent corporation which has established a servant leader culture is, Starbucks, a world-renowned brand. In an interview with Greenleaf.org, Howard Behar, Starbucks president from 1995 until his retirement in 2003, suggests that if businesses are interested in serving customers, they need to serve their employees first.

“Why was instilling a culture of servant leadership important to you?” Greenleaf.org asked Behar.

“When I first started, Starbucks was still a small, entrepreneurial company that was very focused on its products and services. It wasn’t yet focused on the organization or people. I had been with much bigger companies before that and from those experiences, I had developed strong beliefs about the importance of employee engagement in building a successful business and lasting organization. Ultimately, I knew that how you treat your people is how they’ll treat your customers,” answered Behar.

For more information on implementing servant leadership, managers can visit www.greenleaf.org.

Related Story: Ten Critical Steps to Achieving Magnetic Leadership

Related Story: Three Leadership Styles You Need at the Top

Like us on Facebook, follow us on Twitter!

Read our latest edition - Business Review USA