6 Elements of Employee Engagement

We believe that employee engagement exists at the most fundamental operating unit in an organisation – me and my team.   In this article I want to explore the subject in a bit more detail and outline 6 key elements that we believe leaders should look out for. If leaders focus on these 6 elements their ability of create a more engaged climate improves, and as a consequence team performance increases.

There are, of course, many definitions of engagement in the world of human resources and business.  Our own view is that engagement can be defined as:

“Working in a trusting climate in which individuals experience a sense of being valued, a desire to be here, feel motivated to give the best of themselves, participate and take ownership for their own and the team’s success, and consequently feel pride in their organisation and its work.”

Researchers say that engagement can be most observed in the workplace from three angles:

• The energy angle: This has to do with how much energy someone puts into their actual work and day to day routines.
• The focus angle: This has to do with attention and concentration.  How much someone is focused at work, while they are at work – rather than doing their shopping list in their head or thinking about arranging their next holiday.
• And the emotional angle: This has to do with how they feel at work. How much dedication for – and connection with – what they do day to day, the people they work with, and the organisation itself.

This last angle is a really important one from our point of view.  We think there are three foundations stones on which all employee engagement gets built. These are: Trust, Climate and Emotion.

From our own research and working real time with clients on the subject, we believe there are at least six key elements relating to employee engagement.

One important element is that employee engagement is about connection. Experts say that connection is key.  Engagement is about having a deep connection between what we do and who we are. This is true about most things in life because we will tend to put more of our heart and soul into those things we care most about. It’s like having a hobby or interest that we are passionate about. When we disconnect, we disengage with the subject or activity.

Employee engagement at work is about enabling people to feel connected in meaningful and authentic ways with their roles and responsibilities, their colleagues and what the organisation is trying to deliver to its chosen customers. It’s about having a belief in – and passion for – what we are trying to do together.   And of course this state of engagement is observable through behaviour.

Another important element is that employee engagement is variable, not an absolute. Employees aren’t either engaged or disengaged.  Several studies have shown that approximately

• 31% of employees are “actively engaged,”  - as I’ve described above
• 52% are “neither fully engaged or fully disengaged,” just sort of neutral, and
• 17% are “actively disengaged”, that is actively focusing on other things while at work.

The truth is that we can’t expect everyone to sustain high levels of engagement all of the time. Frequency, amount and conditions are all factors, so when leaders reflect on the level of engagement they perceive in their work group they need to ask themselves several questions: How engaged do people really feel? How often do they feel fully engaged, and under what circumstances do they feel that way?

This leads me to another significant element in employee engagement. Because it’s a variable this challenges the annual engagement survey that organisations employ. I’m not saying that the information it produces is not useful – of course it is.  But we know that large surveys are usually too big and not frequent enough to give us an accurate picture.  In the interval between annual surveys, individuals may have swung through different levels of engagement at any given time.

We would argue that employee engagement really has to be temperature checked often so that a team leader can adjust what she or he does in order to sustain high levels of engagement in the team.

Ownership is another very important element of employee engagement.  The individual is the only person who can say whether they feel engaged or not. No one can have greater ownership about how I feel about what I do, than me. This is so important to my psychological and emotional well-being at work, that I can’t wait for management to Do something about my engagement.  I have to take the first step.  The trouble is that in many organisational setting employees are waiting for managers to engage them, often with the unintentional consequence of creating a ‘moaning climate’ when they are disappointed.

The only caveat here is that people need to feel they are working in a culture and climate that enables them to take ownership for their engagement; enables them to consider and reflect on it, and, with their colleagues, enables them to connect in the way that I have described above.

We also believe that another key element is that employee engagement is fundamentally about relationships. A recent study showed that 97% of respondents cared very much about their relationships with work colleagues. We believe that if employee engagement is about how I feel about being here, then my colleagues and my boss, the nature and quality of my relationships with them and other people – perhaps departments across the organisation – is going to be critical.  To what extent do I get what I need at a personal level from my immediate boss and my work colleagues?  What kind of trusting relationships do I have and what is the nature of the work climate those relationships foster?

Another important aspect of employee engagement is that the combination of these elements must produce something meaningful for people. In other words organisations don’t chase the holy grail of employee engagement just because it’s a good idea in itself.  Organisations put a lot of effort into creating highly engaged workplaces because people give the best of themselves in these circumstances.  When people work in open, trusting environments in which they enjoy working, they connect with their job beyond the day to day tasks and more with the mission and vision of the organisation.  As a consequence they feel pride in what they do and look forward to giving of their best.  This is so important.  After all when is the last time you heard someone say “I’m glad it’s Monday”, rather than “I can’t wait for it to be Friday.” This pride in something more meaningful than just the day to day tasks leads to more discretionary effort, with all the business benefits that produces.

So, as you can see, employee engagement is complex.  Like cogs in a giant machine, there are a number of elements that must exist, working together to create a high performance, highly engaged workplace.  Our research points to a number of key indicators of employee engagement that exists at that fundamental operating unit I talked about earlier – the team.

Here, I have outlined our thoughts on the six key elements of employee engagement that leaders should be looking out for.  Our next question is, what can leaders actually do about those key indicators to help foster employee engagement?

But that’s a subject or next time.

Lately we have been doing quite a bit of work with clients focused on helping them create workforce alignment behind the brand and the customer proposition, and inevitably we have turned to the subject of employee engagement.

