Treating Your Employees Like Customers

Recently, someone I don't quite respect suggested "Just treat your employees like they are your customers" twice within a two week period.  The first time I heard it, I felt that it was somewhat of a platitude that didn't really address the situation but I thought it was a fairly reasonable suggestion.  The second time I heard it--I realized that it was this person's tag line. So I needed to understand what this meant.
Several months ago, in fairly quick succession, I encountered Don't treat your employees like your children and then Treat your employees the way you would your children.  I wondered, how did this person land on this as a pat phrase.  We tend to live by The Customer Is Always Right commandment would that mean that the Employee is always right as well?  That doesn't sound quite right.  I polled several managers and the general thought was no we can't treat our employees like our customers.  We have customers have a full range of customer behaviors that we often tolerate for short periods of time for good customer service.  With adults we walk a fine line and tolerate considerable bad behavior.  We only correct if their behavior is egregious--which would be behavior that would end in the termination of a civil service employee.  I'm sorry sir, there are children around, can you please use that computer over their to look at your porn. / I'm sorry ma'am but please do not use that racial slur when speaking with the staff. / Yes, I can smell the cannabis permeating his clothing as well, but no one else is sitting around him, maybe it will dissipate soon. 
In this manner, it doesn't seem reasonable to treat our employees as we would our customers when it comes to allowing ongoing behavioral issues.
One person suggested that we should treat our employees like we do our teenage customers.  We want to give them free to act independently but when their behavior is disruptive then we correct their behaviors with somewhat more authority.  But then we are back to treating our employees the way we would our children.
My next step was to go to the internet so see what has been written on this.  I found an article by Fast Company that gave me a better idea.  This leadership article speaks about creating an organizational culture where the organization that believes that it's culture is it best products.  The culture hires employees with this in mind.  I can of course work on the micro culture of a particular space, but I don't see this being demonstrated in the current organization culture.  In fact, the person offering the advice has in fact in my opinion demonstrated just the opposite to date.