Bad Employees = Bankruptcy

Posted On: March 17

Some of you might recall that about six months ago I wrote a blog about a friend of mine that owns a local restaurant that was struggling. I told him that until he nailed the four key “Moments Of Truth” for any restaurant: quality food, good service, reasonable prices and exceedingly clean… that he had no right whatsoever to expect his business to grow… or even survive. Well, I stopped in his place this morning for breakfast and unfortunately it will likely be the last time I ever step foot in one of his restaurants.


A quick story…

I was running late this morning but wanted to grab a quick breakfast before my first meeting. When I walked into my friend’s restaurant I was disappointed to see that there were only about four tables occupied. I sat down and one of the waitresses brought me an iced tea immediately since almost everyone who works there knows me by name because I have been a regular for nearly 10 years. I knew that I had only about 30 minutes before I needed to run, so I mentioned to the waitress that I was in a bit of a hurry and she told me that one of the other ladies would be my server, she simply came over to drop off my tea.

As I sat at my table waiting to place my order I listened as three of the waitresses stood in the corner complaining about their customers, with my waitress especially perturbed because a table had left her a very small tip… all in coins (Last time I checked that was customer code for the service was bad and I am trying to make a point by leaving you a crappy tip… all in coins). Then the waitress that was assigned to my table looked over to me and said, “Are you waiting on me?” To which I replied, “Yes,” only for her to turn and go clean up another table, bring coffee to some other folks, and then disappear back into the kitchen. By this point, I had been waiting to order for 17 minutes and realized two key things: Number one:  it is senseless for me to order because I will never be able to place my order, receive my meal and eat it… in time to make it to my meeting. Number two: it is senseless for me to ever come back to this restaurant – because they obviously do not care about my business. So I tossed down a few dollars for the tea and left… never to return.

Bad Employees = Bankruptcy

I really like the guy who owns this restaurant. He has a wonderful wife and two great kids – one of them in college and the other one getting ready to go to college next year. Unfortunately, it looks to me as though his business is on a collision course with bankruptcy. The food is acceptable, the prices are a little high, the bathrooms are a complete disgrace and as I just told you — the service is even worse than the bathrooms!!!  I have to put an awful lot of the blame on the owner as he allows these things to go on, but it also hurts me to think that a super nice guy with a great family is likely to be completely financially wiped out because his front-line employees don’t give a damn about the customers.

So if you are an owner, manager or leader in a business here is a lesson for you: you absolutely MUST NOT tolerate mediocrity from anyone on your staff! I have seen companies with a few hundred employees driven completely into the ground by a handful of incompetent or uncaring employees that cost everyone else their jobs and the owner their life savings. Do not let this happen to you.

Let me make this perfectly clear: in the kind of economy we are facing today, people are extremely careful about how they spend their money – especially any discretionary income on non-essential items. If you want to stay in business, and hopefully grow your business, you absolutely MUST deliver good quality products combined with absolutely stellar customer service. I can tell you from my own personal experience that there is no way in the world I’m going to give my hard-earned cash to any company whose employees do act as though they are anything less than VERY excited to be able to serve a customer. After all, it is customers who pay all the bills – who pay the employee’s mortgage and car payments – who pays the owner’s mortgage, car payments and the college tuition for their kids – and if you cannot deliver consistently superior customer service and high-quality products – then there’s no reason that any customer should be loyal to your business.

Therefore it is essential that you work to create highly engaged, loyal, and dedicated employees who are fully committed to producing the best quality products they have ever made and backing that up with exceedingly excellent customer service, day in and day out – for every single customer –period.

What if you are the employee?

Right now many, many businesses are struggling to stay in the black. Believe me when I tell you that they’re looking at every single expense, every single person on the payroll, every dollar that goes out the door… more carefully than they have ever examined them before. If you, as an employee at one of these companies, are not coming in every day and adding tremendous value to the business by doing high-quality work and delivering superior customer service (to both internal and external customers) then there’s a good chance YOU might be one of the expenses that gets cut.

Let me make this perfectly clear again: in the kind of economy we are facing today, nobody owes you a job. Business owners do not have an obligation to offer you very high wages for mediocre work. If your manager, boss or owner cannot look at the work you do and see exactly how you add tremendous value to their business… then they have an obligation to help you improve or remove you from the business. To me, it is completely unfair for other people to lose their jobs or the owner to possibly lose their life savings because a handful of employees were not willing to step up and do everything they could to make the business successful and approach every day they come to work with “an ownership mentality.”

