Why bother investing in employee experience? Who cares about culture, technology, the physical work environment, and this weird thing called a Reason for Being? Is there really any value to investing in employee experience and becoming an Experiential Organization? As it turns out there is—a lot of it.

Before going on let's do a quick recap of the nine types of organizations so that you can easily reference the list when reading about and seeing the comparisons.

• inExperienced—Poor at culture, technology, and physical space
• Technology Emergent—Good at technology, poor at culture and physical space
• Physically Emergent—Good at physical space, poor at culture and technology
• Culturally Emergent—Good at culture, poor at physical space and technology
• Enabled—Good at culture and physical space, poor at technology
• Empowered—Good at culture and technology, poor at physical space
• Engaged—Good at culture and physical space, poor at technology
• preExperiential—Good at culture, technology, and physical space
• Experiential—Amazing at culture, technology, and physical space

Throughout this section I will also reference nonExperiential Organizations. These comprise all the above categories except the Experiential Organizations (eight categories above). In other words, every organization except for the top 6 percent makes up the nonExperiential group.

To figure out the business impact of employee experience, I looked at four things. The first was anecdotal and observational data that executives shared with me. I had quite a few executives tell me that they observed a more productive workforce, a larger talent pipeline, improved levels of innovation, increased morale, and the like. They didn't have solid data to show this, but they did see and experience it, which was still a positive piece of data to look at. The second thing I did was look at dozens of other lists and rankings of leading organizations to see whether Experiential Organizations appeared on those lists and rankings more often than organizations in other categories. For example, would an Experiential Organization appear on a most innovative company list or a best customer service list more often than any other category of organizations? Next, I looked at metrics around employee turnover, median pay, average profit, employee growth, and average revenue to see how Experiential Organizations compared to others. Last, I wanted to compare stock price performance of various categories of organizations against each other and against the Standard & Poor's 500 and the NASDAQ. Just for fun I also did a comparison of Experiential Organizations and Glassdoor's 2016 Best Places to Work list (for large companies) and Fortune's 100 Best Companies to Work For in 2016, which is based on data from Great Place to Work.

Before actually doing any of the data collection for this book, I had a hunch that companies such as LinkedIn, Cisco, Airbnb, and other Experiential Organizations would score high on the Employee Experience Index. I've visited their offices and spoken with their executive teams, so I was aware of the considerable time and investment that these companies were putting into designing employee experiences. I also believed that these companies should appear on various leading organizations lists (and rank higher) more often than other types of companies. However, with research and data analysis, you never really know what the outcome is going to be until you actually see the results. Fortunately in this case, the data showed that the Experiential Organizations absolutely dominate every other category of organizations.

Figure 11.1 below shows the comparison between Experiential Organizations and the other eight types of organizations. You can see how much more often Experiential Organizations appeared on leading lists for innovation, customer service, employee happiness, and employer attractiveness and on a few other miscellaneous lists I found. You can also see how Experiential Organizations compare on various financial and business metrics.

I sliced and diced the data all sorts of ways to compare not only how these nine organizations compare against one another but also how the single top category of Experiential Organizations compares against the other eight categories of organizations combined (simply called nonExperiential). I didn't include every single chart and comparison in this book because that alone would take up many dozens of pages.

For these comparisons you will see various numbers that represent multipliers. This means that if you see a number such as 3.8 it means that the Experiential Organizations appeared on the particular list 3.8× more frequently than the other categories of organizations.

Let's look at these areas in more detail.

CUSTOMER SERVICE

To start I looked at whether Experiential Organizations appeared on various customer service lists more frequently and higher up than other organizations. I looked at a few lists, including the 24/7 Wall Street Customer Service Hall of Fame rankings, Temkin Customer Service Ratings, and the American Customer Satisfaction Index. Experiential Organizations appeared on these lists 2× as often as every other category of organization combined. When comparing Experiential (the best) versus inExperienced (the worst) organizations, this number almost doubled. The lowest gap appeared between the Experiential and the preExperiential (second best) Organizations. In that case the multiplier was 1.3, still a considerable difference considering we are comparing the very best and the second best categories of organizations. Even a small difference can translate into many millions of dollars for the organization. Customers who receive better service oftentimes spend more and are more loyal to the brand. Not to mention angry customers usually cost the business more because it takes longer to help them—they are also more likely to share their unpleasant experiences with others.

As I mentioned at the start of this book, focusing on employee experience unlocks the discretionary effort of employees, which in turn allows them to provide better customer experiences, so I was glad to see a direct relationship between employee experience and customer service.