This is a subject that’s had a lot written about it, so I don’t intend to go over old ground other than to say that there is now a wealth of tangible evidence linking employee satisfaction and engagement to motivation, productivity and business results.

My focus here is to provide an outline regarding our approach to employee engagement.  We believe that among all the many things an organisation can do to build engagement and satisfaction at work, one of the core things it can focus on is more effectively managing relationships at work.  After all, we know that the greatest source of inefficiency in most organisations lies in working relationships.

Q: So why is it so difficult to get working relationships right?

Well, there are going to be several factors and several answers to this question, but one fundamental answer is that as human beings we are all different.  We are different people, with different attitudes, different values and beliefs, and different views on the world and the people in it.

What can happen is that it’s easy to fall into what we call the “I’m right / you’re wrong” thinking trap.  This can get us into trouble because while I may be convinced that my view is right and yours is wrong, the other person is thinking the same way.  This “yes but” argument mode – my view is right and yours is wrong – produces strong emotional responses which is a waste of time and has an emotional cost.  Think about it.  When is the last time you heard anyone use the phrase at work – “I don’t agree with you, but I might be wrong?”

Another trap that we can also fall into is what author Tony Allessandro calls the flawed Golden Rule.  This rule is a strongly influential one that many of us have been brought up with.  It goes like this.

You should always treat people as you would like to be treated.  The fundamental problem with that golden rule is what may be good for me, may not be good for you.  This golden rule would only work in reality if we were all the same – but we know we are not.

Let me be very clear here. I’m not talking about not treating people with common courtesy and respect. That would be really tough to argue against.  No.  What I’m talking about is meeting other peoples needs in ways that builds trust and engaged relationships.  Not proactively understanding this can lead to tension in the relationship.  Not everyone wants to be treated as I do.

For some people being appreciated is very important, while for others less so.  For some feeling they have been given time to think things through is critical, while others just want to get on with things.  Not realising this and understanding how to meet those needs is the real tragedy.

We believe that in organisations this needs to be checked out on a regular basis and not wait for the employee survey every 18 months to 2 years, or the appraisal conversation – which is mostly about my work objectives – to ensure that our relationships are OK.

It’s a bit like car maintenance.  The engine will work less efficiently if it doesn’t get regular TLC.  So too relationships at work – which are dynamic and often contextual – need looking after.

Q: What is so difficult about treating people how they want to be treated and building employee engagement?

The challenge is that we tend to work in our own comfort zone and make lots of assumptions about others – not appreciating enough that someone else may have different internal drivers and motivations.

When we up-skill clients on empathy, the biggest challenge participants have is not intellectually understanding the need to get into someone else’s shoes.  The biggest challenge is getting out of their own shoes for a bit.  It’s difficult because we are talking about what natural behaviour – what makes us comfortable as a human being.  So fully appreciating someone else’s drivers and motivations may seem strange because their not our own.

Organisations do all sorts of things to build employee engagement. And employee engagement is created through a number of channels – communication and training, reward and recognition systems, performance management, team working etc.  They put effort into these structures because they want to build commitment to whatever the organisation is trying to achieve.  What we have found, though, is true engagement exits when an open culture of feedback is built and people feel that their personal needs are being met – by my work mates and by my immediate boss.  Typically we have found that the quality of feedback in most organisations is not great.  This may sound like an over generalisation, but often managers we have dealt with aren’t skilled at giving feedback.  And do it in a way that is valuable to the recipient.  Often what this means is that what is heard by the receiver is some form of criticism – “you should behave in this way”, or “why can’t you try doing this”?

The secret of providing high quality, valuable feedback is to deliver it in ways that meets people’s needs and doesn’t sound like a criticism.  Feedback has to be a good experience.  This culture of open communication, where feedback is valued creates an atmosphere of trust and feeling good about being here.

And this connects us to employee engagement because, in addition to all the systems and processes that may be used to build engagement, engagement operates at the smallest unit of the organisation.  The team and the one-to-one relationships, including my boss.  Employee engagement, therefore, is a leadership issue.

There is plenty of evidence to show that feeling valued and high self-esteem environments correlates to high performance.  A high esteem environment is a high performing environment.  It’s an environment where people feel good, and people feel open.  It’s an environment of trust where they can discuss the undiscussables, and they feel more motivated.

So we believe that there are some clear and significant factors in building employee engagement.  When people feel valued, they are more likely to be open.

If they work in a climate of openness, they are more likely to feel safe about giving and receiving feedback.  When people feel valued and are open, and feel willing to engage in feedback, they are likely to feel more motivated and willing to discuss differences.

In this open and trusting environment, where differences get discussed and people feel they have a voice, they are more likely to take ownership for getting their needs met and feeling satisfied at work.  Rather than waiting for management to do something, they take personal responsibility with others to make it happen.  When people feel valued, work in open environments where they feel they have a voice, they are also better able to deal with conflict.

Conflict can be constructive if it’s about ideas and the way forward. Conflict that is about a clash of personalities can be destructive.  This kind of conflict is only ever constructive if as a result we have a greater understanding of each other, or a greater willingness to meet each others needs.  Inter-personal conflict is fundamentally an unmet need. 

When we create a work environment where people feel valued, they have open discussions and provide quality feedback to one another, people feel motivated and willing to discuss differences, take ownership and manage potential conflict more effectively.  When this happens everyone can take joint responsibility for engagement and for creating a better place to work. 

