STRATEGIC FOCUS:       Engagement

                                                          Finally, the proactive invo...
In this 1to1 Executive Dialogue, Don Peppers, founding partner of Peppers & Rogers
Group; and Fay Beauchine, president Eng...

                                                 Is employee engagement applicable to    ...
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Peppers & Rogers Employee Engagement


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Peppers & Rogers Employee Engagement

  1. 1. Executive Dialogue Featuring Don Peppers and Martha Rogers, Ph.D. STRATEGIC FOCUS: Engagement To Spur Success Engage and Enable Employees Having a clear and concise understanding of engagement is essential when seeking to improve business performance Don Peppers Recognized for over a decade as one Don/Martha of the leading authorities on customer- t here is no lack of buzz around “engagement.” Business pundits are pitching employee engagement as a cure for all that ails a company. The trouble, however, is that they’re not all talking about the same thing. A good place to start, therefore, is at the beginning: getting clarity around what is (and isn’t) engagement. We need a common understanding so that prac- focused business strategy, Don Peppers is an acclaimed author and a founding titioners will know the end in mind, will understand the tactics that are tightly aligned with the partner of Peppers & Rogers Group, the world's premier customer-centric goal of enhancing employee engagement, and will be able to track progress against that goal. management consulting firm that Engagement manifests itself through changes in employee attitudes, such as an increase provides clients with world-class cus- in passion toward the job—but, it isn’t just an attitude. Engagement is also indicated by tomer strategy, flawlessly executed, for bottom-line impact. improvements in business outcomes, such as reduced turnover—but, it isn’t the same as those outcomes. Engagement is also sometimes discussed from an organizational perspec- tive, emphasizing the alignment of the company’s objectives with the employees’ skill sets—yet, there’s more to it. “Engagement Defining Engagement is positive, “We see engagement—for both customers as well as employees—as proactive positive, proactive involvement,” explains Don Peppers, founding part- involvement.” —Don Peppers ner of Peppers & Rogers Group. When an individual is engaged with a company, she or he is involved. Interactions occur, information is exchanged, operational friction is reduced, and the cost of switching increases over time. At its highest level, involvement creates interdependency and inextricably intertwined interests; at its Fay Beauchine lowest level, it fosters independence of a transactional nature. Fay Beauchine is President of Carlson Involvement is necessary, but isn't sufficient by itself to indicate engagement, on the Marketing's Engagement & Events part of an employee or customer. For involvement to rise to a state of engagement it must business. She also serves the industry as a member of the Executive Com- also be proactive—namely, the individual must be self-motivated and must be the one ini- mittee of the Enterprise Engagement tiating the participation, setting in motion a sequence of events. A proactively involved Alliance, President of the National Business Travel Association Found- customer may recommend the company’s products to friends or colleagues and take a ation and Vice President of the SITE personal interest in the company’s success or failure. A proactively involved employee Foundation (Society of Incentive won’t wait for management to explain that a problem needs to be fixed—she or he will see Travel Executives). the need and solve it now. Involvement with a company by a customer which is largely in response to a company’s action (e.g., registering for a promotion) is typically beneficial— but, it isn’t engagement if it isn’t proactive.
