Getting the Employee Experience Right: Creating Employee Experiences that Drive Business Growth

As many businesses are beginning to look towards economic recovery, we’ve seen a growing recognition of the importance of the employee experience.   I suspect this may be a recognition of the vast amount of stress in the workforce.   For many companies, significant portions of the employee base are facing deep economic hardships.  Employees have been working harder than ever in an effort to keep their jobs and pick up the slack as their companies have cut positions and reduced spending.   As the economy and the job market improves, these employers may be facing latent turnover of some of their best people.

At the same time, companies interested in making more strategic investments to accelerate growth will need to have a highly engaged and aligned workforce.   Over the past several years, we’ve been working with a diverse set of of clients on a rigorous integration of customer and employee experience design.

Here is a summary of what we’ve observed and what to do about it:

Observations:

• The experience customers have with any organization is the product of behavior that emerges from a complex organizational system.
• Every organization is strongly predisposed to deliver the current customer experience based on deeply entrenched legacy effects, beliefs, values and unwritten rules. These legacy effects are reinforced by employee experiences at every level of the organization.
• Most customer experience efforts significantly underestimate the difficulty of shifting legacy effects. In some cases, organizations create a vision for the desired customer experience that is fundamentally at odds with the character and culture of the organization. As a result, their initiatives fail to produce a noticeable shift in the customers’ actual experience.
• Any effort to fundamentally improve the customer experience must first decode how and why the organizational system produces the current experience. This understanding allows executives to identify what changes are feasible and what specific interventions are necessary. Without this understanding, efforts to change the behavior of the organizational system are likely to be naïve.
• Delivering a substantially different customer experience requires a holistic, end-to-end perspective on the employee experience. Within that holistic perspective, targeted employee experience interventions must address and rewrite any “unwritten rules” that produce behavior inconsistent with the intended customer experience.
• By creating a strong linkage between the customer experience required to drive profitable growth and the employee experience required to generate this customer experience, a company can justify and prioritize investments in the employee experience.

Recommendations

• Describe the experience you intend to deliver to customers. Describe what customers are trying to accomplish and map the end-to-end activities customers follow to accomplish those things. Then detail the experience you want them to have. What do you want customers to feel after their interactions with you? What are the company’s ultimate goals for delivering a powerful customer experience beyond the transaction itself – for example, additional sales, word-of-mouth marketing?
• Identify the organizational and individual behaviors required to generate that customer experience. What do people and the organization need to do consistently to create the intended customer experience? What specific changes in behavior are needed? What must front-line employees do differently, and what decisions should front-line employees be empowered to make to solve customers’ problems? How do the work and behaviors of behind-the-scenes employees, plus their interactions with the front line, affect customer experience?
• Identify the business processes, practices and unwritten rules that have to change to produce the required behaviors. Diagnose how and why your company generates the current customer experience. This must be based on rigorous examination of the experience from your customers’ perspective. Identify where bottlenecks in service occur, where the smooth flow of customer interaction is interrupted. Measure alignment of customer-facing processes, roles, measurements and rewards, and surface the unwritten rules that drive individual and group behavior related to the customer experience. What exactly do the unwritten rules encourage people to do, and how do the resulting behaviors facilitate or interfere with the intended customer experience?
• Design specific employee experience interventions that remove the barriers and rewrite the unwritten rules. Map the end-to-end employee lifecycle and identify what your employees experience along the way. Model and segment employee populations, measure their fit with “ideal employee profiles” for different roles and correlate with customer experience and business performance. The appropriate interventions may be in how you attract, incorporate, engage, retain or enrich employees’ work. Because useful interventions can be made anywhere in the employee lifecycle, you must be rigorous in determining where to intervene and where to invest in employee programs. The goal is not just to design a compelling customer experience, but to enable employees to understand their connections with the customer experience and feel empowered to deliver the designed experience.

These observations and recommendations are described in more detail in the following white paper:   CI – Getting the Employee Experience Right 2011

You can also check out the following related blog posts:

• How Employee Experiences Drive Organizational Behavior
• Integrating Customer and Employee Experiences
• A Break in the Service Profit Chain: Why Increases in Employee Engagement Don’t Improve the Customer Experience
• No Matter What Business You’re In… You’re in the Hospitality Business

The Anatomy of Wow!