When people are working in this kind of work climate, employee engagement levels are high. People feel they can give the best of themselves.  They feel involved and work more effectively across the organisation. Productivity, innovation and customer service goes up, and ultimately the business does well and flourishes.

CREATING HIGH PERFORMANCE TEAMWORK

Teamwork, often asserted as a key principle or value by organisations is difficult to argue with.  But working recently with a client helping them to build high performance teams highlighted how unfocused and often misunderstood the term really is and how little time is actually dedicated to enabling intact teams to work on building high performance.

We have recently been working with intact teams, helping them to become more effective and deliver higher performance. One of the more interesting aspects of the work that has emerged is how little time teams dedicate to themselves and how they operate.  At the start of each of our workshops we have asked ‘How often have you met in the last two years to engage in a conversation about yourselves as a team, in which the content is focused only on you and not the usual business agenda?’ The answer invariably given; ‘never.’

Giving time to developing high performance teamwork

This is not really surprising. Very often extra ‘team time’ is not considered as being very productive and efficient.  Instead ‘team time’ is usually focused on schedules, objectives, what is happening to satisfy customer needs, procedure and business updates of one type or another.  And yet, high performance teamwork is seen as crucial to strategy execution. Explore a typical set of organisational values and ‘Teamwork’ will be on the list sooner or later.  It is seen as a core capability, or principle, by which an organisation will deliver its brand promise and fully execute its strategy.  The challenge for most organisations we have worked with, however, is that they have either looked at the subject superficially – purely from a skills perspective – or have emphasised team development events and activities that are later difficult to translate to the reality of their workplace.

Having common understanding of what is really meant

Another interesting feature of working with this particular client was the discovery from our diagnostic phase that no clear, complete and mutual understanding of the term ‘high performance team working’ actually existed in the business.  Of course there were several opinions; many coinciding in a variety of ways, but no single, crisp, commonly understood definition predominated. This is often no unusual in many organisation that give cursory scrutiny to what high performance team working could look like in their business.

This factor is important to address in itself. The need to have a single definition of the term that could be translated, tangibly, into the way the business works is an important starting point.  Many good definitions exist, but in our view one that best brings together the varying aspects of high performance team working is:

“A small number of people with complementary skills, who are committed to a common purpose, performance goals and approach, for which they hold each other mutually accountable.”  Jon Katzenbach and Douglas Smith. The Wisdom of Teams.

The definition resonated at all levels with our client and formed the basis for the series of interventions we held with intact functional teams.

Three operating levels

Exploring with team members what this definition meant for them, led us to discuss the three levels at which a highly effective, high performance team operates.  The research is very clear. High performance teams operate at:

• Then individual effectiveness and inter-personal level. That is the complementary skills brought to the team and the way they manage relationships.
• The process level. The way that they decide to work together; how decisions are made and routines are put in place or emerge in order to work effectively together.
• The cross-functional / cross-team level.  All teams or functions are part of a bigger organisational entity in which an internal supply-chain and its associated interdependencies exists.

Most teams perceived to be ‘good’ are effective in managing, for the most part, the first two levels.  Where many organisations fall short is in building and reinforcing collaborative relationships across the organisation, between teams, as a conscious and intentional way of working.  Typically managing cross-functional interdependencies are often reliant upon personal relationships, friendships and ‘work-arounds’ that smooth out some of the barriers between teams and functions.

In our experience many organisations, despite their team work values, unintentionally conspire against more effective cross-functional collaboration. Performance management and reward systems and organisational structures – even matrixed structures – very often have the opposite intended effect, making true collaboration and high performance across the organisation difficult to achieve.

An interesting aspect of high performance teams is that they are led and together are conscious of a concept not often apparent in organisations; the notion that they are working for the success of another team.  Performance management systems and bonuses are typically focused on measuring and rewarding the results of individual effort or the achievement of particular team goals.  With this mindset and performance focus, it is unsurprising that teams do not spend much time worrying about how other teams in their internal supply chain are doing. 

Satisfaction with team effectiveness often shows up in employee surveys. When asked about team work, employees report they are satisfied with their own team, but express dissatisfaction with other teams.

High performance teams, by contrast, spend time and effort building cross-functional collaboration.  This is supported by a mindset that recognises that their value is not measured purely by their own output, but also by the extent to which they have contributed to the success and achievements of another team with whom inter-dependency exists.  This attitude is challenging to sustain if the only perceived managerial focus and recognition is on their own outputs.

So having a crisp, well understood definition of high performance team working and recognising how all three levels in which teams operate is a fundamental starting point in creating high performance teamwork in an organisation.

Characteristics of a high performance team

As we worked with our client, helping them to come to grips with the realities and implications of these factors we started to focus in on intact teams. We asked them to begin the process of analysing and assessing themselves against a set of characteristics that are typically seen in high performance teams.  These eleven characteristics are not meant to exhaustive, or that they are the only characteristics that lead to high performance team working.  They are, nevertheless, the characteristics that study after study, and our own experience, show are the most typical.

