Employee engagement - the differentiating characteristic of winning customer strategies

Profile picture for user denis_pombriant By Denis Pombriant June 5, 2017
Summary:
Employee engagement is emerging as a critical element that can help differentiate organizations that offer world class service and those that don't. Here's why.

Engagement gapingvoid
It’s worth taking a moment to review a short article in Harvard Business Review about healthcare, How U.S. Health Care Got Safer by Focusing on the Patient Experience because it may offer insights into how we treat customers in business.

The net of the piece by Thomas H. Lee, MD of Harvard Medical School, highlights the value of fully engaged personnel from physicians all the way down to people in the laundry service.

Customer engagement is a hot topic in business today. It refers to the effort by vendors to do whatever they can to prompt customers to feel they have a connection with a vendor or a brand so that customers will return for additional purchases.

But while return purchases are important, the way we go about prompting them requires a rethink. In medicine, according to the article, Healthcare didn’t get better until a critical mass of people concluded that it could get better, as Lee puts it,

Before 1999 the assumption was that quality in health care was basically pretty good — and in any case was difficult if not impossible to measure. The financial health of the organization was the most important metric for management and governance to follow.

Hence financial performance was the surrogate for overall organizational performance in treating patients. But in 1999 a report from the Institute of Medicine estimated that as many as “98,000 people die in hospitals each year as a result of preventable errors.”

What happened next started a revolution. Recognizing there was room for improvement healthcare providers, payers and regulators banded together informally

...to improve multiple dimensions of quality, including reliability in use of evidence-based medicine, patient experience, and safety.

By defining a higher quality standard and its dimensions and evaluating metrics for these proportions, the healthcare system was able to improve to the point that today healthcare is better, safer and more efficient.

Now, in business as in medicine it is very difficult to identify measurements that can influence total quality but take just one healthcare example, hospital-acquired conditions, and understand that it has dimensions of cleanliness, nursing, and physician care that can be measured.

The difference between high and relatively low performing institutions turned on employee engagement, not patient engagement. Employee engagement turns out to be the secret sauce or as Lee states,

The association between the various outcomes and the various measures of engagement is most consistent with the conclusion that engaged physicians, nurses, and other personnel — people who are proud of their organization, who believe it is committed to quality and safety, and who consider teamwork a core value — perform better.

So what does this say generally about CRM and its customers? Most businesses already do a credible job of measuring their own efficiency and many make an effort to understand customer satisfaction and propensity to recommend, though there are many studies that show brands try to influence customer sentiment in ways that invalidate the analysis.

For instance, my local supermarket encourages people to take Net Promoter surveys but also suggests, not too subtly, that a 9 or 10 is a desired outcome. The result is great scores but little movement on the customer satisfaction index because customers aren’t any happier, they’re either not providing answers or simply giving the survey what it wants without necessarily meaning it.

Culture is much deeper than this. In “Solve for the Customer” I wrote about the importance of corporate culture that I witnessed at HubSpot, a Cambridge, MA CRM company.

What makes HubSpot interesting is both a passionate interest in promoting their culture and also the culture itself, which encourages a lot of out of the box thinking. Employees are encouraged to put the customer ahead of the company because it’s felt that doing so will empower them to do the right thing thus encouraging the customer engagement we all crave. But notice customer engagement starts with the business being willing to engage with the customer, not the other way around.

My take

As with the healthcare example, there is a tendency in business to assume that the organization’s products, services, and capacities are pretty good and with that to focus on the quantifiable and measurable things like the bottom line. It will always be important to attend to the bottom line for without it you have only a hobby and not a business.

Measuring outcomes doesn’t change them. To do that you need to go upstream to primary causes and actions. We are becoming expert at using analytics and machine learning to understand customer behaviors and planning next best actions but this only gets us so far.

There’s still ample room in business for improvement and it should start not with analyzing success but better understanding failure. Many organizations take a stab at understanding customer reaction to service encounters but few do the same with sales.

Analyzing, with the help of the customer, why a deal went south is often viewed as so hard that most people don’t bother, choosing instead to get their feedback from wins. That's hopelessly lopsided.

There isn’t much technology available for that sort of thing either, which puts the effort on the shoulders of people who would prefer to be engaged in more 'productive' efforts. That’s where culture comes in and it’s also how engaging employees makes a significant impact.

Plenty has been written on the detail behind employee engagement but do we really understand its impact both positive and negative? I'm not convinced we have gotten that far. Yet.