4
Rethinking Employee Engagement
Unifying a Diverse Team
It seems self-evident that diversity is good for beauty companies given that they want to sell hair coloring, skin care, and other beauty aids to women of every ethnic makeup. To that end, one of Bluewolf's recent clients (anonymized for privacy) issued its first diversity report at the end of 2015 noting inclusion of people with disabilities and, most important, inclusion of people of diverse social and ethnic origins. In the report, the company's chairman and CEO declared that the “management of diversity is a strategic lever for us. A diverse workforce in all functions and levels of a company enhances our creativity and our understanding of consumers, thus allowing us to develop and market products that are relevant to their expectations.”
When it comes to diversity, this beauty industry company is actually looking beyond its direct staff. It is cultivating a cadre of independent hairstylists and colorists who will teach customers and others the techniques and use of their products. Once women all over the world understand how best to use hair coloring and makeup and other beauty aids for their skin, hair color, and personal tastes, they will be more likely to not only buy this company's products but buy the right products and be more satisfied with the results.
To me, this sounded like a great strategy. There was only one catch: the company needed tools that would help this large and diverse workforce, not all of whom were direct employees, access the same information. They were already off to a good start, but needed some improvements. They had a digital sales aid from Salesforce, but they weren't happy with it. To begin, it only did content management and even then, it wasn't integrated with data.
The company also needed the tool to support its growing community of what it referred to as “hair artists,” elite hairstylists, about 1,000 worldwide, who teach classes and show how best to use company products. These are not direct employees, but freelancers who teach their products to the women around the world who will buy and use them.
Unfortunately, their hair artists were running about 200 functions in a given week. This was far too much to handle, especially when many of those instructors weren't even the company's own people. So, we created an app to make it easier to use those core functionalities, and we mobilized it so the instructors could run it on their smartphones.
The results were exactly as we intended. Sales reps are getting the latest info on the customer before they make the call. Also, inputting data into the system is much easier and the resulting reporting, too, has become much better. Finally, the independent elite hair colorists can easily get the info they need to appropriately guide their customers on the best use of the company's products.
Workers Matter to Success
This beauty company's experience proves an often overlooked issue: your workers, whether direct employees or not, matter to the success of your business initiatives. You need to cultivate this incredibly valuable yet overlooked asset. Such assets are overlooked because management often takes them for granted; we're paying them, so they will do what we say. This chapter will show how wrong that assumption actually is.
Even within the Salesforce community, employees are clearly attracting new attention. In the latest Bluewolf State of Salesforce Report, 2015, one-third of the companies cite an employee-facing initiative as one their top three priorities for 2016 (Figure 4.1). That goes hand-in-hand with other data from the study showing companies are three times more likely to attribute measurable business outcomes to the use of tools that make the jobs of their employees easier. Now it seems employees have become prime targets for the deployment of advanced technology. I consider that a major step forward.
Figure 4.1 The State of Salesforce 2015–2016
It wasn't always so. I remember when companies employed one of two approaches toward their workforce:
- Old way: Employees were generally regarded as unthinking cogs who did as managers directed. Discipline was rigid, there were few incentives for initiative or creativity, and, maybe most telling, employees had no input. Okay, maybe a little in rare organizations, but by and large, managers dictated the way the game was played and employees were expected to be happy they had a decent job.
- Compare this to today—now employees in many organizations are empowered to take action, show initiative, make decisions, and generally engage their minds. Collaborative initiatives are welcome, employee input is seriously considered, and companies award appropriate incentives for actions that advance the organization's goals.
Clearly, we are witnessing a significant evolution in the workplace and among the workforce. Maybe it's not happening everywhere, at least not yet, but this evolution is already under way. And you should expect it to continue and build momentum going forward. The workplace and the workforce are definitely changing fast.
The change can't come fast enough for companies that intend to succeed. The Gallup organization has been collecting the largest body of behavioral economic data in the world on workplace trends. Its singular conclusion: miserable employees create miserable customers.1 The author, Jim Clifton, chairman and CEO of Gallup, puts the result in terms of the Six Sigma quality language around defects. (In case you missed it, Six Sigma was a response to Japanese quality gains in manufacturing a couple of decades ago and is still in practice in many businesses today.)
To translate Gallup's conclusions into Six Sigma terms, Clifton writes: “A miserable employee, particularly a miserable manager, is a defect—a defect for the company and for the customer.”2 A defect in Six Sigma thinking must be avoided at all costs.
