Let’s just put this out there again: Employee Engagement is not a strategy.
I just read somewhere that it is … which tells me that it bears repeating both what it is and what it isn’t. Employee engagement is…
…the emotional connection or commitment that an employee has to the organization that then causes the employee to want to put forth the additional effort to ensure the organization and the brand succeed.
What the company can do is have a purpose and build a culture that facilitates employee engagement. But keep in mind that t-shirts, free food, and surveys do not a strategy make. And no company can make an employee engaged.
When there’s some confluence of: (1) emotions, commitment, passion, sense of ownership, etc. on the part of the employee about the brand and (2) what the organization does (purpose, brand promise, who the company is and why, etc.) to facilitate and enhance those emotions or that commitment – then we have employee engagement.
Aon Hewitt and Edelman recently released the results of some of their employee research. The findings are interesting, but I wanted to see if/how they defined “Employee Engagement.”
Aon Hewitt claims that employee engagement is starting to rise, according to their latest study. They define engagement as: “the psychological and behavioral outcomes that lead to better employee
performance.” They also define engagement using three attributes that include the extent to which employees:
- Say: speak positively about the organization to co-workers, potential employees, and customers
- Stay: have an intense sense of belonging and desire to be a part of the organization
- Strive: are motivated and exert effort toward success in their job and for the company
Edelman called out “Employee Engagement findings from their 2013 Edelman Trust Barometer,” but the research was not focused on employee engagement specifically. As a matter of fact, as you can tell from the title, the annual research is all about trust: trust in leadership, institutions, and industries. They did, however, uncover a couple of interesting things that relate to the employee experience:
- Treating employees well is a higher priority for employees than it is for executives.
- There is a crisis in leadership, led by a distrust in executives and the business; executives need to rebuild their credibility with employees, reinforce ethical behavior, and adopt an inclusive management approach by listening to other voices – specifically, employees’ – and incorporating those into decision making.
This last point echoes a statement – “we have a crisis in leadership in this country” – that Bob Chapman (Chairman and CEO of Barry-Wehmiller) made in his Tedx presentation last year. Take a look at my post about his talk; you’ll see that he addresses the first bullet point as well: “7 out of 8 employees believe they work for a company that doesn’t care for them.”
So, why is employee engagement constantly referred to as a strategy? Good question. I actually think we should be talking about leadership strategy, not employee engagement strategy. What should leadership’s strategy entail? Creating the right conditions to allow employees to become engaged. Those conditions include:
- Clearly communicating the vision and purpose of the organization
- Communicating openly and being transparent about company performance and how employees’ contributions matter
- Ensuring employees are well taken care of, which includes tools, training, development, recognition, respect, appreciation, trust, balance, and more.
Tall order? Yes. But totally worth it!
There are only three measurements that tell you nearly everything you need to know about your organization’s overall performance: employee engagement, customer satisfaction, and cash flow. … It goes without saying that no company, small or large, can win over the long run without energized employees who believe in the mission and understand how to achieve it. -Jack Welch
Thanks for a great post, Annette.
I find the commentary about “employee engagement” quite interesting. Proponents argue for an employees-first strategy (there, I said it) because engagement is correlated with better business performance.
A lot of things are correlated with business performance, but it doesn’t mean they uniquely drive that performance. I rarely find any mention of the customer in discussions about employee engagement. The assumption seems to be: happy employees => happy customers!
Engaged employees can contribute to a better customer experience and loyalty, but only if what they are motivated to do is aligned with what customers value. It’s also true that happy customers => happy employees. For more on this, read my article: Employee Engagement: Putting the Cart Before the Horse?
I think you nailed it with your closing quote from Welch, which shows employee engagement is not the “one thing” to be managed: “There are only three measurements that tell you nearly everything you need to know about your organization's overall performance: employee engagement, customer satisfaction, and cash flow.”