Over the past year, I’ve had the chance to post a wide range of thoughts on the ways that organization’s can leverage a deep understanding of their customers in order to design and engage customers in experiences that drive the growth of their business.  I recently took the opportunity to step back and reflect on the most important things I’ve learned over the past 25 years.  This post summarizes those most important things.  I’ve tried to make this concise… but will provide links to other posts that provide more insight.

 

Designing Influential Experiences

Wow Experiences exert a powerful influence on how people think, feel, decide, and act… because they’re designed from the mental model of the experiencer not the mental model of the provider.  Wow experiences create a high level of commitment, energy, and “word of mouth” by improving peoples’ lives.

1. Wow Experiences change how people feel and are designed from a deep understanding of what people desire.  People don’t buy products or services, they buy Desired States.  What Emotional Outcomes should the experience generate?
2. Wow Experiences deliver Innovative Solutions to people’s underlying, end-to-end problems. Finding these solutions requires getting below-the-surface of existing touch points.
3. Wow Experiences generate viral stories.  Prime the story people will tell around an influential Experience Storyline.
4. Wow Experiences resonate with the seemingly irrational ways people decide.  Design experiences that shape Preference Construction and overcome Behavioral Barriers.
5. Wow Experiences are pleasantly surprising.  Design a small set of highly differentiated Signature Experience Elements.
6. Wow Experiences are engaging and personal.  Enable people to Co-create and Personalize the experience, as well as, Influence and Collaborate with others.
7. Wow Experiences recognize everything communicates!  Eliminate negative cues and align positive cues to influence the story and how you make people feel.

 

Delivering Influential Experiences

Customers’ experiences with any organization result from the behavior of a self-reinforcing, deeply entrenched organizational system.  Traditional approaches to defining and implementing a new experience fail because they underestimate limits imposed by legacy mindsets, processes, systems, and culture.

1. Wow Experiences start with clear description of the intended experience – from the customers’ perspective. Align on an Experience Specification that describes the customers’ emotional & rational outcomes.
2. Wow Experiences rely on Experience Value Management to focus improvements on fundamentally shifting the economics of customer relationships.
3. Wow Experiences require shifting organizational behavior. Surface the Unwritten Rules that predispose the organization to deliver the current experience.
4. Wow Experiences require specific employee experiences not just “engagement.” Diagnose how employee experiences reinforce Unwritten Rules and design specific Employee Experience Interventions to shift those Unwritten Rules.
5. Wow Experiences require the holistic design of enabling Processes, Structures, and Management Systems.
6. Wow Experiences have a limited shelf-life. Continually Refresh and Preserve a differentiated experience.
7. Remember that, no matter what business you’re in… You’re in the Hospitality Business!

 

Here are a selection of links that provide some more insight into the points summarized above:

Why Customer Experience Initiatives Fail?

The Customer Experience Does Not Happen at Your Touchpoints

Cognitive Ergonomics: Designing Experiences that Fit the Customers’ Mental Model

Personae-Driven Customer Experience Design

Optimizing the Most Critical Elements of the Customer Experience: Customer Choices 

Cognitive Ergonomics: Customer Experience and Our Search for Meaning

No Matter What Business You’re In, You’re In the Hospitality Business 

Helping Customers Lose Wait

How Employee Experiences Drive Organizational Behavior

Integrating Customer and Employee Experiences

A key to delivering clearly differentiated and effective customer experiences is the holistic and deliberate design of the employee experiences that “generate” those customer experiences.

My colleagues and I have spent the last 25 years helping leading organizations design and deliver more innovative and differentiated customer experiences.  Over this time, we’ve developed a deep respect for how difficult it is to actually shift the behavior of the organization in a way that actually produces a different and noticeably better experience.  In fact, our greatest learning over the past decade is probably that the key to getting the customer experience working is to make very deliberate and targeted improvements in the employee experience.