Clifton's book really focuses on the creation of what he considers good jobs at the macroeconomic level, but in the process he points out some smart things about handling workers on the immediate day-to-day business level. For example, he refers to extremely miserable employees as actively disengaged, actively because they encourage coworkers to disengage as well. Bluewolf is not a Six Sigma operation, but we strive to have satisfied, productive employees who are fully engaged, the exact opposite of Clifton's actively disengaged worker.
In the book, Clifton identifies three types of workers: engaged, not engaged, and actively disengaged. If you are striving to deliver an exceptional customer experience, you want engaged employees. For those not currently engaged, you can turn to gamification and other techniques to engage them. Lastly, you need to identify and replace the actively disengaged employees as quickly as possible before they infect your engaged workers and, worse still, degrade the customer experience for your customers. To give you a sense of employee engagement across the United States, see Figure 4.2.
Figure 4.2 Gallup Employee Engagement Statistics, 2015
Employee Engagement (or Lack Thereof) and Productivity
Gallup estimates that 50.8 percent of the U.S. workforce is not engaged; not actively disengaged, mind you, but still not engaged. You know them and probably work with them, suggests Clifton. They have no concern about customers, productivity, profitability, waste, safety, mission, or the purpose of the team. Mainly, they are thinking about lunch or their next break. Surprisingly, these aren't just the obvious goof-offs. Some, Clifton points out, may be sitting on your executive committee.
Then there are the actively disengaged employees. According to Gallup, they have more on-the-job accidents, cause more quality defects, and contribute to theft, euphemistically referred to as shrinkage, all of which cost the organization. In the process, they are sicker, miss more days, and quit at a higher rate. In short, they just add up to more and higher costs. Says Clifton, “When you are in a meeting with nine other people, odds are that two of them are taking notes to make damn sure whatever you're planning doesn't see light of day.”3 Next time you're sitting in a meeting, see if you can identify the actively disengaged coworkers.
That leaves the remaining 30 percent—your engaged employees. They are the builders of the organization and the creative force behind everything good that happens in the company. And, something particularly dear to me at Bluewolf, “they are the only people in your organization who create new customers.”4 (Keep Gallup's employee classification in mind when we get to Stan Slap's discussion of your employee culture later.)
Gallup calculates that “if twice as many American workers scored high on its frames of mind quiz it would create sudden significant change; it would generate more rapid job growth than anything else.”5 It would also double innovation and double entrepreneurship.
The best of these employees, not surprisingly, have higher customer metrics, higher productivity, and higher profitability. Expectedly, they also have lower absenteeism, lower turnover, less theft, fewer accidents, and fewer quality defects, ranging from 25 to 60 percent less.
Employee engagement, to me, is more predictive of a company's success than almost any other independent factor. If your employees are not engaged, you can bet your customers aren't either.
Understanding Employee Culture—Critical to Business Success
Are you aware of your organization's employee culture? Can you describe it in a few key phrases or a sentence or two? If you can't, then ask a few employees to describe the employee culture and hope they will be at least a little bit frank with you. Understanding your employee culture is critical to increasing the amount of engaged employees working for you, moving the not engaged to engaged, and weeding out the actively disengaged.
Every organization with employees has an employee culture. As a manager, figuring it out is not always straightforward, and it can shift as the organization changes, especially as things shift in the executive and middle to uppermanagerial ranks. But there are constants you can be sure of with any employee culture. By the way, theoretically managers, too, could be part of the employee culture, but don't fool yourself; there are limits to how accepted even a low or midlevel manager will be.
In addition to constantly observing you, the manager, your employee culture is focused on security, self-protection, and predictability. Security could be immediate job security or a more generalized security revolving around the future of the company. Self-protection deals with concerns about the reasonableness or arbitrary nature of management decisions. Predictability is also related to the arbitrary nature of company decision making. Will unexpected decisions pull the rug out from under anyone or everyone? The employee culture is highly tuned to this question in the most nuanced way. Stan Slap, a noted business management consultant and author of Under the Hood, a book exploring employee culture, writes: “Your customers are employees somewhere, too, so they belong to the overall employee culture. They will protect or reject your company in part based on how they perceive your company treats people just like themselves.”6
What this means is that contrary to whatever you learned in grad school earning that shiny MBA, you are not going to have control. You don't have control until the employee culture temporarily grants some measure of it to you. If you haven't figured this out yet, heed the wise words of Stan Slap: “If your employee culture wants something to happen in your business, it will. If it doesn't, it won't.”7
The employee culture is always wary, highly skeptical, and constantly monitoring your every move and those of every other manager to collect the smallest, most nuanced bits of information to sift and analyze and decide whether or not to play along, how much, and how enthusiastically. It will decide hour by hour, even minute by minute how credible and trustworthy you are. With every utterance and action, your credibility is at stake.