As for leadership vs. employee engagement strategy, I’m not sure that saying we need a “leadership strategy” helps very much. Yes, we need better leadership, with leaders who define and execute the business strategy, which includes developing engaged/loyal employees and customers.
But I’d advocate for a customer strategy instead — one that creates value for customers, and then aligns employees who are “engaged” to do the work that will create value for customers and the company. Starting with employees is just backwards, in my view. But then, this is CustomerThink.com, not EmployeeThink.com, so I’m biased.
Oh, and by the way, there really is an EmployeeThink.com, but it’s just a placeholder site. At the top is this statement: “Satisfied Employees lead to Delighted Customers.” Sheesh.
….rarely, if ever, include ‘customers’ or ‘customer value delivery’ as a core tenet. Classically, creating some added benefit for customers, and increasing their loyalty behavior toward a company, is more an incidental, nice outcome than a stated objective of employee engagement.
Building employees into a customer-less concept of ‘leadership’ misses the real objective of alignment and mutual value-generating performance. Bob Thompson and I absolutely agree on making employee contribution behavior an integral element of a strategy which creates value for customers, and aligns employees with overall enterprise business goals – what I’d describe (and have described in many articles and white papers) as an employee ambassadorship, or advocacy, approach, a contemporary, real-world measurement protocol which incorporates one of AON Hewitt’s elements: http://www.customerthink.com/article/linking_employee_behavior_to_customer_loyalty_advocacy
As stated in that article, “It is important to define the most active level of employee commitment to the company’s value promise, to the company itself, and to optimizing the customer experience. While linked to—but distinctive from—the productivity and empowerment elements of employee satisfaction, engagement, and alignment research, here, the emphasis is on strengthening bonds with customers, and creating positive transactional and long-term customer experience through employee interaction.”
Thank you both for your comments. I don’t think I disagree with your thinking. And while I didn’t explicitly call out the connection to customer satisfaction/experience, I think I’ve implied it through:
(1) My second bullet point at the end: “Communicating openly and being transparent about company performance and how employees’ contributions matter.” How employee contributions matter to company performance is without a doubt their impact on delivering on customer needs and all they do in support of that.
(2) Employees’ commitment to seeing the brand succeed… the brand cannot succeed without delivering exceptional experiences for customers.
Having said that, I don’t want my point to get lost here: this post is about the employees and their experience. It’s about leaders focusing on the wrong things and not starting where they should start. I’m a firm believer that employees should be put first, and with such heavy focus placed on customer experience, the employee experience is forgotten… or leaders fail to make the connection: if they want their employees to take care of their customers, they (leaders) must first take care of their employees.
So let’s define what that looks like. What does “leaders taking care of employees” look like?
…about how one company did it right, and succeeded. It’s “The Customer Comes Second” by Hal Rosenbluth and Diane McFerrin Peters (2002). Rosenbluth was the CEO of Rosenbluth International, a multi-billion dollar travel management company (which was later acquired by American Express). There are many excellent concepts and lessons which focus on employee development and performance.
Sorry, I’m not in the “employees first” camp. And I’m also not in the “customer first” camp. I think it implies a false choice that great companies don’t make.
Which comes first is like arguing about the chicken and egg. Or, which arm comes first – the right or the left. Or which of your kids is more important.
Leadership is about delivering value to all stakeholders, including customers, employees, partners and shareholders. Companies that put “shareholders first” didn’t win in the long term. Same goes for other stakeholders, if they are prioritized above all others.
When one part of the system is “first” then the others get less attention and eventually that undermines success.
All that said, the customer still is only one paying the bills, right? So even if leaders need to strengthen employee engagement, they need to keep that in mind that context.
Employee engagement, as defined by Gallup, is about the employee job satisfaction and commitment to the company. The importance of the customer is left unsaid. I think Michael’s concept of employee advocacy is more on the mark with what leading companies actually do.
Thanks, Michael. I recently bought the book (after quoting Hal a couple times in my blog!)… great book, for sure!