  2. 2. STRATEGIC FOCUS: Engagement Finally, the proactive involvement must be of a positive nature—constructive, benefi- cial, and helpful. The intent of the proactive involvement must be to foster the ongoing development of the relationship. An employee who is proactively involved in a negative sense is someone we would classify as "actively disengaged." “When the two pieces are present—positive, and proactive involvement—customers and employees are more than satisfied and more than loyal: They are engaged,” notes Peppers. Benefiting by Engagement Engagement is like “potential energy”—it’s energy that is stored in the employee, and is ready to be used. To convert it into “kinetic energy,” it’s necessary to accelerate from a state of rest to motion. Achieving that velocity occurs when engaged employees are enabled—namely, when they have the tools, the training, and the authority to act in the best interest of the company, without the need to wait for direction from management. Engaging employees without enabling them will engender frustration,” explains Peppers, “and enabling them without engaging them runs Engaged Employees Impact the risk of having employees who solve the wrong prob- Most engaged employees see themselves as having the ability to lems (or, the right problems in the wrong way). You must positively impact critical facets of the business, including quality, have both to realize a business benefit.” customer satisfaction, profitability, and innovation. “Organizations in the future will be increasingly decen- % of respondents agreeing with statement tralized, distributed, and dynamic. In this environment, suc- cess will require heightened levels of agility that can only Quality of our work/products/services be obtained through employees who are engaged. 38% 88% Employees who emanate positive, proactive involvement Customer satisfaction will be required because the rate of change won’t tolerate 42% anything else.” Making it happen begins with a culture that 85% exhibits purpose. Profitability of my organization 20% The Criticality of Culture 63% “Culture is what employees do when no one is looking,” Innovation of products/services explains Peppers, “and is founded upon an understanding of 13% the company’s purpose.” When that purpose transcends the 60% Disengaged basics of business (e.g., ”Become a $125 billion company by Revenue growth Engaged the year 2000” for Wal-Mart in 1990) to encompass a more 17% significant transcendent rationale, (“To preserve and improve 59% human life” for Merck), the ground is fertile for employee Costs 20% engagement to grow and prosper. 56% “The successful companies of the future will be guided by a culture which has purpose,” notes Peppers, “because Source: Closing the Engagement Gap, a Towers Perrin Global Workforce Study (2007-2008) the successful companies of the past have all had this one overriding characteristic.” In the book Built to Last, authors Collins and Porras showed that durably successful companies all possessed a strong culture embodying a sense of purpose. “To achieve that end, begin by creating a culture based upon earning the trust of customers. How? By treating the customers the way you would want to be treated,” notes Peppers. When employees work within a culture having purpose, they know it. At the Coca-Cola Company, it’s “to refresh the world… to inspire moments of optimism and happiness;” at ADM, it’s “to unlock the potential of nature to improve the quality of life;” and at Nike it’s “to bring inspiration and innovation to every athlete in the world.” It takes employees who are both engaged and empowered to build and sustain these cultures, which become the firm’s most critical operating asset. 2 © 2009 Peppers & Rogers Group. All rights reserved. 1to1 Media is a division of Peppers & Rogers Group.
  3. 3. In this 1to1 Executive Dialogue, Don Peppers, founding partner of Peppers & Rogers Group; and Fay Beauchine, president Engagement & Events at Carlson Marketing, discuss the top issues and trends in the discipline of engagement today. What are the most common misunder- and that they can make a difference in measurement approach can not only miti- standings about engagement? business today. Companies want to retain gate angst among leaders, but stimulate their best employees to take care of busi- enthusiasm for employee engagement DON PEPPERS: People believe that any- ness. When the economy improves, and its benefits. thing positive represents engagement employees who feel disengaged will jump (e.g., a positive attitude or customer loyal- What are the top trends in the discipline ship the first chance they get, leaving their ty). If you have engaged employees and of employee engagement? employers struggling to maintain an effec- customers, you’ll get those outcomes— tive workforce. FB: One trend is the ongoing challenge of but, that is not what engagement means. finding impactful, meaningful ways to FAY BEAUCHINE: It’s commonly believed show appreciation that are budget-con- that engagement is meaningless jargon scious and socially acceptable. Companies “Engagement impacts every have to be aware of outside opinion and and can’t be measured. Both are false. Employees engaged in their work experi- employee in every department. influences. Another trend is the expanded ence a strong connection that taps into To be most effective, the use of technology to achieve engagement emotional and rational efforts, their hearts engagement solution needs goals—through vehicles like social media and minds. These efforts lead to greater to be designed to best suit and virtual meetings. results measured by traditional metrics each audience.” — Fay Beauchine (productivity, retention), as well as differ- And, looking back, what is the single ent approaches (macro rather than micro, most important change in the discipline delayed rather than immediate effect). that has occurred over the last five years? Creating, maintaining and enhancing FB: The most important change is all the What are the most effective ways in which employee engagement isn’t necessarily research that proves how critical engaged companies are making the business case easy. What are the top challenges or employees are to an organization’s bottom for investments in employee engagement? obstacles that most often inhibit success? line. We recognize that