Slap still says it best: “An employee culture exists to protect itself. . . . It is an information gathering organism, designed to ensure its own survival.”8 Expect the employee culture to resist change and drag its feet until it has been thoroughly convinced. Although it is possible to win over the employee culture, at least temporarily, it can be lost in an instant, too. All it takes is one decision that contradicts what you say. Imply that a decision you want implemented will not result in any layoffs and then lay off a few people and you are toast. To paraphrase Monopoly, don't pass go and don't collect $200. The best you can do is to start trying to build credibility all over again—just don't blow it this time.
You can win over the employee culture and enlist it to execute change. Per Slap's advice, it will take honest, full disclosure of what is and is not changing. Try to arrange what is not changing to be recognizably greater than what is changing. Then embark on a 90-day path to get there, preferably in small steps, and “light the unknown road ahead a little bit at a time—as if you were holding a lantern down the darkened path, allowing the culture to see far enough ahead to proceed at least that far with confidence.”9 Employee culture, change averse in most cases to begin with, is not likely to embrace a big bang approach to new initiatives. If you have to do something like that, prepare it well in advance, telegraph every move, and then do it exactly as you laid it out.
Case for Employee Engagement
You've already learned that some types of employees can damage your business, especially customer relationships—a vital priority—and new strategic initiatives. Every employee relationship incurs monetary and nonmonetary overhead that must be addressed in one way or another. Even your best employees create headaches; they have lives, which can impact the business in big or small ways. They can have a sick child, be going through a divorce, or be dealing with an aging parent; situations like these invariably impact their work and, consequently, the business. Such things happen to everyone, and must be considered as part of the normal employee overhead. And I haven't even started to list the personal foibles and such that can disrupt the workplace. As a manager, you just have to be prepared to make whatever adjustments and accommodations are necessary to keep productivity high and the workplace operating smoothly.
That said, it is always best, within reason, to accommodate the human shortcomings that will assuredly upset your best workforce plans. There are a variety of good reasons for this, starting with these two:
- Keeping a productive worker going through a rough patch is easier and cheaper than finding and training a replacement and waiting for them to become productive.
- The need to maintain the value of customer engagement and those employee relationships can be critical. We have talked about the lifetime value of customer relationships, but there is also the lifetime value of a productive employee and the employee's role in customer satisfaction. Think about it.
Up to this point, I've only been talking about good employees. The cost of nonengaged employees or actively disengaged employees presents an entirely different problem. According to Gallup, actively disengaged employees—the least productive—cost the American economy up to $350 billion per year in lost productivity.10 Some slice of that is coming directly out of your pocket and impacting your bottom line.
How bad is the situation? Let's recap Gallup's engagement statistics. According to Gallup, only 32 percent of the U.S. workforce is actively engaged. Of the remainder, 50.8 percent are not engaged and 17.2 percent are actively disengaged, which Gallup identified as a costly defect that you want to minimize and then remove.
After analyzing the survey data, Gallup came up with two rules managers can count on:
- Employee engagement = customer engagement. Which, by the way, is the gospel here at Bluewolf.
- The best predictor of sales growth is employee engagement.
That should tell you why, along with customer experience, now is the time to elevate employee experience to a comparable level.
Employee-Facing Initiatives
The simple reality today is that companies don't place enough emphasis on the employee experience. Too often, the employee experience is at the bottom of the corporate priority list, despite being such an important predictor of customer engagement and sales growth.
That mind-set, however, seems to be changing. In our latest State of Salesforce Report, one-third of the companies named an employee-facing initiative as one of their top three objectives in 2016.
Company management is finally getting it; they now understand that investing in employees is an investment in a company's bottom line. The place to begin is to improve the overall employee experience by first simplifying time-consuming tasks. This will enable your employees to spend more time with customers.
Managing your company employee and management culture is your next task. This is not just a mission statement. Rather, it lays out a set of beliefs that shape how you interact with and support your employees and support your brand promise. While you're at it, remember to keep faith with whatever you have promised to the employee culture.
According to Stan Slap, that means, first and foremost, being consistent in good times and bad. The first thing employees look for is whether these values go out the window in times of stress. The number one critical mistake you can make is to ignore, abuse, or violate commitments as perceived by the employee culture.