High performance teams have key characteristics. They:

• Share and are committed to a common vision and purpose
• Establish clearly defined goals and expectations
• Share information in ways that directly add value to the team effort
• Set high standards of performance for themselves
• Are aware of their complimentary skills and how to utilise them
• Are aware of their weaknesses and how to minimise their impact on team performance
• Hold themselves mutually accountable for the successes and failures of the team against agreed goals
• Create and continually feed the team spirit and manage the climate
• Continually seek ways of improving how they do things
• Build collaborative and cooperative relationships
• Manage their inter-personal relationships

We worked with several intact teams in our client organisation and seeing them work through these characteristics as they were perceived to exist in their own teams was fascinating.  A simple question such as, ‘which three characteristics does the team feel, if worked on, would have the greatest impact on team success?’ drew out excellent debates. Of course the answer to the question was different for different teams, but for once – in some cases the first time – they had an opportunity to discuss and debate varying views about what was important and they cared about as a team.  This activity by itself was very bonding for team members.  Facilitating discussions that enabled individuals to first understand and then appreciate different perspectives and, what we call, the ‘thinking behind the thinking’ was greatly valued.

But moving to the outcome.  Most teams we work with are typically outcome focused. Through a series of interventions and activities that enabled team members to experience the characteristics we were able to move them through a process of decision-making.  This decision-making is about where the energy and true commitment lies for sustaining the effort in creating high performance team working.

As an intact team, members were able to set goals and decide on actions that were realistic and tangible in their day-today work context.  Here we were able to coach the team in building awareness and promoting action. Each team decided on goals they wanted to achieve around becoming a high performance team, determine indicators of success and the steps they would take in order to achieve their goals.

And this approach raises another aspect of high performance team working.  In time, high performance teams become self-managing and moderating.  They embody the characteristics listed above and feel autonomous enough to want to continue sustaining that culture and climate in their team.  So much so that they become self-reliant, more effective and perceived by others as role models of a high performance team.

Seeing the impact of ‘Wow’

Over the years I’ve worked with several clients, helping them to build their service promise and describe the kind of customer experience they want to deliver to their customers. It’s usually an intensive, hard thinking, but fun process which challenges design teams to really push their thinking beyond today and to explore thier realistic aspirations and service ambitions.

Part of the process requires describing the service ‘wows’ that go beyond service standards and really help to influence the customer experience towards surprise and delight.

Just this week I have been working with a service design team with a client in Mexico. They were a great group. Highly energised and with a big desire to articulate excellent service standards and customer ‘wow’ for each touch point in their customers journey. As I was working with a mixed group – Mexican and English – I had a simultaneous translator, John, working alongside me. His expertise and facility with both languages was clear and very impressive. There was no question, he made my job in facilitating the team 100 times easier.

At each touch point of their customer journey map we had excellent discussions about how they could deliver a service Wow and I found myself having to reiterate what distinguished a Wow from a service standard.  In the end we got there. The team produced a customer journey map that they could all feel justly proud of and commited to. And then came the time to close the session.

I handed over to one of the senior managers so he could say a few final words.  He started by thanking the team for their hard work and for the results they had produced together. He then said that there was one person in the room that required special thanks and he asked me to join him at the front of the room. This was a ruse.

The senior manager then said that the entire workshop could not have been possible without the hard work of John out translator, who was asked to come up an receive a gesture of his and the teams thanks. The gift was a tie.

The look on John’s face when he recieved his gift was more elocuent and clear in explaining a customer service Wow than all the explanations and examples I could have ever given to the team. In itself the gift of the tie wasn’t that much, but it was so obviously beyond his expectations and – as a smartly dressed man – something that he valued.

I spoke with John some minutes later and asked him how he felt.  He said he was speechless. The impact on him at the very moment of being given his thank you gift was so great that it was difficult to put into words. He told me he was beyond surprised or delighted and he felt valued by everyone at the session.  It was totally unexpected and it affected him very deeply.

Even if the cynic in us say well clearly he doesn’t get too many ‘thank yous’ or perhaps a parting gesture is the least he could have expected, that would be to miss the point. When I was travelling home I wished that I had recorded the moment to dvd. Perhaps I can still interview John and get him to relate the emotional impact that gesture had on him and what his consequential feelings and thoughts about the organisation were.

Maybe you had to be there, but the look on Johns face as he received his gift was a moment to treasure and the very best example I could have possibly given the team when describing the emotional impact of a service wow.

I think he, the team and I will remember it for some time to come.

How Do You Drive Organisational Performance?

Economic, market and organisational challenges are all vexing senior leaders in their efforts to drive their companies’ performance. But what can they focus on internally that would enable them to fully execute their companies’ strategy and achieve their business goals?  How can they drive execution and organisational effectiveness? Joe España, MD of Performance Equations considers four fundamental areas that drive business performance.

It’s unsurprising that senior managers in most organisations are exhorting additional effort from their managers and employees in cutting costs and boosting sales – especially in the current climate. Both these factors are undoubtedly important, but they don’t in themselves help senior leaders actively manage sustainability performance. Building the business pipeline and closing sales obviously leads to top-line growth, but says nothing about how effective the organisation is in delivering its goods and services.  Managing costs and margins clearly help with bottom-line profits, but says nothing about where growth is going to come from.

Approximately 70% of business strategies and goals are not fully executed and achieved not because of a focus on these two aspects of business, but because of four clear levels that, according to research, senior leaders need to pay attention to in order to drive strategic business performance.

What are the four drivers of organisational performance?