INNOVATION

I looked at Fast Company's Most Innovative Companies list, Forbes's Most Innovative Companies list, and Boston Consulting Group's Most Innovative Companies list. Experiential Organizations appear on these lists 4.5× more often than nonExperiential organizations (all the other eight categories of organizations combined). Again, when looking at the best versus the worst organizations, this number jumps to almost 7×. This is a whopping number. Clearly the organizations that do an outstanding job of focusing on culture, technology, and the physical environment are also able to innovate at a much higher level. This too makes sense because employees in Experiential Organizations are given the resources needed to bring their best ideas to work every day. Innovation is what leads to new products, services, and partnerships that allow an organization to remain competitive. It's no surprise that innovation is consistently ranked as one of the top priorities for executives around the world. Focusing on employee experience appears to be a great way to achieve this.

EMPLOYER ATTRACTIVENESS

There were many lists here that I had the opportunity to choose from, such as Glassdoor's Best Places to Work, CareerBliss's 50 Happiest Companies, Fortune's 100 Best Workplaces for Millennials, LinkedIn's Most InDemand Employers and Top Attractors, and Brandz Most Valuable Global Brands. Experiential Organizations clobbered every other category of organizations. Experiential Organizations appeared on these lists 6× more often than nonExperiential Organizations, 7.4× more often than inExperienced Organizations, and 2.6× more often than preExperiential Organizations. Employer attractiveness is a critical factor for being able to attract and retain top talent and helps contribute to a larger talent pipeline.

ADMIRATION AND RESPECT

This is very closely related and can in fact overlap with employer attractiveness, but I decided to make it a distinct category. Admired and respected organizations are not only more attractive to prospective and current employees, but they are also looked at as role models for people and other organizations around the world. These are the organizations that we all look up to and try hard to be a part of and have relationships with. Here I looked at lists such as Forbes's Best Employers, Fortune's Most Admired Companies, and Barron's Most Respected Companies. Experiential Organizations appeared on these lists almost 2× more often than nonExperiential Organizations. Looking at the data, it appears that organizations that invest in great experiences for their employees are also widely admired and respected. I don't believe this is a coincidence.

BRAND VALUE

How valuable is your brand? Forbes and BrandZ both have lists that measure and look at the overall value of a brand. Experiential Organizations appeared on these lists over 3× more often than nonExperiential organizations. Once again when looking at the best (Experiential) and the worst (inExperienced) categories of organizations, the best appeared on these lists a staggering 10× more often. Yet again it appears that organizations that invest in creating great experiences for their employees are able to build more valuable brands. This too makes sense because in these types of organizations employees are willing to do their absolute best to contribute to value. Being a valuable brand isn't just about getting the most customers or selling the most products. It's also about taking care of your people.

OTHER LISTS

These were some of the main categories I looked at, but there were many other lists that I used to see how much more often Experiential Organizations appeared on them when compared with other categories or organizations. Some of these other lists included Best Places to Work For Millennials, CareerBliss's 50 Happiest Companies, Massachusetts Institute of Technology's 50 Smartest Companies, Green Companies, Fortune's 50 Best Workplaces for Camaraderie, Fortune's 50 Best Workplaces for Diversity, and Workforce 100 (top human resources companies). In every one of these lists, the Experiential Organizations appeared on them between 2× and 11× more often than any other type of organization.

I also looked at a new list created by Salim Ismail based on his book Exponential Organizations. These types of organizations are defined as ones “whose impact (or output) is disproportionally large—at least 10× larger—compared to its peers because of the use of new organizational techniques that leverage accelerating technologies.” Ismail and his team devised a framework based on 10 attributes, and then they evaluated organizations around the world and created a ranking.¹ Naturally I was curious to see whether Experiential Organizations are also more likely to be Exponential Organizations. It turns out they are. In fact, Experiential Organizations appeared on Salim's list almost 40× more often than any other category of organization that I developed. This is a staggeringly high number, which leads me to believe that the only explanation here is that organizations that invest in employee experience are clearly making a dramatic business impact. It's also important to point out that Ismail's list of the top 100 Exponential Organizations also included much smaller companies, such as Indiegogo, which has around 100 employees; Tumblr with around 400 employees; and Reddit with under 100 employees. There are also plenty of organizations on that list that most people in the world have never heard of, such as Studio Roosegaarde, Enevo, and Yik Yak. I mention this because smaller organizations and start‐ups are notoriously known for being more disruptive, agile, innovative, and forward thinking. Still, despite being compared to some of these smaller organizations around the world, the Experiential Organizations dominated the competition.

But just to be safe let's also look at the financial and business side of things.