“There are two simple ways of making money as a business owner:
- You can lower your costs by paying low salaries and side benefits to your employees
- You can lower your costs by providing good salaries and good working environments, in other words, you can lower your costs by investing in your people.
Isn’t this bizarre in the economic recession we’re currently in?”
These are the words of a Harvard Business School scholar. Zeynep Ton, MIT Sloan School of Management professor. Although we’re both Turkish, I met her on the pages of Financial Times.
She is one of the most successful professors below age of 40. She is referred as one of the eight rising professors by CNNMoney. Besides her amazing academic performance, she successfully managed to become a mother of 4.
I personally found her very interesting because of her book “The Good Jobs Strategy”, published in 2014. Coming from a country in which employees see basic social security benefits as privilege, she surprisingly wrote a book that defends a competition strategy that argues staying ahead of the competition can be achieved by offering best salary packages to employees. Ton is a famous management consultant who closely works with top global companies and delivers results.
In a nutshell, her book “Good Jobs Strategy” talks about how companies can cut costs and increase profits by investing in their people. Ton first argues that bad jobs, bad work conditions and low salaries should not be your destiny. Based on her studies and personal observations in retail sector, she writes about companies paying small salaries to their unhappy employees who work in irregular shifts for long hours. This vicious cycle results in unhappy customers, more discounts and lowering profits.
After 10 years of study in the retail sector, Ton comes with a controversial argument. She argues that in a low margin sector, paying good salaries and benefits, and providing optimum work environment would benefit the companies themselves. How is that possible?
At the same time, they can maintain their profits and satisfy their stakeholders?
How can they balance it all?
With the great work of happy, self-confident, well educated, professionally satisfied individuals.
Ton gives “good work strategy” examples from successful companies around the world (Southwest Airlines, UPS, Toyota, Zappos and In-N-Out Burger) The company strategies, politics and stories from the US retail giant Costco, Trader Joes, Quick Trip and Mercedona from Spain are truly inspirational. All four companies belong to the low cost category businesses. Ton reveals their transformation journey by adopting good work strategies, from an academic’s perspective.
The outcomes are simple: highly investing in employees result in perfect operation, as a result, profits rise, so does customer satisfaction.
Good Jobs Strategy talks about an unusual formula of sustainable success to the employees, customers and society at large. I particularly recommend this book to HR professionals.