Strategic Focus

The first is strategic focus. Organisations need to create clarity, unity and engagement behind its strategy.  In my business experience working with clients in a broad range of sectors, many organisations have a strategy and vision but by the time it leaves the executive team it has been filtered, interpreted, become hazy, ambiguous and difficult to operationalise.  Moreover, very often strategic goals are communicated solely as headline figures, providing no back ‘story’. What are the particular customer needs the company specifically wants to meet? What are the business processes and initiatives that are required in order to meet those needs, and what are the organisational capability requirements in order to ensure the business can actually achieve its intended goals?

According to Robert Kaplan and David Norton, the founders of the balanced scorecard and strategy mapping, only 5% of employees understand their company’s strategy. It is important that all staff have an understanding of the strategy and its rationale and how it drives the business.  The need to make sense of what it looks like operationally and how they can contribute and add value. They can only do this if they know where the organisation wants to go.

Additionally one of the elements that motivate people to perform is the size of the challenge. A strategy with little or no challenge will not encourage staff to give of their best. Equally, too much, unrealistic challenge (give available resources) will de-motivate people as they perceive there to be little if any chance of success.

Organisational values also play an important role in strategic focus. As guiding principles they help all employees to understand and contribute to ‘the way things are done’ in the organisation – its culture. Organisational values need to be clearly understood by everyone in relation to the business’ strategy, and role modelled by every influential person in the company to that they become ingrained.

Performance Management

The next performance driver is performance management. Human beings do not cope particularly well with ambiguity.  Although different individuals will have their own ambiguity tolerance levels, the greater the clarity about goals and performance expectations the more comfortable we are. Clarity about goals and expectations is an integral part of getting commitment.  Individuals tend not to buy into things that are not clear to them.  Having goals, therefore, that make sense and can be envisioned as possible are more likely to engender motivation and energy investment in their achievement.

Understanding by itself is not enough.  Eventually any organisational vision, mission and strategy have to be translated into team and individual goals.  Without this alignment individual goals would sit in a vacuum. Organisational goal ‘fit’ tells the individual that their job is important and how their piece of the jigsaw puzzle contributes.  This ‘fit’ provides understanding that their effort makes a difference and links their performance to the rest of the organisation.

At the same time, just like the level of challenge in organisational strategy, the level of challenge in individual goals will determine the amount of effort individuals will put into their achievement.  Goals that are under or overly challenging influence the level of energy expended on their achievement.  Review of performance and feedback received must be appropriate in terms of frequency and quality. As a leadership tool, feedback is one of the most powerful means of developing and sustaining performance, creating a sense of challenge, and motivating human endeavour.

Leadership and Management

The role of senior leaders in clearly articulating a vision for the company and a sense of inspiration for the organisation as a whole is a key performance driver.  Acting as role models for the organisation’s values and principles, and managing major organisational processes are vital to delivering the organisations intended results.  Perceived leadership behaviours strongly influence the way staff feel about their company and the extent to which they feel engaged with its goals and ambitions.

While senior leaders may set the overall tone for the organisation, line managers influence the immediate work climate that staff experience day to day. Manager’s influence task and job structures, informal reward systems and operating processes. They also operate as interpreters of the organisations vision and strategy for their team members.  Their effectiveness in managing structures, systems, processes and people have an enormous impact on the organisations performance.

Financial rewards also play an important role in driving performance.  Being remunerated for work done in a way that is perceived to be fair and reasonable for the job level, is well understood by organisations as one of the drivers of performance.  What is often overlooked, however, is how misalignment and perceived unfairness can creep into the system.  Often organisations encourage team work, for example, and reward achievement of individual goals.  Bonus schemes are often notorious for being managed to fit the system and the ‘bonus pot’ rather than truly rewarding performance.

What is often underestimated and under-utilised by managers is the potential impact on performance derived from psychological reward and recognition.  Managers all too often rely on monetary rewards to drive performance, even though years of research and evidence points to the greater influence of recognition as a driver of performance.

Likewise, the extent to which staff feel involved, appropriately, in goals, decisions and plans that affect them makes a significant contribution to organisational performance.  Participation gets the best knowledge, information and expertise focused on an issue (the best place to solve a problem is as close as possible to where it exists).  Participation and involvement increases individuals’ commitment to implementation of decisions. Participation and involvement also devolves influence throughout the organisation as well as builds capability.  Study after study has shown that organisations with devolved influence are better able to cope with business challenges, and participation enables organisations to manage change more effectively.

Building on this element, it is also vital that organisations encourage and sustain cross-functional collaboration and team work.  Typically when companies measure satisfaction and co-operation among teams, they very often report that the level of co-operation and collaboration is perceived to be far less from other teams with whom they have to interact.

Structure and resources

The formal structure of an organisation is usually presented in the form of the organisation chart, designed to show the relationships and reporting lines between individual positions and functions. This formal structure determines information flow, decision processes and often positional status.  The informal structures of a company may operate differently, however. Who knows who, the unspoken relationships and cross-boundary influences, and socio-political working of the organisation.  Organisational structure determines how people behave towards one another.  It can create defences or encourage collaboration. It is a driver of organisational performance because in can create efficiency or inefficiency in communication, innovation, product and service delivery.

Likewise, the way that jobs themselves are structured – the nature of the task requirements of job roles – is a driver of performance.  Jobs can either be satisfying for the holder, tapping into their creativity and skills, or they can be designed to stifle these, leading to a sense of little autonomy, high dependency and frustration.  Jobs that are designed to make best use of the cumulative skills, motivations and potential of the job holder, contribute significantly to their sense of satisfaction and motivation, helping to drive engagement.

