Red threadresearch excx_medallia experience_final

Copyright RedThread Research, 2019. All rights reserved.
Employee Experience:
What is it? Why does it matter to customer experience?
Stacia Sherman Garr, Co-founder & Principal Analyst
RedThread Research www.redthreadresearch.com
@StaciaGarr, @RedThreadRe

Agenda
• The state of work today
• Why employee experience matters
• Maximizing the impact of employee experience
• Steps your organization can take today
• Wrap-up

Copyright RedThread Research, 2019. All rights reserved.Copyright RedThread Research, 2019. All rights reserved.
The State of Work Today
And why it makes employee experience more important than ever

Companies are growing
Photo by Kent Pilcher on Unsplash
Source: Standard & Poor’s
Sales growth rate, Year-on-Year, 2001- March 2018
(Inflation adjusted)
Copyright RedThread Research, 2019.
6.47%

The market’s climb is breathtaking
Dow Jones Industrial Average, 2009-2019
Source: DJIA, Macrotrends.net
Photo by Samuel Zeller on Unsplash

But all is not as it appears
Photo by Zaji Kanamajina on Unsplash

Source: “Dying for a Paycheck,” Pfeffer, 2018; “Work and the Loneliness Epidemic,” Murthy, HBR, 2017.
Many workers are not well
61% of US employees have said their workplace has made them sick
Job-related stress causes 120,000 excess deaths per year in the US and
nearly a million in China
Mortality rate of loneliness is greater than smoking 15 cigarettes per day
Photo by Farid Askerov on Unsplash

Copyright RedThread Research, 2019. All rights reserved. Source: Gallup, 2018.
Many are not
enthusiastic
about their jobs
• Half of employees are looking for new jobs
• 87% of employees are not engaged
Photo by Kyler Boone on Unsplash

Source: “Exponential Organizations,” Ismail, Malone, and Van Geest, 2014.
Companies are dying faster
Average lifecycle of a company down
to ~15 years from 67 years in 1920s
40% of today’s S&P 500 companies will
be replaced by 2028
On average, a company is disrupted
every 3.1 years
Photo by Val Vesa on Unsplash

Why?
Photo by Amos Bar-Zeev on Unsplash

Over the last 100 years, we focused on:
Efficiency at the expense
of adaptability
Hierarchical control over
decentralized
enablement
Separated education over
embedded continuous
learning
Photo by Jed Owen on Unsplash

We have to think about the next 100 years
differently from the last 100 years

By focusing on what makes us humans, not machines
But how?
Photo by Ban Yido on Un

Enter Employee Experience
What it is and why it matters

All humans have needs
Autonomy: “I have a choice”
Competence: “I am effective”
Relatedness: “I feel connected”
Photo by Nathalie Désirée Mottet on Unsplash

Employee
Experience (EX)
Employees’ collective
perceptions of their ongoing
interactions with the
organization
Photo by Will Porada on Unsplash

Perceptions
what employees
encounter, observe, hear
Interactions
how employees and
organizations interact via
organizational practices,
work environment,
culture

Employee
Engagement
A measure of energy,
involvement, and
concentration that is exhibited
in work attitudes and
behaviors

Employee experience and employee engagement are
not the same thing
Cause
Bottom-up
Broad scope
What organizations do, say, give
Effect
Top-down
Narrow scope
What employees see, hear, feel
Employee
Experience
Employee
Engagement

A dynamic employee experience framework
Organizational
Practices
Employee
Perceptions
Employee
Engagement
What organization
does
What employee
perceives
How employee feels
and behaves
Extent to which core needs of autonomy, competence,
relatedness are satisfied

The value of employee experience
Companies that invest in employee experience outperform others
4.2x
4.0x
2.8x
2.1x
1.5x
Average profit
Profit per employee
Revenue per employee
Average revenue
Employee growth (%)
Source: The Employee Experience Advantage, J. Morgan, 2017
122%
in S&P 500
Source: Glassdoor study, 2015

The link between employee experience and
customer experience (CX)
75% of employees are
highly or moderately engaged
in companies that lead in
customer experience
Organizational
Practices
Employee
Perceptions
Employee
Engagement
Source: Temkin Employee Engagement Index, 2016

Maximizing the Impact of Employee
Experience
While also driving customer experience

The CARE framework: Maximizing the
impact of EX on CX
Connect employees to customers
Ask and listen
Reflect the company’s brand
Enable employees Copyright RedThread Research, 2019. All rights reserved.

• Bring the customer
promise to life for
employees
• Give employees a voice to
find and share solutions
Photo by Ricardo Gomez Angel on Unsplash
Connect employees to customers

For example:
Airbnb
• Created “Belong
Anywhere,” an integrated
CX-EX brand
• Infused mission and values
into the brand
• Connected customer and
employee promise
Photo by Kelcie Gene Papp on Unsplash
Source: “Integrating the Employee and Customer Experience,” E.
Severson, People + Strategy, 2018.

Ask and listen
• Ask meaningful questions
to employees
• Listen to stories, pay
attention to emotions
• Take swift action
Photo by kyle smith on Unsplash

For example:
General Electric
• Collected employees’
ideas to improve
processes
• Created “PD@GE” to
facilitate feedback, track
priorities and insights
Photo by Jacek Dylag on Unsplash
Source: “Employee Experience vs. Engagement, and 3 Things You
Should Start Thinking About Now,” D. Sturt & T. Nordstrom, Forbes,
2018.

• Align external and
internal brands
• Evaluate and leverage
existing tools
Photo by garrett parker on Unsplash
Reflect the company’s brand

For example:
Mastercard
• Brought well-known
external brand “Priceless”
in-house
• Created an internal story
for employees, and scaled
it globally
Photo by Mastercard Europe
Source: “Enhancing Employee Experience to Maximize Potential in the
Workplace,” D. Reimer & S. Meighan, People + Strategy, 2018.

• Offer tools that enable
employees to
effectively serve
customers
• Prioritize tools that
foster objective
decision-making and
choice
Photo by Holly Mandarich on Unsplash
Enable employees

For example:
Humana
• Provided tool to give
employees real-time
feedback to adjust their
approach during
customer calls
• Improved customer
satisfaction (28%) and
employee engagement
(63%)
Photo by Berkeley Communications on Unsplash
Source: “Artificial Empathy: Call Center Employees are Using Voice
Analytics to Predict How You Feel,” G. Nichols, ZDNet, 2018.

Action Steps for Your Company
Three ideas you can get started on immediately

Action #1 Build
Transparency
Connect customer feedback to
employee feedback to uncover
opportunities for improvement
Photo by Romain V on Unsplash

Action #2
Examine
Workflows
How work gets done to identify and
address process bottlenecks and
communication silos
Photo by Ryan Plomp on Unsplash

Action #3
Embrace Agility
Focus on people and interactions,
supportive practices, adaptability
Photo by Shane Rounce on Unsplash

Wrap-up
And how to stay in touch

1. Exceling in the Future: We need to focus on what makes us human
2. Human Focus: Three innate and universal needs
3. Employee Experience, Employee Engagement: Related, but not the same
4. Value: Companies with a positive employee experience outperform
5. Maximize Impact: C.A.R.E.
6. Action Items: Build transparency, examine workflows, embrace agility
Final thoughts

Join us!
Stay up to date on the latest insights:
www.redthreadresearch.com
Stacia Sherman Garr
Co-founder & Principal Analyst
RedThread Research
stacia@redthreadresearch.com
https://www.linkedin.com/in/staciashermangarr/
@StaciaGarr
@RedThreadRe
Copyright RedThread Research, 2019.

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