Frontline Worker Tenure

A boring truism is that in any sort of corporate environment, leadership is going to want to condense the genuinely infinite complexity of running a business into some finite comprehensible set of markers, goal posts, or metrics. You can use those markers to know if you’re doing a good job or a bad job. Perhaps you incentivize leaders on whether they can make those markers go in the right direction.

The challenge, of course, is picking the right markers. If they’re too easy to impact directly, then they become gameable; if they’re too hard to impact then you’re just playing a guessing game every time you try to do something to influence them. You also don’t want them to be too close to the money and to over-optimize for money alone, but you don’t want to ignore it either. In fact, it’s almost always a good idea to have at least some tension metrics, such that if you find yourself gaming one thing, it will end up creating a red flag on another. You want to measure for both how much money you can make and how high quality your product is. You want customers to keep buying more stuff and be satisfied with what they buy. Etc etc.

That’s broad, but this post is narrow: I think there is a specific kind of business that should incorporate a very specific metric into its top-line goals, as a way of making sure they preserve what their business stands for and ideally excels at. I think that if you run a premium, mass-market, service-oriented business, you should be tracking and optimizing for frontline worker tenure.

And to be clear, optimizing for long frontline worker tenures.

If you differentiate yourselves from your rivals by the idea that you are a more premium experience, and that a key element of that premium experience comes from exceptional service, then it is strongly in your interest to make sure that the people performing that service and who most customers interact with most frequently enjoy and thrive in their jobs! This can be to avoid bad press, because people who are happy will go the extra mile, or because if you are a great place to work you can poach all the best service workers.

Who am I subtweeting with this post? Starbucks and Disney Parks most specifically. To a lesser extent, Apple (in the context of things like its retail stores and genius bars.)

Starbucks tries to set itself up as the more premium (and therefore more expensive) version of a mass-market coffee shop, and the staff are a huge portion of that! The new CEO keeps saying as much, that they need to bring back the idea of Starbucks as a place you want to go, not just a place to get your coffee and leave, and even calls out that service is a core component of that goal. But you know who’s going to give me a better experience as a customer? Staff who are happy and love their jobs! Tiny recent example, I will have a better experience from a happy staff member wearing whatever they want vs a staff member in “appropriate” brand-coordinated outfits who is bitter about having to buy the outfit themselves.

But it’s not just happy employees in the abstract. It’s happy and long-tenured employees. From first principles why should the idea of spending an entire 40+ year career as a Starbucks barista seem ludicrous? Why have we constructed the job in such a way that both sides expect it to be temporary and extractive? Why is there comparably more societal acceptance for lifelong cooks or bartenders, and less so for lifelong baristas1? And again, who do you think will give you a better customer experience: the person who loves their job and has been doing it for decades, and has learned from that experience, or the person who is new, just needs a job, and is intentionally expecting to “graduate” beyond it?

Disney is obviously the most egregious of the three. The entire idea of theme parks2 is premised on being a premium consumer experience, a “once-in-a-lifetime vacation”, and that absolutely cannot happen without incredible staff performing world-class service. It’s a cliche for a reason, but the “Disney magic” is not just that all the doorknobs are period correct and they put a trash can every 25 feet and the rides are big and expensive and have your best friends on them as characters, but because the people who you interact with on a day-to-day basis add not just positive experiences, but surprising positive experiences, especially when they go out of their way to help you turn a potentially negative experience into a positive one. At its core, exceptional service is just as much a part of the “product” of Disneyland as any ride or roller coaster!! Disney more than any other company should celebrate and optimize for more cases like the photographer who’s worked at Disney World for 40 years, etc. It’s especially galling given that, unlike Starbucks, you have people who have literally dreamed their whole lives of getting to work there! You have college kids competing for an internship program! Compared to Starbucks, I’m more disappointed in Disney for mistreating its employees in the same way you get more disappointed in a hall-of-famer who hits a double than a bench warmer who gets a walk; you’ve been blowing an extraordinary lead in terms of potential employee goodwill!!!

And importantly, like I mentioned in the D’Amaro post a while back, the fact that doing this well would be quite expensive is good defensive strategy. You know what’s really hard to try and copy? Getting a staff of 10+, 20+, 30+ year tenure!! You need to either spend 30 years, or you need to by definition spend more than Disney in order to poach them! Same of course is true for Starbucks.

To be clear, this does not make sense for every business. If you are competing on price instead of service, then yeah optimizing for the lowest price and therefore lowest costs makes sense. If you’re competing on consistency (eg McDonalds) then optimizing for standardized training and lots of turnover is fine. And same if you’re competing primarily on product quality as opposed to service quality; this is why Apple is sort of a halfway example, because for the actual moneymakers of the iPhone and the App Store, it is more important to make the iPhone be a really good physical device running high quality software than it is to give great sales and support service. Apple as a whole should probably optimize for eg: industrial design and supply chain logistics tenure more so than retail or support tenure (but Apple Retail should strongly optimize for tenure within its walls.)

But even here, despite not being the most important…. it’s still important! I grew up with Apple products in part because they made the best consumer laptops, followed by the (arguable) best consumer phones, but a big thing my parents ingrained in me early was we were an Apple family in large part because of the Genius Bars. Because you could always take your computer in to get looked at by genuine trained Apple experts, and in most cases repairs were covered by a very generous warranty (or pretty reasonable out of pocket prices.) Exceptional service, especially pre-App Store, was a key pillar of the overall Apple product offering, and helped sell the idea that it’s fine to spend a lot of money on a computer. Premium service is part of, and justifies the premium price of, the premium offering, in a way that was not true for eg. HP or Dell.

Now some of this is obviously just general labor market grumbling, where it’s silly that we have constructed jobs that live in a weird netherworld of “important enough to society that we need to pay people to do it” and “not important enough to treat it as a plausible long-term career.” Made all the more important in a world where the AI psychos are salivating at the idea of theoretically automating all the (scare quotes intentional) “good jobs.”

But remember how I said you have to take the infinite possibility space of running a company and find some way to condense it down into something measurable? I think frontline worker tenure is a good way to condense the smaller infinity of “stuff related to service” into one metric. And this metric doesn’t mean you can’t like, have reasonable standards and still fire people! In fact, I would argue by designing a job in such a way that the average employee could see themselves doing this job forever and be satisfied with it, that is what gives you the ability to fairly expect (reasonable) high standards from said employees! Someone who actually likes their job and wants to keep it is going to be much more receptive to a clear understanding of what that job does and doesn’t entail than someone who doesn’t care and is only there for the summer and not just expects, but wants to be cycled out!

And also at the beginning I did say this should probably be a tension metric. Apple probably makes enough money off selling casino games for children that it could afford to make this the sole retail KPI without much issue. But Starbucks and to a lesser extent Disney do have to contend with the reality that optimizing for frontline worker tenure is probably in tension with other ways they keep the business running successfully, assuming that means they would have to pay more in compensation or benefits, or have to allow more flexibility in scheduling, or give more vacation etc etc, and that all costs you money!

But that’s the point of a tension metric! If you just optimize for making money, then you run the risk of diluting the thing that makes your company special and worth paying for in the first place! Keep your money KPIs, but also keep them in tension with KPIs that correspond to the thing you can do better than anyone else. And if you’re Starbucks, Disney, Apple Retail, or any other premium mass-market service-oriented company, I think the thing you (try to) do better than everyone else is premium service, and frontline worker tenure is a good way to optimize for keeping that edge3!