technology, process- DP: It’s difficult to convince a CEO to give DP: First, it’s short-termism—the malady es, and machines are all commodities. up $1 of quarterly earnings per share for that causes businesses to place an undue Employees are not. some unspecified benefit in shareholder emphasis upon today at the expense of value later. But, if you realize that cus- tomorrow by harvesting customer equity What role does technology play in making tomers are the key asset creator then for immediate gain without considering an employee engagement solution creating value today as well as value how to replenish and grow that asset. successful? tomorrow through changes in their like- Second, it’s the belief that we can buy FB: With the right strategy and the right lihood to repurchase and recommend— employee loyalty. In fact, the most impor- tools, technology can be helpful and even it makes it easier to overcome the crisis tant things for the best employees are critical in many business situations. This is of short-termism that plagues too many intrinsic in nature. especially true for large-scale efforts companies today. FB: The question points out an excellent where technology provides the infrastruc- FB: Companies understand that they need reason for working with experts in the area ture for efficient execution. Online or web- employees to take care of their customers of employee engagement—it’s not easy based recognition programs (peer-to-peer, and that engaged employees take care of and it’s good to have a solid coach in your manager-to-peer), incentive program com- their customers better. Consequently, they corner. The biggest challenge to overcome munications and tracking, and virtual are investing in employee engagement as is leadership’s lack of understanding and meetings for recognition all benefit from a remedy to the issues facing most com- commitment to the value of engaged the marvels of technology. Every year we panies today—the economy, layoffs, and employees. That’s followed by short-term see refinements in capabilities within the doing more work with fewer people. It thinking and the unfamiliar territory of technology realm, as well as acceptance of serves as a reminder to employees that engagement measurement. A long-term new approaches and tools within the they and their contributions are valued success strategy buoyed by a well-defined workforce. 3
  4. 4. STRATEGIC FOCUS: Engagement Is employee engagement applicable to fully engaged? It would be valuable to all organizational functions—or, is it best know how to hire employees who are to limit its focus to customer-facing not only engaged themselves, but have a departments? propensity to get other employees fully engaged, too. DP: Employee engagement is applicable to all organizational functions. In many com- FB: The most important unanswered ques- panies, only a small minority of employees tions are how various elements of an Result are actually customer-facing. They are, however, supported by a majority of inter- engagement program (training, communi- cation, recognition, incentives, etc.) affect Rundowns nal colleagues. Only when a strong culture of engagement runs throughout the entire the outcome and what is their cumulative effect. We’ve made great headway in the company can it be sustained. • Adding learning opportunities decision sciences (analytics) area in isolating into a program doubles the level the variables and we can tell for a specific FB: Engagement impacts every employee of engaged participants. program what works and what doesn’t. in every department. To be most effective, We’re constantly analyzing data to gain the engagement solution needs to be • When a manager is engaged and designed to best suit each audience. Front- insights that will allow us to predict, in any recognized, there is a 75 percent situation, what elements and at what cost line employees have different goals than increase in participant engagement. will provide the greatest impact. I support staff; sales people have different expectations than others in the organiza- • By improving engagement with tion. Employees in different countries are employees in an automotive company, customer satisfaction motivated differently. This all should be “The biggest challenge to was increased by 5 percent. factored into an engagement program strategy and design. overcome is leadership’s Source: Carlson Marketing lack of understanding and What’s the single most important commitment to the value unanswered question about employee engagement today? of engaged employees.” — Fay Beauchine DP: Is there a way to identify individuals who are most susceptible to becoming Carlson Marketing is the world’s leading relationship building company. As the largest inde- pendent agency in the U.S. and the 13th largest marketing company in the world, Carlson Marketing designs and delivers loyalty and engagement programs for some of the world’s best known brands. Carlson Marketing’s two global service offerings—Engagement & Events and Brand Loyalty—are supported by six core capabilities: Strategy & Brand Planning; Creative and Visit www.carlsonmarketing.com Communications; Decision Sciences; Award Services; Technology Services and Customer Service. Carlson Marketing employs 2,500 marketing professionals in 45 cities across 16 countries. Peppers & Rogers Group is dedicated to helping its clients improve business performance by acquiring, retaining, and growing profitable customers. As products become commodities and globalization picks up speed, customers have become the scarcest resource in business. They hold the keys to higher profit today and stronger enterprise value tomorrow. We help clients achieve Visit peppersandrogersgroup.com these goals by building the right relationships with the right customers over the right channels. We earn our keep by solving the business problems of our clients. By delivering a superior 1to1 Strategy, we remove the operational and organizational barriers that stand in the way of profitable customer relationships. We show clients where to focus customer-facing resources to improve the performance of their marketing, sales and service initiatives. To continue the conversation with Don, visit his blog: www.peppersandrogersgroup.com/blog/ 4 © 2009 Peppers & Rogers Group. All rights reserved. 1to1 Media is a division of Peppers & Rogers Group.