This has little or nothing to do with making employees more satisfied or “engaged.”  We’ve seen many situations where more highly engaged employees just deliver a poor experience more enthusiastically.  I’ve already had a lot to say about that in A Break in the Service Profit Chain:  Why Increases in Employee Engagement Don’t Improve the Customer Experience.

If I were to summarize the key lessons we’ve learned about the integration of customer and employee experience it would include the following:

• The experience customers’ have with any organization is the product of behavior that emerges from a complex organizational system.
• Every organization is strongly predisposed to deliver the current customer experience based on deeply entrenched legacy effects, beliefs, values, and unwritten rules.  These legacy effects are reinforced by employee experiences at every level of the organization.
• Most customer experience efforts significantly underestimate the difficulty of actually shifting these legacy effects.  In some cases, organizations create a vision for the desired customer experience that is fundamentally at odds with the character and the culture of the organization.  As a result, most initiatives fail to produce a noticeable shift in the customers’ actual experience.  (See:  Why Customer Experience Initiatives Fail?)
• Any effort to fundamentally improve the customer experience must first decode how and why the organizational system produces the current experience.  This understanding allows executives to identify what changes are feasible and what specific interventions are necessary.  Without this understanding, efforts to change the behavior of that system are likely to be naïve.
• Delivering a substantially different customer experience requires a holistic, end-to-end perspective on the employee experience.  Within that holistic perspective, highly targeted employee experience interventions must be designed to address any “unwritten rules” that produce behavior inconsistent with the intended customer experience.
• By creating a strong linkage between the customer experience required to drive profitable growth and the employee experiences required to generate this customer experience, it becomes possible to create an economic model of the employee experience.  This economic model can then be used to justify and prioritize investments in the employee experience.

BSG Concours is in the midst of a multi-client research project titled “Employee Expeiences and Business Results” that will extend our thinking about how leveraging the link between employee and customer experiences.  I’ll have a chance to expand on this in future posts.

Human Sigma: Strong on Description; Weak on Prescription

I just finished reading the new book Human Sigma; Managing the Employee-Customer Encounter by John Fleming and Jim Asplund.  I’m excited that an integrated perspective on employees and customers is getting the attention it deserves.  The book is well written and makes a strong case for the importance of both employee engagement and customer engagement.  The authors are executives at Gallup and, as might be expected from an organization that’s sweet-spot is measurement, the book does a solid job of discussing the measurement of customer and employee engagement.

Unfortunately, I was disappointed with the book for three very important reasons:

• First, I’m concerned that the focus on employee-customer encounters will perpetuate a flawed belief amongst many executives that the solution to improving the customer experience is about fixing the behaviors of front line employees and managers.  Of course, what customers’ experience is often highly dependent on the interactions they have with front-line employees.  The authors do make a strong point about empowering front-line employees.  However, we’ve found that customer experience shortfalls are almost always a result of organizational issues that are closer to the core of the business.  In most cases, the behavior of the front line employees is just an outward expression of organizational conditions and culture that have deep roots in the beliefs, values, leadership, and legacy of the organization.  Visualize a tree; addressing front-line employee behavior is like hacking at the leaves rather than striking at the root of the problem.

• Second, the prescriptions described in the book include conducting ongoing Human Sigma measurement and appointing a Chief Human Sigma officer.  In addition, the last two chapters provide short descriptions of actions like: brand alignment, customer advisory counsels, selecting for talent, employee communications, recognition, rewards, motivational retreats, etc…  While these actions may contribute to some amount of improvement, they are superficial bordering on naïve.  They substantially underestimate the complexity of shifting deeply entrenched organizational behavior.  We’ve found that the fundamental character of customers’ and employees’ experiences with an organization are largely determined by the “unwritten rules” that drive the real behavior of individuals throughout the organization… from executive management all the way to the front lines.  Those “unwritten rules” are the sensible ways for those individuals to behave given a deeply embedded set of motivators (what’s important?), enablers (who’s important?), and trigger (how do people get what they want?) that exist in the organizational system.   Any effort to improve the customer and employee experiences that doesn’t deliberately surface and address these barriers is unlikely to shift the real behavior of the organization. (See: Why Customer Experience Initiatives Fail? and A Break in the Service Profit Chain: Why Increases in Employee Engagement Don’t Improve the Customer Experience?)