Annette 🙂
Thanks, Bob. I like Hal Rosenbluth’s statement (since Michael mentioned him) about putting employees “more first.”
But, to your point, it’s a chicken and egg (or egg and chicken) debate, for sure. And there are strong proponents in both camps.
Thanks for adding to the conversation. All great points.
Annette 🙂
1. Rosenbluth actually didn’t put employees first. The ‘customer comes second’ concept, suggesting that employees are first, was an attention-getting idea which was much more about having a contemporary, customer-centric Theory Y environment within the enterprise. What, as the corporate leader, he really did was to build and sustain a culture that recognizes the potential of employees and creates an atmosphere where they are supported in providing customer value.
2. As you note, and as I’d readily agree, in employee engagement the focus on customers is unspoken; and it is often an incidental benefit of job satisfaction and corporate commitment. I’ve written about employee advocacy, or ambassadorship, on multiple occasions; but here’s one of my CustomerThink blogs which both aligns with Bob’s point and gets to the heart of the concept: http://www.customerthink.com/blog/employee_ambassadorship_and_advocacy_living_the_promise_of_wow_customer_value_delivery_part_i
The “employees first” idea, when you examine what the company actually does, doesn’t hold up to closer scrutiny.
For example, Vineet Nayar, who is CEO of I.T. outsourcer HCL Technologies and author of “Employees First, Customers Second, explains in a 2012 interview:
“I am saying is by employees first you can actually deliver your promise of customers first. If you do not put the employee first – if the business of management and managers is not to put employee first – there is no way you can get the customer first.”
This has a whiff of circular logic. You must put the employee first to make the customer first? Apparently he means that employees create value for customers, so managers must focus on employees. It doesn’t mean (in my view, at least) that employees are more important than customers, or that you should consider employee needs out of the context of what customer value is being delivered.
Consider the fate of Groupon, where founder/CEO Andrew Mason was fired for a plummeting stock price and poor business performance, just 15 months after the second largest IPO in US history. Judging by office photos and YouTube videos, employees seem to be having a great time. Obviously, that wasn’t enough. In Mason’s resignation email, he acknowledged that a lack of customer focus was his downfall: “I let a lack of data override my intuition on what's best for our customers.”
As I’ve said, my issue with the EE and “employees first” slogan is that it’s overly simplistic and the customer value side is often assumed and unspoken. That’s dangerous.
At the recent CXPA conference, both Safelite and Rackspace executives spoke about the need to have engaged employees AND delighted customers. Ben Hart, Senior Director of Customer Loyalty at Rackspace, a company that prides itself on “fanatical support” by its employees aka “Rackers,” said the secret sauce for the company’s success was to “balance customer outcomes and employee engagement.”
Hi all, sorry late to the party. Couple thoughts…
Annette, I really like how you put the focus back on leadership. Although I’m probably most known for my work on “employee engagement” what I really focus on in my talks is how to be a “wholehearted leader” to drive employee engagement. The EE is the outcome of great leadership.
Also, I’m always fascinated by thoughts on who comes first, employee or customer. I had a partner/boss years ago, Rudy Karsan, who posed the question to the leadership team, “Who comes first? The customer? The employee? Or the investor?” It was a lively debate with all sides represented. Rudy stood and drew a triangle on the white board with the 3 constituents at the points, then he drew a circle in the middle and said he wanted to focus on all 3 equally.
I’ve run with this teaching myself for years. In fact, I call it the “ICE Triangle” (Investors, Customers, Employees), and while I try to balance the 3 equally, I must admit that the more I focus on talent issues, the more the other 2 items take care of themselves.
Kevin, you’re absolutely right. All three need to win.
One of my favorite companies is Intuit, where this is engrained into their culture. When the look at new opportunities, they strive for a win with all 3 stakeholders.
Results have been impressive:
Customer rate Intuit highly
Investors have doubled their money in past 5 years
Employees rank as a great place to work
It’s an integrated strategy, they don’t argue about what comes first. Thanks for sharing.