Driving Growth and Differentiation Through a New Kind of Relationship
We live in a world that is hypercompetitive, global, networked and ever-evolving.
In this human era, people seek purpose and long for authentic and meaningful connections. Social media and instant access provide unprecedented levels of transparency for enterprises and individuals alike. Simultaneously, the digital revolution continues to force disruption across industries, demanding new business approaches, strategies and ways of working. As a result, customer experience has gone mainstream.
In 2016, nine out of 10 companies planned to compete primarily on the basis of customer experience. Nothing— not price, not product—is more important than the experience
The characteristics of a compelling experience are in a constant state of flux. In the push to achieve growth through differentiation, organizations have doubled down to provide superior customer experiences, chasing evolving expectations and higher-level needs.
However, in doing so, many organizations have failed to focus on the experiences of their most important competitive advantage: employees.
Today, the definition of employee is not as straightforward as it was at the start of the 20th century. At one time, any individual who worked for an organization in exchange for compensation was an employee, and there was little room for confusion. Today, in order to recognize the changing definition of work, the definition of employee must likewise expand to include the full-time, part-time, casual, contingent, shift and on-demand workers, daily hires, weekly hires, outworkers, would-be applicants, applicants, candidates and alumni.
Not only has the definition of employee expanded, but so has the nature of work. In today’s state of constant and immediate connectivity, work is approaching a persistent state. Organizations now demand real-time responsiveness and an “always-on” mentality from employees.
"Your employees are your company's real competitive advantage. They're the ones making the magic happen - so long as their needs are being met." - Richard Branson
In exchange, employees demand more, too—more autonomy, more choice, more meaning, more flexibility, and more emotional intelligence and empathy from
They want to be individually seen, heard, and valued and they want to be part of something bigger than themselves.
Individuals today aren’t seeking a job or even a career. Instead they seek experiences from employers that are reciprocal, intentional and inspirational. In this human era, which is ruled by experience, customization, and continual evolution, organizations that fail to focus on Employee Experience do so at their own peril.
THE EMPLOYEE CHALLENGE
Employees are a complex, highly fragmented group who have varying needs, motivations and expectations. They are more dynamic and emotional than customers, making it significantly more challenging to satisfy them and manage their perceptions.
In the human era, the employment relationship provides meaning and value to the employee, shaping and enabling their sense of self. Employees seek a more integrated way of life where work pairs with their personal and emotional needs. A person’s job is woven into the fabric of who they are. It impacts how they identify themselves; it dictates their ability to support themselves, their family and their community; and it impacts their pursuit of self-actualization and achievement of purpose.
Delivering a compelling employee experience is an untapped source of differentiation in today’s talent-driven marketplace. An employee’s work experience affects their thoughts, feelings and behaviors. Positive or negative, the impact manifests in engagement levels, retention, loyalty, customer satisfaction and overall business performance. Organizations that adopt human-centered design approaches that recognize employee needs and aspirations, both articulated and anticipated, will reap the benefits of a more engaged, empowered, and productive workforce.
THE EXPERIENCE REVOLUTION
Different eras have showcased changing approaches to achieving organizational objectives. During the Industrial Revolution, factories, shops and railroads thrived by tirelessly pursuing efficiency to avoid wasting materials, energy, money and time. Once efficiency became table stakes, organizations began to focus on effectiveness—the ability to perform a function with optimal levels of input and output—as an additional source
With either focus (efficiency and/or effectiveness) the employee’s motivation to help the organization succeed was overlooked. Employers eventually realized they were losing their best people and could no longer attract the people they wanted, costing them money and affecting their ability to compete.