• Finally, the book proposes Human Sigma as a measurement that falls between 1 and 6 and summarizes the overall effectiveness of employee-customer encounters. The authors provide no explicit description for how the score is calculated.  The units of measure are not defined.  This “measure of employee-customer encounter effectiveness” doesn’t appear to be based on any information actually derived at the point of these encounters.  It seems like a simple bending of the customers’ stated levels of engagement and employees’ stated levels of engagement.  One can’t help but assume that the point of this book is to make the case for hiring Gallup to do this measurement, since they clearly didn’t intend to enable readers to do it themselves.

On a positive note, the authors make several strong points:

• Many companies appear to operate based on a risk adverse philosophy that can be described as “Just Don’t Suck.” Many companies think if they deliver an adequate, industry par experience they’re entitled to their “fair share” of the market.
• Scripting employee behavior doesn’t improve the customer experience. You need to define the outcomes you intend to produce for customers and then allow employees some flexibility in how they get to those outcomes.
• There is a critical distinction between customers that are rationally satisfied and customers that are emotionally satisfied. Customers that are highly emotionally satisfied deliver the greatest value to the company while customers that are highly rationally satisfied often do not behave any different than dissatisfied customers.
• For customer or employee experiences, “feelings are facts.” How the people perceive and feel about their experience are the most critical facts, not the objective measures of service levels.
• There are four levels of emotional attachment that people have towards a company:
  • Confidence.  “A name I can trust; always delivers on their promises”
  • Integrity.  “They resolve problems and treat me fairly.”
  • Pride.  “They treat me with respect and I’m proud to be associated with them.”
  • Passion.  “I can’t imagine a world without them; the perfect company for people like me.”

Overall, I’m glad that this critical topic is beginning to get the attention it deserves.  I’d love to hear other reactions to the book or the points I raised above.

A Break in the Service Profit Chain: Why Increases in Employee Engagement Don’t Improve the Customer Experience

Over the past 25 years of working with companies to design and implement outstanding customer experiences, it has become resoundingly apparent that the key to a great customer experience is a deliberately designed set of employee experiences.

About 10 years ago, James L. Heskett, W. Earl Sasser, and Leonard A. Schlesinger created positive awareness about “The Service Profit Chain“, which is generally summarized as:  happy employees create happy customers create happy shareholders.  The Service Profit Chain is a great way of illustrating the correlation between employee satisfaction, customer satisfaction, and profits.  It’s true; customers tend to have a better experience with organizations that have higher levels of employee satisfaction and engagement.

However, just because employee satisfaction and engagement are correlated with customer satisfaction doesn’t mean that making employees happier will lead to a better customer experience.  This is one of the classic traps your college professors warned you about; confusing correlation with causation.   I’ve observed that this flaw in logic has led many organizations to invest in trying to make their employees happier in the hope that those happier employees will turn around and deliver a better experience for customers.   IT DOESN’T WORK THAT WAY!!!

I understand this point of view runs against the grain of the traditional thinking.  We’ve just seen too many companies where, at best, more highly engaged employees simply deliver a sub-par experience more enthusiastically.  Now, I do believe that employee engagement is important.  In most situations, it’s necessary but far from sufficient.  Across the work we’ve done with companies in this area, we’ve learned that four major barriers must be addressed in order to have increases in employee engagement actually lead to a better customer experience.

