Harnessing Human Resources for Sustainable Competitive Advantage

In today’s competitive business world and challenging economy, retaining customer base is critical to success. Why? Because……

• Brand loyalty is a thing of the past. Customers seek out products, services and suppliers that are best able to satisfy their requirements.

• Customer retention and satisfaction drive profits.  Customers could improve profits by 25% by just reducing customer defections by 5%     (Harvard Business Review)

• Keeping a delighted existing customer is 5 to 7 times more profitable than attracting one new one.  (“Companies Don’t Succeed – People Do!” Graham Roberts-Phelps, 2003).

• Happy customers tell 4 to 5 others of their positive experience. Dissatisfied customers tell 9 to 12 how bad it was.

The main benefits to customer satisfaction:

1.             Customers stay with the company longer

2.             Customers deepen their relationship with company

3.             Customers demonstrate less price sensitivity

4.             Customers recommend company's products or services to others

5.              Customers buy more

Therefore, clearly understanding what customers want, need and perceive as value is fundamental to maintaining the current customer base.

There is a growing body of research that supports a positive correlation between customer satisfaction and employee satisfaction.  More specifically, employee commitment is cited as a source of increased customer satisfaction, in that more committed employees stay with the company longer and develops a better understanding of the company’s processes, products and customers.  In other words, employee satisfaction creates value.

There’s a floor to cost reduction but no ceiling to value creation.  A company’s human resources should be viewed as a value-producing asset instead of a cost to be minimized, reduced, or reined in. The only vital value any enterprise has is the experience, skills, innovativeness and insights of its people, and the one thing that companies can control is the quality of their people and how that resource is managed. The success of any company will depend on its ability to understand how human capital links to performance and the creation of customer value.

The quality and performance of our people is what sets companies apart in an intensely competitive market!

The most competitive companies will have the best strategies and methods for attracting, hiring, managing, developing and retaining top performing talent.  These companies will create the elusive competitive advantage by:

• Recruiting and hiring the best available talent
• Developing and motivating people to reach their fullest potential
• Retaining talent (and the investments made in them)
• Designing talent management information systems
• Implementing performance based compensation systems
• Designing coaching and mentoring programs

“Those who build great companies understand that the ultimate throttle on growth for any great company is not markets, or technology, or competition, or products.  It is one thing above all others:  the ability to get and keep enough of the right people”.

Jim Collins- Good to Great.