As a result, in the early 1990s, organizations began to invest in employee engagement, recognizing that employees will invest more in work when they are engaged. Yet after almost two decades with this focus, these engagement efforts are consistently underperforming. In 2015, only 21 percent of employees globally were highly engaged. In the U.S., the majority of employees—51 percent—were not engaged. And perhaps most critically, another 17 percent were actively disengaged.2
The challenge lies not in convincing leadership of the benefits of engagement. The stats are there, and the value is proven if engagement can be achieved. For example, work teams in the top quartile in employee engagement outperform bottom-quartile teams by 10 percent in customer satisfaction ratings, 21 percent in productivity, and 22 percent in profitability.3 What’s more, a five percent increase in employee engagement is linked to a three percent increase in revenue growth in the subsequent year.4
EX ripples into other realms: 69 percent of job-seekers say they are less likely to buy from a company they had a bad experience with during the interview process, while a similar number is more likely to buy from a company after a positive job-application experience.5
So what is the problem? The real challenge lies in the misguided approaches many organizations are taking to activate and measure engagement. Organizations are throwing resources at momentary activities rooted in static, poorly executed measurement surveys. They then launch endless check-the-box action plans, one-off initiatives, and siloed point-in-time solutions. Sustained, lasting engagement and commitment is rarely achieved since this short-term perspective does little to counteract the changing nature of engagement on an individual level.4 Ultimately, many employers are missing the big picture. It’s time for a new approach. Today’s workforce requires a more strategic, long-term, sustained view that knits engagement into every interaction between and within the organizational system...internally and externally. This is the approach required to truly capture the hearts, minds and hands of employees.
This is Employee Experience. This is EX.
THE EMPLOYEE EXPERIENCE ECOSYSTEM
EX can be described as the sum of all interactions between an employee and his or her employer as they are perceived, understood and remembered by the employee. This reflects a journey through the stages prior to, during and after the work arrangement. Each stage contains interactions that cumulatively create the total experience. Intentional or not, good or bad, every organization offers an EX.
Traditional views of EX do not fully appreciate the interdependent and changing nature of the employee/employer relationship. Once a service-for-hire transaction, the relationship is evolving into what is more akin to a social contract. Employees logically expect transparency, authenticity, simplicity and relevance. They expect an experience that delivers on a compelling employer brand promise and the expectations it sets.
To create a compelling EX, organizations must understand the influencing factors and recognize the increasingly complex, interdependent system in which they exist. Individuals’ work experience is influenced by how they function (what they do), which in turn is dependent upon the organizational system in which they work (where they work) and their personal attributes and values (who they are).6
Within an organization, a complex ecosystem of interactions across services, processes, products, tools, technologies, environments, and events is at play, all impacting the EX. As in any complex system the relationships of the independent parts are dynamic
In addition, the experience is impacted by an equally influential external system that includes the organization’s customers, suppliers, vendors, partners, market and community. The employee’s perception from the countless internal and external interactions form the basis of the employer brand, which serves as the pledge of what to expect, and is an expression of who the organization is, what it does, and what it offers as its value proposition to employees.
EX embodies an organization’s ability to connect to an employee’s reason, emotion and purpose across all interactions, internal and external. The delivery of compelling and sustainable EX requires a foundational understanding of—and an ability to respond to— articulated and anticipated employee needs, wants and motivations at the different stages of their relationship with the organization while managing internal and external
EMPLOYEE EXPERIENCE PRINCIPLES OF DIFFERENTIATION
From our research comprised of hundreds of studies across multiple disciplines, decades of applied work experience as in-house leaders and strategic consulting engagement partners with dozens of Fortune 500 employers and an equal number of start-up, growth companies and mid-market employers, we have developed an EX philosophy with five core principles.
Organizations that commit to the five core EX principles are able to differentiate themselves and fully realize their greatest competitive advantage. These principles help create an EX that is ongoing and reciprocal, offering an authentic value exchange between an organization and its employees.
1. Embrace the Whole Human
2. Choose Connection over Utility
3. Synchronize and Evolve Experience, Brand and Culture
4. Align Internal Functions Across Teams
5. Put Employees First
To read the rest of this piece, click the download link below.