Employee Heaven or Pressure Cooker
A few companies have a vision for the kind of employee experience they want and act on it. Netflix, the online video-streaming giant, certainly is one. It has created a unique and, to many, an enviable employee experience. Netflix employees have unlimited vacation, expense without manager oversight, and don't have regular performance reviews.
A few years ago, many people reasonably questioned how long Netflix might survive. Its industry—film and video distribution—was in upheaval. It needed to convert millions of customers from its old delivery model, which relied on physical DVDs sent via the mail, to a new online streaming model. It also needed to navigate a change in pricing and its pricing model, which it initially bungled.
Now the company has emerged as the poster child for the modern cloud-based innovative company. Its streaming platform is the envy of many, and its customer base is heading into the stratosphere (by the end of 2014 it had over 69 million streaming subscribers and was still growing).11
Its employee experience certainly is attracting attention, although there haven't been reports of other large companies flocking to adopt it in full. At Bluewolf, we have borrowed ideas from the Netflix approach. For example, we share common values like embracing and encouraging autonomy. We're also open to employee-led initiatives and ideas and a flexible vacation policy. But we still have midyear and annual reviews, although those aren't necessarily focused on culling the herd. We actually work hard to retain employees. I'm not saying we don't let people go when their performance is subpar, but our primary focus is on employee enablement and retention.
One thing I particularly like about the Netflix employee experience is their cultural transparency and how they actively seek employees who affirm and contribute to it. At Bluewolf, we understand the importance of a mutual cultural fit, especially when it comes to teamwork and workplace camaraderie.
That said, the Netflix approach isn't ideal for everybody. It puts a lot of pressure on employees to perform in an environment that appears to have no limits. Sure, they can take vacations when they want, but is that time off truly relaxing? I wonder how many of their high achievers take tablets and laptops with them on vacation and respond to e-mail? If you know, clue me in.
Creating a High-Energy, Customer-Aware, Employee-Driven Workplace
The real question becomes: how can you build a customer-aware, employee-driven workplace? The trick is to use your employees to influence those who can impact your target customers. It's actually not as hard as it may seem. Here are six steps to get you started:
- Build a social-powered collaborative workplace.
- Encourage your employees to own innovation in the workplace.
- Leverage gamification to influence and stimulate employee behavior.
- Empower all employees to own the customer moment.
- Ensure employees have a stake and a voice.
- Make sure employees know how and why their work is important and how it contributes to the overall customer experience.
The last point is the most important. Every employee should own the customer moment and understand how each encounter adds to or detracts from the customer experience. Obviously, you want to make sure it adds to the customer experience. To that end, set up systems to make it is easy for your teams to collaborate with each other and with customers. There are many systems to do this; we use Salesforce and Chatter, but there are others out there.
Beyond that, encourage diversity of people and ideas. It's surprising how often managers work hard to set up a racially or gender-diverse workforce, but forget about diversity of ideas. If everybody thinks the same way, you won't get unique ideas, which are critical for innovation. Proactively source diverse talent and ensure projects are staffed by a variety of employees. Otherwise employees, if given the choice, are likely to gravitate toward projects with like-minded people. And there goes the value of diversity.
Ensure managers know they are responsible for the makeup of your organization; actively work with them to ensure that diverse perspectives are well represented. This isn't to avoid the ire of the PC police. Diversity breeds creativity and better problem solving, and that is what this really is all about. You can best accomplish this by setting the example with an open-door policy.
It also helps to encourage a culture of helpfulness. Employees must feel comfortable reaching out to coworkers for help, regardless of team or project. You can use gamification to reinforce these behaviors and reward helpfulness as you saw in the previous chapter. Similarly, use gratitude and appreciation to reinforce and reward desired behavior. As previously noted, even a simple thank-you can go very far in this regard.
Finally, you want to encourage sociability. That doesn't sound very productive at all, more like just hanging around the water cooler. As it turns out, it is more productive than you can imagine.
Super Chicken
Ever hear about the super chicken? It became a legendary TED talk video you must watch.12 In the video, presenter Margaret Heffernan looks at what makes some teams more successful than others. This is a problem with which every manager wrestles. For decades, we have believed that team success is tied to superstars. Superstars win sports championships and the Super Bowl, superstar programmers build awesome new innovative products, and on and on. Well, the super chicken experiment proved that wrong.