Here is the truth: The future success of your business is directly tied to the quality of the people you can get on your team and the quality of the products and services they deliver to your customers.

Really great employees with fantastic attitudes who consistently deliver the highest quality products and services possible and build excellent relationships with their customers are essential elements for building and sustaining success in business – and I cannot make it anymore “Awesomely Simple” than that.

I hope you found this blog of value and will pass along to anyone you feel might benefit from reading these thoughts and ideas. Take good care – John Spence

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  1. Very well said John. This is a simple truth that all of us in business are employees of the customer and they can, and should, fire us at any time they find better. Our relationship with customers is truly “at will” employment and we should never forget it. Once again excellent post.

  2. So very true John! My particular issue today was with the service at a bank. Unfortunately, it would be more complicated to stop giving this business my business… but if I encounter poor service again, I will be inclined to let the branch manager know. That makes me think ~ what am I waiting for?!

  3. Hi John, You hit the nail on the head with CHOOSING who to spend your hard earned cash with, which business is really deserving of it?

    Jorelle, I am in the process of switching banks, a very complicated thing to do, and am very disappointed to see already that even before the accounts are all up and running, it has not been a smooth a process as they made out. In fact, I am wondering why I am doing it if this is what it is going to be like. Certainly finding a good breakfast might be an easier task 🙂

  4. Good Employees = Growth. Growth for the employee as well as the business or the organization. Employee and employer must discuss their concerns in order to come with solutions for the benefit of each one. To my point of view, that is how business should work. Families should do that too to begin with.

    1. Stunning – and I could not possibly agree more strongly!!! I have long said that one of the major characteristics of a high-performing leader or organization is massive amounts of open, honest, robust, transparent and courageous communication. People without access to information do not have to take accountability for their actions. If the boss/manager/leader does not have a frank and honest discussion about performance expectations – and does not supply people with all of the support/training/resources they need to meet and exceed those standards of performance – then the blame squarely falls on the shoulders of the manager/leader/owner. Robsut communications is a key to success and growth in any organization. Thank you so much for your wonderful comments Rose.

  5. John,

    What if I am the employee?

    I just made a transition to the telephony industry and was brought on by a locally owned and operated business owner who was willing take a chance on my enthusiasm, my willingness to learn, and my previous success in the copier industry. To date I have only been able to generate 90k in revenue in 14 months. I work hard, I am open to critique, I respond to being challenged, and I am currently pooling my resources from other experts to help improve my consultative sales approach.

    I feel like I am doing everything I know how to do to be successful as well as asking help from others who are showing me what I don’t know who can help me get better.

    The owners have been gracious in extending a generous compensation package and have only recently made a minor change to that plan of which is still livable. I really am wanting to make this work and enjoy the company and the industry very much. I also believe that they do see value in me and truly believe that my million dollar pipeline will soon turn around.

    In a common position that I find myself…. I AM OPEN TO SUGGESTIONS. Any advice would help. Thanks for all that you do in challenging business owned and their employees alike.

    1. Wow, great comment — and it sounds like you are doing everything just right. My only suggestion is to communicate as much as possible with the owners – keep them in the loop — ask for as much help and advice as they can offer. I would also spend every spare moment reading and learning — looking for any advantage you can gain – anything that will help you succeed. Oh, and you might also talk to some of your top customers and see if they can help you get referrals and also beeter understand the market. Hope that helps– John

  6. Thanks for posting this John…well said!

    I am thankful its not my restaurant since you said “Breakfast”. I know better than to try to open that early with our staff (If any of our staff is reading this…don’t worry, we won’t make you get up that early).

    We 100% agree with you. As owners we are 100% at the mercy of our staff. Currently we have about 250 employees spread out in four different areas and all with different personalities. We have to say, when we first got into this business, we thought we were able to just hang out in the kitchen and just work on giving stellar service to our guests only.

    Boy were we wrong, we had to learn quick that it was all about our people that work at our restaurants. The outcome of our reputation relies so much on our staff, so we flipped our model of priority by making our staff the number one most important person in our organization and we have since then tried to put a lot of our effort on nurturing, respecting, teaching and growing our staff.