1. A clear, current, and well-tested understanding of customers’ priorities. Unless the key decision makers throughout the organization really understand what’s important to customers, the best efforts of the organization will be misdirected. We’ve observed that, in most business situations, customers’ expectations and alternatives change faster than the “mental model” or beliefs of internal decision-makers about what’s important to those customers. If this is true in your situation, there are two important implications. It implies that there is always a disconnect between internal beliefs and the external realities about the customer. In addition, it also implies that this disconnect is not only present but growing. In order to have improvements in employee engagement translate into improvements in the customers’ experience, most organizations have to work very hard to make sure they stay in sync with continually changing customer priorities.
2. Alignment around a concise specification of the intended customer experience. What exactly is the experience you expect customers to have? Although every company designs their products and services, very few have ever clearly specified or deliberately designed what they do around the experience they intend their customers to have. As a result, the individual efforts of executives, managers, and front-line employees tend to be at odds with each other in subtle or even not so subtle ways. In turn, the experience customers have tends to be inconsistent, fragmented, or just plain frustrating. If this is true, increases in employee engagement will not translate into any substantial improvement in the quality of the customers’ experience.
3. Processes, technology, and management practices that get in the way of employees doing the right thing for customers. Is it easier for employees to do the right thing for customers or are there policies, procedures, systems, measurements, reward systems, etc… that get in the way? Although it isn’t intentional, most organizations have significant hurdles employees must overcome in order to deliver a great customer experience. Although, very high levels of employee engagement can contribute to employees’ ability to overcome these hurdles, individual heroics also tend to contribute significantly to inconsistency in the customer experience.
4. “Unwritten rules” that drive behaviours inconsistent with the desired customer experience.These unwritten rules drive the real behaviour of the organization.  In virtually every organization we’ve talked to and worked with, there are significant unwritten rules that are just inconsistent with delivering a great customer experience. These unwritten rules are unique to each organization,driven by extensive legacy effects, and reinforced by the existing employee experience. Many of these unwritten rules typically center around things like: what it takes to be successful in the organization; the importance of financial vs. non-financial metrics; the importance of internal vs. external stakeholders (e.g., my boss vs. the customer); the importance of acquiring new customers vs. caring for existing customers; the ability to admit mistakes; the ease of cross-functional collaboration, etc… Unless these unwritten rules are surfaced and addressed, they get in the way of having improvements in employee engagement drive a better customer experience.

Unfortunately, I have a hard time thinking of many organizations where these barriers are not in place.  The pervasiveness of these issues is one of the reasons why many organizations run the risk of investing heavily in improving employee engagement and have it not generate the benefits implied by the Service Profit Chain.

Over the past several years, we’ve been working on a way around this problem.  (See:   Why Customer Experience Initiatives Fail? ).    We’ve learned that, if you want to enable an intentionally better customer experience, you need:

1. Customer intelligence specifically designed to close the gap between customers experiences and internal beliefs (see:  Observation and Elicitation:  We Like to Watch )
2. Alignment on a concise specification of the intended customer experience (see:  I Got a Song that Ain’t Got No Melody)
3. To use this specification to prioritize and blueprint specific changes in the operating model required to consistently deliver the specified experience.  This includes customer communications, product and service strategy, customer-facing processes, organizational roles, skills, and structure, management systems, technology, etc…
4. To holistically design specific employee experiences that “generate” behaviors aligned with the specific experience you intend for customers… not just improve engagement!

So what do we mean by “Employee Experience?”  Our working definition is: “An employee’s rational and emotional reactions to how their organizational and external environment impact their ability to accomplish goals that are important them.”  This is inherently “employee-centric” in that it focuses on the employee’s priorities and how the organizational and external environments impact the employee’s ability to address those priorities.”  This has several important implications:

• The employee experience is not just about what you do for employees nor the managerial or physical environment in which they work.  The employee experience is about how an employee reacts to their environment and how that environment helps or hinders them in addressing their priorities.
• Different employees will have very different experiences of relatively similar work situations based on their individual priorities, motivations, what they are looking for from their job, etc…  Effective employee experiences must be designed to address the unique needs of employee segments rather than be “one size fits all.”
• Employees’ experiences must be designed to reinforce specific motivators (what’s important?), enablers (who’s important?), and triggers (how do people get what they want?) required to produce group behaviors that are consistent with and “generate” the intended customer experience.
• Employee experience interventions must be designed to address any “unwritten rules” that produce behavior inconsistent with the intended customer experience.

In addition, by creating a strong linkage between the customer experience required to drive profitable growth and the employee experiences required to deliver this customer experience, it becomes possible to create an economic model and ROI for well-defined investments in improving the employees’ experience.

I’m looking forward to talking more about holistic employee experience design in future posts.