Club Insider

The Connection Between Employee Love and Profitability

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Stephen TharrettStephen Tharrett

In the quest for sustained business profitability, employee empowerment has become a topic of significant discussion and commentary from some of the brightest minds in the business world. Employee empowerment has been a foundational block of business success that has been espoused by leading business minds for decades. Not until recently has it garnered such luminary status and become a form of "Holy Grail" for businesses desirous of distinguishing themselves in the vast karaoke business environment of the 21st century.

In the mid-1990s, a ground-breaking article in the Harvard Business Review, entitled the "Service Profit Chain" set the stage for the current focus on creating a workplace environment that engendered employee loyalty (love). In that groundbreaking article, the authors demonstrated that profitability, especially great profitability, could be traced back to a loyal employee workforce. The authors demonstrated businesses that were able to engender employee loyalty by creating an empowered workplace environment tend to have greater customer loyalty, which in turn, was directly linked to above- average profitability.

Mark WilliamsonMark Williamson

Fast forward to the January, 2012 issue of the Harvard Business Review, and front and center was a series focused on the value of employee happiness to organizational profitability. The cover of the magazine even says, "The Value of Employee Happiness; How Employee Wellbeing Drives Profits." The gist of this series was that organizations that establish a positive workplace environment where employees thrive not just survive, will ultimately lead them to greater profitability. These thriving employee environments are those in which employees express a high degree of loyalty to the organization, what some might refer to as employee love.

At our former company, the leaders often referred to the most loyal employees as "bleeding green," referring to the colors of the organization. It was seen as incredibly valuable, something our founder, former chairman and CEO, continually espoused and recognized over a period of 40+ years at the helm. He, like other great leaders, recognized that the sustainable success of the business was highly dependent on a passionate, committed and loyal employee team. So, how do we create such a business climate for their workforce? How do club operators and owners engender employee love and create a thriving and empowered workforce?

According to the authors of the articles on employee happiness and empowerment in the above-mentioned issue of Harvard Business Review, several attributes stood out:

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