In the super chicken experiment, researchers took a normal group of chickens and watched their productivity over a number of generations, measuring productivity by the number of eggs each chicken laid. After a period of time, they separated the very best egg producers—your all-star chickens or super chickens. These were put into their own group. The researchers counted the egg productivity of the super chickens and compared it to the normal group. They expected the super chicken group to greatly outproduce the normal group. They were surprised to discover super chicken productivity did not surpass the normal group but was shockingly dismal. As it turns out, the top super chickens pecked the others in the super chicken group to distraction or even death. They were aggressive, disruptive, wasteful, and worked to suppress the rest—sort of like Gallup's actively disengaged workers. These super chickens weren't just sitting on their eggs, but were actively disrupting any productive efforts of the other chickens in the super chicken group.
The lesson here (I will resist the temptation to say don't count your chickens until they hatch) is to not count on superstars to carry your team. Subsequent research (not among chickens but human teams) showed the most success came to teams that were characterized by empathy and social sensitivity to one another. The best teams, it turns out, were those that shared the most social connectedness among the members of the team. Maybe our grandmothers were right all along about being nice, sharing, and playing well with others. As it turns out, those traits will indeed produce the most successful teams. As for the lone wolves and superstars—leave them to do their own things and tap them only when you really need their special talents. Better still, focus on recruiting talented, team-oriented, and collaborative employees.
How can any author follow the super chicken example? Instead, I will just rattle off, admittedly at risk of sounding like your mother, the remaining important things to consider or do to create a successful team:
- Engage your direct reports regularly. You cannot facilitate teamwork and collaboration if you are kept in the dark about their initiatives and progress.
- Improve the employee experience to improve the customer experience.
- Use employee shadowing to baseline and measure improvement. (Employee shadowing is a technique where you spend a day right alongside an employee for the purpose of learning how he or she works and how you can help.)
Truthfully, there is no magic secret to improving the employee experience. You have to invest both time and money to ensure an excellent employee experience. That takes many forms, such as personal attention, creativity, sincere interest, good tools, and more along the same lines. Anything that comes from you as a manager, be it information, a compliment, or personal connection, takes on heightened value and importance. Remember, the employee culture is constantly monitoring managers for any signs that may address their key concerns. Yes, you are living in a fishbowl. If that's the case, try to take advantage of it to reinforce your bridges to, and credibility with, the employee culture. It will pay dividends in many ways, often when and how you least expect it.
Strategies to Improve the Employee Experience
A great employee experience demands more than great vacation perks. Your employees value investments in training, tools, and their well-being. Here are some additional tactics and tips to get you started:
- Invest in ongoing training and credible communication.
- Provide appropriate and modern tools.
- Think mobile-first—your priority should be making your employees' jobs easier. Enable your workers with mobile tools, data, and applications to keep them up to speed and on track.
- Express appreciation, both verbally and experientially. Employees who feel valued show it through their work, their customer interaction, and how they speak about their job to outside friends and family.
- Create a culture of feedback and transparency.
- Give honest, consistent evaluation to take the guesswork out of performance evaluation.
Above all else, keep employees informed—doubts like “Will I get my bonus?” or “Am I getting promoted?” can reduce employee effectiveness to the point where it begins to impact the customer experience. It is easy to avoid simply by keeping people informed.
Employee Engagement Has a Direct Impact on Your Profitability
The more engaged your employees are, the more efficient and productive they will be and the more successful you will be. In the same way, digital cannot and should not be your only avenue for building up a positive employee culture and experience in your organization. Don't underestimate the power of face-to-face communication between coworkers and managers/employees. That's why there are pizza and beer gatherings on Friday afternoons.
However, not everything has to be a pizza and beer social. Host events in the office, line up professional development classes, set up off-site summits—anything to get your employees together. Such contact, professionally and socially, is invaluable in building bonds between your employees and creating goodwill and trust toward management and the company itself. And don't forget to include your customers at some of these events.
International Data Corporation's recent Experience Survey 2015 stated “the ability to link both employee and customer experiences together in order to deliver a holistic view of digital and social transformation is at the epicenter of competitive differentiation.”13 While enterprises must approach their business strategy through a customer-obsessed lens, they cannot successfully drive digital transformation or create unique customer moments if their employees are unmotivated and bogged down by old, clunky technology. These factors hinder their ability to engage with customers and excel at their jobs.
Companies need to put more accountability, authority, and information into the hands of employees who are closest to their products and customers. When employees have access to tools that improve the quality of their work lives, they can service clients in the moment. Businesses that provide opportunities that incentivize and reward this important work also reduce the barriers that prevent deeper engagement at work and with customers.
Let's end this discussion with this simple fact: 69.4 percent of companies are designed around a common goal: improving their business by elevating both the employee and customer experiences. Companies that invest in deepening that engagement through well-defined strategies will ultimately reap long-term benefits that are felt throughout the organization and seen through measurable business results.