    Happy employees = Happy Guests = Successful Business = No Bankruptcy

    Thank you john for all of the times we’ve spent together.


    1. Hiro, absolutely NOT any of your restaurants – your entire team does an amazing job at all the Dragonfly establishments! And you are following a good model that many successful companies have followed… employees first so that they will put the customer first. All of the research is clear: the number ONE factor in creating highly loyal and engaged CUSTOMERS… is highly engaged and satisfied EMPLOYEES! Your equation above is right on target. Which also means you need to really, really listen to, understand and respond to your customers AND your employees. Thanks so much for the great comments Hiro.

  7. John,

    Your observations are right on regarding customer choices. How are you going to direct the feedback to your friend? How long have you tolerated this attitude and environment, hoping it would improve? I am sure that there is more to the story about your feedback with your friend. My takeaway from your blog is how much we owe our friends some straight between the eyes feedback when their businesses aren’t meeting the standards we expect, the first and every time it happens.


    1. Kevin, your points are well taken. Had a long sit down – twice – with the owner. Twice with the manager… seems to have fallen on deaf ears. Walked away from this place about 4 years ago — and stayed away until about 8 months ago, to give them another shot. Fool me once shame on you, fool me twice….

  8. Investing in exceeding customer expectations is what we all should be doing. When it comes down to it, we all want and expect the same when we are being served.

  9. John!

    Amazing story. We have always recognized the importance of our team and this year are trying to come up with better ways to serve them and try and help them enjoy the same down time we deem so important for our clients. It is always a fine line in managing any team. I for one, never realized that getting the clients would be the easy part and keeping the company culture the harder. But, with great mentors like you giving us leadership like this makes for a smoother path.


  10. Poor customer service is definitely a way employees can bankrupt a business. But as an outsourced bookkeeper, I’ve seen employees also cause financial hardships to their employers by being poor stewards in the following ways. And the sad thing is, the owners allow it to happen.

    *not correcting an overcharge/error on vendor invoices
    *not being accountable for petty cash
    *wasteful/unnecessary spending on office supplies, materials
    *double paying vendors and not requesting refunds
    *theft – yes! I’ve seen owners give employees passes on this!
    *not bringing to the owner’s attention excessive banking fees or negotiating with vendors to remove late charges
    *not researching the best deal when making a company purchase (travel, computer equipment, office supplies)

  11. If I owned a restaurant, or any service business for that matter, I would print this post out and tape it to the company refrigerator for every employee and manager to read!

    You are so right about people taking a hard look at how and where they spend their money these days. You can bet that most people won’t be as gracious as you were by giving this poor restaurant a second chance. Thanks for writing this, it needed to be said.

  12. What exactly are a customer’s expectation? Customer’s are people and as such, have a different view on what good customer service actually is. Most want honesty and for you to sell them what they need, not neccasarily what the want. A few just want thier butts kissed.
    I myself, attempt to qualify the customer to find out exactly what they NEED. That is good customer service.
    Many would say “Your lucky to have a job” Really, I think I’ve made my own luck and my employer is lucky to have me.

  13. Couldn’t agree more. In our industry, real estate, most brokers seem to want to retain the most number of agents possible – regardless of their ft or pt status, competency, or sales rate. In a market with fewer leads we need to make sure all of them have the highest chance of being converted so we don’t feel any regret terminating for performance reasons. -mj

  14. Excellent post and valuable for both employers and employees. This needs to be emphasized more in schools so that future employees and business owners do not become complacent with being “just average.” Our country is doomed to fail if we allow ourselves to be anything but stellar at all we set out to achieve. I’m currently wearing a t-shirt that reads: “Failure is not an option,” which I purchased at the Kennedy Space Center; it refers to the Apollo XIII mission. And, yes, while failure is often inevitable, it should eventually lead to more attempts toward greatness and success. It should not be considered “Plan B.”

  15. Great article John.

    Though after reading it, I must say, its really saddening it is. The situation you described, about your friend’s family and future, I hope it does well. Its kind of infuriating that a nice guy and his business have to go down simply because of a few inept employees.

    I’m not sure if this’ll help or not but perhaps he might want to consider having some kind of integrity checks in place? Perhaps hiring a company (like this one I know called SQM at ) to do the checks for him? If employees are being a core problem that needs to be addressed, I think something like this will be MUCH needed.

    In any case, I hope his business prospers.

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