Traditions and rules also provide a contextual driver of organisational performance.  The way things have always been done, the tried and preferred ways and the rules and policies may provide a reference point for managing performance, but can also act as a break to strategy execution, particularly if that strategy requires new ways of working.  This is often seen in post M&A integration activity, where two conjoining departments find that their operating methods and procedures clash and preferences are involved.

An absence of appropriate resources/facilities, too, impacts on organisational performance.  While efficiencies and cost-effectiveness is a perpetual consideration, lack of resources often means that individuals and teams cannot perform effectively and struggle to deliver the expectations demanded by the business strategy.

These sixteen factors operate within the four primary drives of organisational performance.  They combine and influence one another in dynamic ways. When trying to measure and manage organisational performance, senior leaders are well advised to consider these drivers and factors and the extent to which they are either helping or hindering the full execution of their strategic intent.

about the author 

Joe España is Managing Director of Performance Equations, a specialist organisational development and change consultancy. Performance Equations helps companies and individuals become more competitive by directly linking strategy to people and business performance. Their areas of focus are: Organisational culture & change, Leadership development, Team development and Service excellence. Joe and his team provide measurable solutions that are bespoke to particular needs, and that deliver performance where it matters most; the bottom line.

For a free information pack call +44 (0)1252 545171. Joe can be contacted by email at info@performance-equations.co.uk. To find out more about Performance Equations and how they help organisations achieve better results, visit www.performance-equations.co.uk.

Can Organisational Effectiveness Really Be Measured?

All business strategy, irrespective of sector or industry, size or complexity of the business, has to answer two fundamental questions: What do we need to be really good at to achieve our business goals, and what does this place have to be like in order to make that happen?  The vast majority of organisations’ inability to fully execute their strategy and achieve their goals and objectives has little to do with the unpredictability of the economic climate or market conditions, less to do with competitor activity and customer fickleness, and all to do with the internal factors that drive organisational effectiveness.

Effectiveness – the successful production of desired or intended results – in fully executing the strategy and business plans is obviously at the forefront of business leaders’ minds. Notions of organisational effectiveness, however, have been notoriously difficult to quantify.  Efficiency has always been easier to measure because it about maximising productivity, reducing wastage and working in a competent and well-organised manner.  While these attributes are undoubtedly critical to any business aiming to succeed, organisational effectiveness has to be equally important to senior leaders who want to achieve their business aspirations.  Working efficiently isn’t enough.

But how can an organisation measure its overall effectiveness?  

Operationally, error rates, tolerances, performance standards and targets have only ever been measures of efficiency.  Business results and the management information produced to monitor performance are like looking in a car rear-view mirror.  This data can only ever inform a business leader about the results of their organisational endeavour.  It can never give a concrete fix on the internal organisational factors that have actually produced those results, therefore, making it difficult to know which levers precisely in the business should be pulled in order to affect the kind of results wanted.  Because of this, business management has the potential of being reduced to a never-ending series of plate spinning moves, tweaking the system or process, in the hope of increasing the probability of consistently producing the desired goals, but never being really sure that all the effort is generating the required effects. 

Likewise, it has been an often quoted mantra – now proven by models such as the Service-Profit Chain – that motivated and engaged employees produce higher levels of productivity and customer service.  Organisations have, therefore, increasingly placed effort in taking temperature checks through staff satisfaction surveys, climate surveys, or employee engagement surveys.  While producing interesting information about employee attitudes or perceptions, very often they are not diagnostic in nature.  That is, they don’t provide correlated understanding of the root causes of perceptions or drivers of the survey results.  

Here is an example:  a staff satisfaction survey finds employees expressing low levels of job satisfaction and morale.  Without a diagnosis of the factors driving this perception, leaders often find it difficult to know what to do about it. What they do is to increase their efforts to communicate organisational objectives and impress on their staff how important they are to the company; they may even increase their training budgets. 

What is needed is a method of understanding how certain organisational performance drivers actually produce the outcomes or results being experienced by the company.  Using our example, what a diagnostics survey might show is that the performance driver of these perceptions are often to do with leadership behaviours and a lack of employee involvement and participation in decisions that directly affect them.  In this case, the point of greatest leverage is creating greater opportunities for staff to feel they have a voice in operationalising the strategy, consulting with them on decisions and enabling them to contribute to real problem-solving. 

Knowing the factors that drive organisational performance is important to leaders. It presents choices and identifies decision-making priorities.  Being able to diagnose why organisational performance is being delivered the way it is, is critical in knowing what to do about it.

A framework for understanding organisational performance 

Business results are the issue that preoccupy the thinking of CEO’s and executive teams.  By the term ‘business results’ we mean the outcomes that organisations produce because of the way they lead and manage the business and its people.  In this sense results are about profitability, growth, and shareholder value.  A number of business performance models developed during the 1980’s, such as the Service-Profit Chain and the EFQM Business Excellence model, have sought to provide criteria against which organisations can judge themselves and identify ‘best practice’ enablers or drivers of these business outcomes. 

Business outcomes such as financial results and shareholder value, however, may not be the only outputs by which an organisation measures its success.  There may also be important outcomes such as its ability to change and adapt to market conditions, customer satisfaction and loyalty, cross functional collaboration and employee morale.

