It’s clear that employee engagement is a crucial part of an organisation. Without fully engaged and happy employees, the company is going to suffer. If employees are happy then they are usually loyal and will do their best for the company they work for. David Liddle, CEO and Chief Consultant at The TCM Group, explains the importance of HR in boosting employee morale.
The link between employee experience, customer experience and profitability is well established. Research from US management consultancy, Bain, has shown that companies with highly engaged employees grow revenue 2.5 times more than those with low employee engagement. To quote Richard Branson: “Loyal employees create loyal customers who create happy shareholders.”
The role of HR in ensuring this golden thread runs throughout the business is, however, less researched and discussed. My experience suggests that in many organisations, there is a disconnect between people professionals and the marketing, sales and product teams who are seen as the ‘go-to’ when it comes to delighting customers and getting the tills ringing.
So what exactly can HR professionals bring to the party, and how can chief experience officers benefit from a closer relationship with their people and culture colleagues?
Employees as customers
Aligning an organisation’s Employee Value Proposition with its Customer Value Proposition is central to creating an engaged, productive and healthy workforce. A happy, harmonious workforce will be more enthusiastic, productive, in tune with customer needs and willing to go the extra mile to deliver outstanding customer service.
Ted Stone, Managing Director of the Customer First awarding body, who I interviewed for my recent book, Transformational Culture, explains it well: “Your employees are the most important asset within your organisation. Make sure you treat them this way,” he said. “You can have the most fantastic product or service offering in your market segment, but if you have staff who feel overworked or undervalued, it will consistently degrade the customer experience. People buy from people – make sure your staff are valued and they will value your customers.”
Forward-looking HR professionals are increasingly recognising that one of the best ways to achieve this alignment is to view their employees as customers themselves. Employees are consumers within their own workplace. They consume leadership, internal culture and the HR processes (such as performance management systems, rewards and benefits and disciplinary and grievance procedures) that shape their daily work.
It follows, therefore, that organisations need to treat their employees with the same care and thoughtfulness as they do their customers. This means designing their HR processes as meticulously as they design their customer-facing products, constantly seeking feedback and refining their offer.
This approach reflects the Employee Experience Equation (otherwise known as ‘Liddle’s Law’) that I designed to support organisations which want to develop fair, just, values-driven and people-centered cultures.
As the above diagram shows, the equation posits that an organisation’s initiatives to improve wellbeing, engagement and inclusion are influenced by the effectiveness of its people policies, management processes and organisational procedures. This foundation is then multiplied by the efforts of supervisors, managers and leaders to cultivate happy, healthy, harmonious and high performing workplaces. The resulting outcome provides a measure of Employee Experience (EX).
Applying product development principles
Many of the companies I work with are starting to apply product development principles – such as Kaizen and Agile – to the design of their HR processes. In practical terms, this means developing workplace systems, processes and behavioral frameworks in dialogue with the employees who are consuming them – asking questions about their daily experience of working life, what would make it better and would allow them to do their jobs more effectively.
Drawing on best practice design thinking, these organisations are also focusing on the User (in this case, employee) Experience. It’s akin to the way a business would typically seek feedback from its customers, through their website, call centre, distribution centre or via TrustPilot reviews. Replicating this approach internally means actively seeking and encouraging employee voice and giving people more agency in the development of the company’s HR systems.
Deploying power with employees, rather than power over employees, not only ensures HR processes are fit for purpose, but also provides valuable data about how these processes could continue to evolve and improve. It gives employers a valuable opportunity to address key questions, like where are processes not working, where are the sticking points and what are the challenges?
Engaging employees in this way provides a groundswell of innovation and creativity – and as we know, if people have been involved in the creation of any initiative or process, they are much more likely to become enthusiastic adopters.
The introduction of a Resolution Framework (an alternative approach to resolving workplace conflicts, complaints and concerns) at insurance company, Aviva, is a prime example of how this approach helps to bring EX and CX closer together.
“The introduction of TCM’s Resolution Framework changed the whole concept and dynamic of managing conflicts and complaints within the workplace,” said Anthony Fitzpatrick, Head of Colleague Experience and Employment Policy. “Culturally, the change in language and emphasis have been so important. We aren’t focusing on being aggrieved. We are focusing on resolution and that is a fundamental difference. We have seen that the vast majority of cases are settled either at triage or through a facilitated conversation. This allows everyone to focus on their job and increases morale and motivation, which is good for personal wellbeing. It’s good for the business and it’s good for the customer too.”
In a recent Harvard Business Review article, authors Gautier, Bova, Chen and Munasinghe share research which highlights the strong link between employee experience and customer experience. They highlight, in particular, the importance of empowering HR professionals to make the case for recognising that customer-facing employees matter immensely to business success. “They are not simply a cost to be minimised – as retail, call centre and service employees are far too often thought of by executives – but potentially very high impact investments,” they said. “How much is it worth to your organisation to reduce turnover of top talent by 20%? How about to improve employee satisfaction scores by 10%? How much is it costing your organisation not to know these answers?”
It’s time for HR and chief experience officers to step out of their silos and look at how they can work together in pursuit of a common aim. The shift in mindset is simple, but its impact can be transformational.