The Loyalty Link by McCarthy

Management is basically a branch of science that many of us don't want to understand. It is dry, boring and basically has mostly nothing to do with our lives but strangely, it does, except most of us don't know about it.
Here's a glimpse of what it is about.

IT IS often said loyalty is not a right, it must be earned. That about
sums up the gist of The Loyalty Link. At first, it seems that this topic
is not exactly the right recipe to work up an appetite over the coffee
table.
But author McCarthy has lent a very human element to an aspect that
divides the ranks of employees and bosses rather quickly in many
organisations. And it often happens that workers readily pin the depth of
loyalty to the size of their pay packet and the `after-work' services
rendered by the company they work for.
McCarthy proclaims at the outset that his book is founded on three
premises: Exceeding customers' expectations, employees walking the extra
mile and bosses' treatment of employees. All three premises lead back to
the same destination - the loyalty link.
The loyalty link as defined in so many words by the writer is the
connection between the firm and its customers and the firm and its
workers. Between these two categories lies an ocean of management areas
that serve to enhance a company's profitability, its employees'
productivity and its clients' loyalty. What would have been another
subject that produces the `sleeping pill effect' to most employees or
readers has been explained rather lucidly with many illustrative case
studies.
For example, McCarthy relates the story of a family which suffers the
tragic circumstance of having their home burnt to the ground. They lose
everything. As they look grimly at the charred remains of their home, a
pizza van draws up. The driver approaches the family with two large boxes
of pizza. A family member says: `There must be some mistake. We didn't
order any pizzas. We don't even have a phone.'
`There's no mistake,' says the pizza guy, and adds that he has seen what
happened and `my boss and I thought that, by now, you probably need
something to eat. Please accept it with our compliments.'
The story serves to illustrate that an employee who knows how to
sympathise with strangers very frequently rewards his company with his
discretionary actions. No prize for guessing which pizza firm has become
that afflicted family's pizza firm.
A sin committed by some business giants involves taking their customers
for granted. In the mid-80s when IBM had an almost stranglehold on the
personal computer market, customers had only one option. In the ensuing
years, small players like Compaq and Dell sneaked into the market and
began to make a difference. In time, the two small companies produced
products that performed better and at cheaper prices.
Before long, Big Blue's customers started to switch camps. McCarthy's
point: Never take your customers for granted. The price you pay may be
more than you can afford. IBM learnt it the hard way.
This book is a motherlode of ideas that all companies which hold their
balance sheets very close to their hearts cannot afford to ignore. It
spotlights the crucial zone of employee satisfaction. Satisfied workers
means satisfied customers. Companies that suffer from an acute lack of
employee loyalty have actually contracted what is termed as a loyalty
deficit cycle. In other words, the more a firm veers away from
profitability, the more rules are instituted. More regulations usually
lead to lower satisfaction on the employee's level. This eventually
translates into inefficiency and lower productivity.
McCarthy states early in the book, `When technology rules, then wages
tend to drop. Companies caught up in the notion that machines are more
cost-effective than people do not spend a lot of time or thought on the
employee selection process.'
The writing on the company wall is when machines are given higher
priority than humans - workers become dehumanised. When that effect sets
in, the company is on the inevitable road of decline. It's just a matter
of time.
Throughout the entire book, the thought of the day is `look after your
own people'. That means the workers who work for that entity called the
organisation. Very often, organisations proudly proclaim that their people
count the most. The bottomline in management parlance is `walk the talk'.
It simply means it is not enough to just to talk, one must be seen doing
it.
The Loyalty Link would have been an exasperatingly dull book if there
were few real life studies to savour. McCarthy has several truckloads of
case studies for the readers to marvel at.
One story that deserves a hearing is the true tale of an entrepreneur
who lost his textile factory in a 1995 fire. Instead of closing shop and
sending all his workers home for good, Aaron Feuerstein, aged 70, told his
workers in the small town of Lawrence with a population of 2,000 that he
intended to build a new factory right away, give his men Christmas bonuses
and guaranteed his employees medical care of at least three months.
There was no talk of gloom and doom from Feuerstein's lips. He described
his employees as `my greatest assets', saying, `And we've been good to
each other in ways that are not always expressed, except in times of
sorrow. When all is chaos, that is the time to be a mensch.' (Mensch means
a decent and responsible person, someone who does the right thing, even
though it may not be in his or her own best interests.)
Feuerstein's action was picked up by some thoughtful journalists and
although it wasn't his intention, he became a legend in his own time.
Clinton personally invited him to attend his 1996 State of the Union
address. That elderly gentleman was a hero in his country and his
employees have absolutely no doubt about it.
In these trying economic times in Southeast Asia, Dennis McCarthy's The
Loyalty Link should have a balming effect on less courageous souls. We
need to be reminded of how some great companies have sailed through
similar circumstances and gallantly survived to tell their corporate tales
of endurance, survival and success.
Tips and approaches abound in this book. Companies which have lost their
way in the financial maelstrom need a compass to find their way back. This
book could very well be that compass which some of them desperately need.