The Engaging Organisation: How To Link The Voice Of The Employee And The Voice Of The Customer

Read the full white paper this blog is based on here.
We all need to engage. Whether you are a parent or teacher trying to engage with children or students, a politician trying to engage with constituents ahead of the election or an enterprise trying to engage with your stakeholders, making a connection with your target audience is vital.

How organisations work…TheEngagingOrganisation_ConfirmitEventPaper_v3

It is particularly important for organisations. And it is essential with two critical audiences: employees and customers. The two are intrinsically liked via the business itself. As I’ve explained to my own kids when they ask “Why do you go to work, Dad?”, it’s quite simple:

  • People go to work in order to make a living and, hopefully, to enjoy what they do very day;
  • As part of their work they will, in some way provide services or products to customers who, in turn, pay the business for those services or products;
  • In turn, this helps the business to be able to develop and pay its employees for their work (allowing them to become customers of other businesses as they spend in the broader economy; oh, and to pay out pocket money!).

In simple terms, there is a “service-profit chain” going on: engaged employees make for engaged customers and, in turn, those customers help organisations to sustainably grow and stay in business as both producers and employers.

How organisational metrics (often) don’t work…

However, while there is a natural linkage between these parts of the service profit chain, organisations are notoriously terrible at measuring them in a joined-up way. In most organisations measurement happens in silos:

  • The HR function measures the people stuff: talent attraction and retention, employee engagement, productivity rates, sickness and absence and performance metrics;
  • The marketing function measures the customer stuff: customer satisfaction, customer loyalty, net promoter scores, spend and share-of wallet;
  • The finance function “counts the beans”: revenue, profitability, cost control, growth rates, earnings per share

So some great data is gathered in each function but these data are rarely integrated or connected in a meaningful way. This is one of the biggest frustrations I see amongst our CEO clients: why can’t I get a joined-up picture of our people, our customers and our financial performance? And why can’t I asses the linkages and critical connections between them?

What can help?

To get over this, organisations need to do several things differently:

  1. Define employee engagement in a different way
    • At present, most firms’ definitions of employee engagement are too narrow. They are “pure-play” HR lenses on employee engagement and revolve around issues such as: “do you like working here?”; “do you want to keep working here?”; “does it make you feel proud to work here?”; and “would you tell others to come and work here?”. This “great place to work” element is an important part of emplTheEngagingOrganisation_ConfirmitEventPaper_v2oyee engagement. However, on its own, it is not enough. Firms also need to add elements such as: are employees engaged with providing customer service excellence?; and are employees engaged with helping us to deliver the strategic objectives or growth targets of the business? These latter elements are almost always missing. Without them, you are simply not measuring the things that matter when it comes to employee engagement. Nor are you likely to find strong linkages between your employee and customer experiences to help drive financial performance

 

  1. Integrate your metrics and your analytics
    • Most of the metrics gathered by organisations are analysed and reported in silos. To help get an integrated picture, these walls need to be broken down, both politically and technically. Politically, it requires HR, Marketing and Finance to collaborate on how they design, collect, analyse and report their data. Technically, firms need to move away from just reporting flat, descriptive data and towards more sophisticated ways of modelling all of these data sources together in a causal ad predictive approach. For example, your analytics need to be able to answer questions such as:
      • If we raise employee engagement by 10 points, what will the impact on customer satisfaction be?
      • If we raise customer loyalty by 5 points, what will the impact on business-unit level revenue growth and profitability be?

 

  1. Use “joined up” dashboards
    • Finally, you need to find more unified ways of reporting the key data from your research. For example, you will need to introduce more “live feed” data dashboards which show critical employee, customer and financial metrics in the same place. These need to show, for example:
      • How employees and customer s feel about critical parts in the customer journey: while employees might feel positive about the sales process, customers may not; while customers feel positive about the aftersales process, employees may feel improvements could be made through simple tweaks in systems and processes.

Show me the money!

So where‘s the proof? Two quick examples of where firms have linked their VoE and VoC programs together illustrate the enormous benefits that such a “joined up” approach can bring:

Firstly, in a global professional service firm, we identified three key factors which helped employees to feel enabled to provide excellent service to their accountancy, tax and consulting clients:

  • Did employees understand the role they were supposed to play delivering great service?
  • Did employees have enough flexibility in their role in order to deliver great service?
  • Did the firm ensure the right people were involved in client projects to ensure exceptional service levels could be delivered?

This involved a simple key driver analysis to help the firm understand better how it could enable and equip its people to provide the best possible service. In areas of the organisation where scores on these three enabling factors were highest, clients were 35% more likely to recommend the firm’s services and 23% more likely to use more of the firm’s services in the future.

Secondly, in a FTSE 100 retailer, we helped the company to look at the impact which employee engagement had on customer service on a store-by-store basis. Looking across a sample of 900 stores, we found that:

  • in the highest engagement stores, only 18% failed to hit their very strict customer satisfaction targets
  • whereas, in the lowest engagement stores, fully 64% failed to hit these targets

This involved a more sophisticated approach to linkage analytics: knitting together employee/people data sources, customer metrics and financial data into one integrated data set and then using structural equation modelling and causal path modelling to identify the relationships between the employee engagement and customer satisfaction variables. This takes planning, co-operation and smart reporting. But the impact, when done well, can be huge.