Without clients, we wouldn't have a firm - but without employees, we wouldn't have clients.So when it comes to answering the question of whether it is more important to have client or employee loyalty, I would have to answer that employee loyalty and satisfaction is more important.

Employee loyalty is the foundation for long-term success and exceptional profits. Without employee loyalty, you won't have to worry about client loyalty, since you will be spending most of your time worrying about poor performance, poor quality and poor profits.

Accounting firms have long pursued programs - client satisfaction surveys, focus groups, cross-servicing etc. - that are aimed at gaining client loyalty. While some of these have been somewhat effective, they are not the answer to developing client loyalty. While I have not done a statistical survey, I would venture to say that there is a direct correlation between employee loyalty and client loyalty.

Hence, in order to improve client loyalty and satisfaction, more attention needs to be given to ensure employee loyalty. And it's not the "program du jour" that will win employee loyalty. Loyalty, like trust, comes from the inner being, not from some policy or program. Firm leaders must create organizations where their employees and fellow partners find meaning, purpose and a sense of belonging.

* Finding meaning. Ask yourself this simple question: Why do you commit your time, energy and perhaps dollars to any organization?

Most of us become committed to an organization that pursues a vision of making some difference in the world in which we live. Some people find that vision in religious organizations, others in charitable and civic organizations, and still others in business or academic organizations.

Service firms, like accounting firms, exist to serve others, to help clients achieve their goals and make their business lives easier. The greatest satisfaction that we achieve is not getting the weekly paycheck, but having some impact on our clients' lives. If your partners and staff don't get anything more from the firm than their paycheck (which, of course, plays some part in finding meaning), they are missing a critical part of finding meaning in their work. How do your people find meaning at your firm?

* Finding purpose. One great thing about a sports team is that everyone has a role to play. Our employees also feel the same way. They want to feel that in some way they are valuable contributors to the success of the firm.

Partners and employees know that they are contributors when they understand how their work helps the firm achieve its strategic vision. This is called alignment. Even receptionists should know how their position and daily interaction with clients help the firm achieve its vision. Studies have shown that more than half of the people in all kinds of organizations are unaware of how their jobs align with their company's vision.

No matter how small or large, how important or unimportant the role, every employee has a part in helping the firm achieve its vision. What are you doing to help your employees find purpose at your firm?

* Finding a sense of belonging. Finally, employees and partners want to work with others who want to achieve the same big hairy audacious goals as they do. I know from personal experience that when my professional goals were not aligned with the firms I worked with, it usually meant it was time to move forward. Employees and partners feel that they belong at a firm when they are valued, respected and feel that what they do really matters.

Abraham Maslow, in his hierarchy of needs, placed belonging and love needs at the top of his hierarchy. Recall that physiological needs - salary, health insurance, etc. - formed the base. Esteem needs - esteem of others and self-esteem - were at the very top.

In almost every exit interview that I have done with employees and with clients, I hear them saying that they did not feel valued by the firm. In short, they did not feel part of the organization either as an employee or a client. What do you do to make your employees and clients feel valued?

MAKING IT HAPPEN

Here are some tips for improving employee loyalty and satisfaction.

1. Forget the latest employee loyalty gimmick. The first thing you need to do is to create a meaningful vision (what do you want to become), mission (why is the firm in business) and core values (how do you want employees to treat each other and clients). Without these building blocks, your employee and client loyalty programs won't have legs to stand on.

2. Once you have done the above and the answers really mean something in the firm, you can start observing how people behave and are treated in the firm. The best way to do this is simply to manage by walking around.

What do you see happening in the office? Are your people happy at work? Do they smile? Are they courteous to one another? Is there a positive atmosphere in the firm? Is there a sense of energy? If not, then you need to go to the next step.

3. Identify the causes of employee dissatisfaction. Is it the prima-donna rainmaking partner? Is there so much pressure on production that nothing else matters? You need to get your arms around the root causes. If you don't, nothing in the firm will change.

4. Have an independent third party conduct annual employee attitude surveys and exit interviews to gather more information. Take only two or three issues from the annual employee attitude survey and work on improving them during the next 12 months.

5. Finally, tie business results to improved employee satisfaction and loyalty. Studies show that as employee satisfaction scores rise, customer satisfaction scores also increase, productivity improves, retention increases, and last but not least, profits improve.

August Aquila is a nationally known consultant to the accounting profession (www.aquilaadvisors.com). Reach him at (952) 930-1295 or aquila@aquilaadvisors.com.

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