Ultimately all of these outputs are produced as a consequence of a number of internal organisational factors that drive performance.  By understanding what these internal factors or performance drivers are and how they operate in producing the results experienced, organisational leaders can monitor and manage organisational performance more effectively; thereby increasing the probability of producing the results they actually want.

These internal factors are several and cluster in particular ways. They operate dynamically to produce the results experienced by an organisation (See fig 1.) For example, the extent to which clarity about the strategy and its goals exists at all levels of the organisation is linked to employee satisfaction, morale and change management; the extent to which organisational structures and the rules and traditions of the company are seen as either helping of hindering team and individual work performance is linked to the way leaders and managers create an environment in which people can give of their best;  the way espoused organisational values and principles are demonstrated in a practical way day-to-day is linked to organisational effectiveness, quality and customer service; the way employees receive and value the non-financial rewards they may receive (such as praise and recognition) is linked to feelings of responsibility, accountability and decision-making.

fig. 1

 

 

Because these performance drivers influence, more or less, the kinds of results or outcomes the organisation experiences, they provide very strong indications about the priorities leadership teams can focus on to most impact of what they are trying to achieve strategically.  One client we worked with in the construction materials industry used this systemic, cause-effect diagnostic approach to turn round a failing business; from haemorrhaging money to returning a £1.2 million profit.

It was clear from performance results that some of the key measures the company was failing to manage successfully were employee productivity, customer satisfaction, and costs in general.  This was placing dual downward pressure on cost containment and margin erosion.  Operationally, this was unsustainable without closing the entire operation because it was uniformly agreed that a minimum level of operational cost existed in order to meet customer demands.  The trouble was that neither revenue nor margin was enabling the company to sustain these costs.

With the use of our diagnostic tools it was possible to not only measure the gap between their existing organisational effectiveness and what was required to sustain a profitable business, clear identification of the performance drivers most affecting their results was also achieved.

In this particular case it was due in part to the organisations leadership style, how well employees understood their individual contribution to daily management of costs, and a willingness to accountably participate in decision-making that was going to impact most on customer behaviour and loyalty.

An example of this arose at the quarry site itself.  It was discovered that at the quarry weighbridge staff had no real concept of the lay out and dump location of particular graded stone used in the manufacture of aggregates and civil engineering projects.  As a customer order was taken by sales, weighbridge staff would radio dump loaders to collect the required tonnage and deliver to the weighbridge for distribution to the customer.  The problem existed in that without a real knowledge of the locations of stone dumping and storage areas across the quarry site, lorry drivers were being asked to cover significant distances detouring from pre-arranged haulage routes in the quarry to collect the required materials.  This was frustrating drivers having to back track to collect new loads, and annoying customers in missed delivery times.  Cross-functional collaboration and greater operational communication between departments led to a map of the quarry showing regularly updated locations of particular graded stone being erected in the weighbridge office.  By using both the map and the continuous dialogue between departments, the results saw an increase in operational efficiency, improved delivery times and greater customer satisfaction.  This simple, but highly effective, solution – one of many implemented at the quarry – was proposed, driven and implemented entirely by the workforce.

Developments in employees willingness to take responsibility for day-to-day improvements in operational effectiveness and greater cross-functional collaboration across the organisational was brought about because, the leadership was able to identify some of the underlying drivers of under-performance and address those factors that would have the greatest impact.  By enabling employees at various levels to meaningfully understand their contribution and take the necessary decisions to improve their day-to-day work experience, operational costs and margins were significantly improved.  What had been an unsustainable loss-making operation was turned – through business wide engagement and participation – into a high performing, profitable unit.

Measuring organisational effectiveness over the long term

The Economist Intelligence Unit’s 2005 survey of over 4,000 executives worldwide found that the single greatest management challenge in creating long-term value is the swift adaptability to change.[2]  Alongside this, lives the additional dilemma of answering how does a company remain focused on fully executing the strategy that they worked so long and hard to formulate, articulate and communicate throughout the business, while at the same time remaining alive, proactive and adaptable to the changes and nuances of its business environment and customer demands?  Its ability to do so is a signal of its effectiveness in operationalising today’s strategy and achieving its longer terms goals and ambitions.

We have argued before that the extent of an organisations’ effectiveness has to have a relationship to its intended strategy.  As organisational strategy evolves with changing market or customer demands, so too, any measure of the company’s effectiveness has to be measured against its ability to deliver its changing strategy.  As organisations adapt to meet their changing business challenges, they still have to answer one of the key questions posed at the start of this paper: ‘what does this place have to be like in order to deliver what we intend’?

Diagnosing and measuring organisational effectiveness has the additional benefit of describing the type of organisational style that may be required – and which leaders would like to achieve – in order to meet their strategic goals over time.  The way a company deploys and manages the organisational performance drivers already mentioned above provides a snapshot of the organisations overall operating style.  This existing style may be aligned to and conducive to the style required by the strategy, or not.  Measurement allows a gap analysis to result which identifies the particular aspects of an organisations style that have an effect on the company’s overall effectiveness.

The discrete differences between the desired state, intended by leaders, and the actual state experienced by the organisation as a whole, enables far more refined management of particular performance drivers.  Regular analysis makes it possible for leaders and managers throughout an organisation to make the fine tweaks a company might need over an extended period of time in order to adapt and refine its position vis-à-vis its chosen markets, and deal with the ever increasing number of demands placed on it by its customers. Over time, organisations can make the necessary adjustments to their organisational effectiveness that will help them to stay on track and fully execute their chosen strategies.

[1] European Foundation for Quality Management

[2] The Economist, Issue 39, Spring 2005.

 

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Should leaders lead leadership development programmes?

I recently had and email exchange with a colleague of mine about the role of leaders as both students and teachers in in-company leadership development initiatives.  Our debate was wether is was better to develop a pool of leadership talent using external expertise or have the intervention led by organisational leaders.  It was such an interesting thought that it led me to ‘pencil’ my own views.

I think the starting point is not whether the development intervention should be led by leaders or externals, but rather what is the intervenion supposed to be achieving.  Te first is a debate about the methodology or vehicle and there may be all sorts of ways of delivering high performance leadership.  The second is about measurement, evaluation, end results and questioning the strategic intent of the eventual programme.  Assuming we can pin down and hook the eventual impact of any initiative into the strategic requirements of the business, then the methodology debate is slightly easier to answer.

I say slightly easier because there will be a variety of ways of deploying and implementing leadership development in organisations, each with their own valid benefits and short comings.  I really like the idea of having leadership development being led by the company’s leaders, though I recognise that this approach raises some challenges of its own (I’ll come to them in a minute), but one of the arguments for having the leadership development intervention led by leaders internally rather than by external consultants and providers (don’t mean to do myself out of work here!) is that being put into the ‘spotlight’ of having to develop others in the values, practices and behaviours leaders require to demonstrate in order to fully execute the strategy is actually VERY developmental of itself.

Of course there are some caviats: Do these leaders, charged with the development of the future leaders in an organisation themselves role model what is being described? Do they have the skills and acumen to be able to effectively develop those that follow?  Do they have credibility in their own positions as well as in a development scenario? etc etc.

But I don’t think these challenges are insurmountable. We have all read plenty of research that provides evidence of the need for leaders irrespective of their professional standing and quality, to learn and renew themselves.  If they are not continually learning they are standing still.  So leaders have to be students, if they have to be anything. In the last couple of weeks I have been working with very senior executives in a global company getting them to tangibly think about what they do and could do to develop further the talent in their organisation. They found it extremely difficult but, I was told, extremely rewarding. They were students because they were learning about new ways to think about developing others and their role in making it happen. They enjoyed it because they realised they could be more creative than they had first thought and were able to envision their roles in directly engaging, coaching and creating interesting workplace assignments for their people.

Now here is my point. Initially I would not expect busy senior business leaders to be fully conversant with the ‘magic and mystery’ of leadership development, or indeed to have technical knowledge of design, development or delivery, but if I can learn how to do it, they certainly can. The role of leader as coach, developer and ‘teacher’ I think is an ever more important one, as employees look to their leaders for more than direction and guidance, but to reasons for staying.

There are enormous benefits in utilising internal resources, and in this case, internal leaders as the developers of a pipeline of future leaders in a company.  The role of the external consultant/coach is one to provide some framework, advice and guidance on assessment, design and delivery; knowing the technical benefits and pitfalls of a variety of potential solutions. I think where an external consultant works in this way, as a true partner to the organisation on an intervention like this, the end result is stronger and longer lasting.  If any further argumentative proof were required, Britannia Building Society is a great case in point.  They developed qualified internal coaches from their senior leadership group to develop coaching internally to develop leaders.

I believe this approach is the way to go in the future.  The very process is very developmental of leaders and having to develop others is a great way to build organisational glue for the ethos, values, practices and behaviours that future leaders need in order to execute their business strategies.

Getting Results From Team Development

In an increasingly complex world, where organisational structures are constantly changing – becoming flatter, more project and matrix orientated – most would agree that teamwork is now more important than ever before.  Certainly it is much more difficult for an individual to be expert at everything. Yet, very often teambuilding and team development interventions emphasize the individual’s awareness of roles and how they are likely to interact with one another by focussing on the skills needed to become a high performance team – rather than examining the elements that are key to successful team development, and overall team effectiveness.

 

Typically overlooked is a focus on a combination of three elements: The effectiveness of individual team members; the seven key processes that enable teams to function more effectively; and the actual relationships that exist within teams that either help or hinder team effectiveness.  Without a process that enables teams to address these issues through the phases of team development (Membership, Control and Cohesion), most team building or development interventions are arguably little better than an away day jolly or some form of outbound process which individual team members find difficult to translate – and apply – when back in the workplace.

 

How does ‘team working’ actually operate?

While awareness of team roles and interaction is important and useful, it only scratches the surface of effective teamworking.  Teams operate at three levels: At the level of the individual members of the team and how they interact; at the ‘unit’ level (that is, the team as an entity in which the way the team manages certain processes determines how effective it is as a whole); and as part of a larger system, i.e. the organisation in which team interaction and organisational structures have a significant bearing on effectiveness.  Focusing on just one of those levels – say the team skills that members demonstrate – provides a distorted way of looking out how teams work – and how to help them to be more effective.

 

Effectiveness

One of the fundamental elements contributing to team effectiveness is clarity and unanimity about the team’s purpose: the uniting goal that establishes what they are there for.  It provides the reference point against which other team processes and activities can be judged for relevance and effectiveness. 

 

At the individual level much research has been carried out into the roles and skills that indicate how a person might operate in a group environment.  All of these behaviours have their own strengths and weaknesses.  In this context, individual adaptability as a skill would, for example, appear to be an important asset.  It means being able to make efforts to present oneself in different ways to suit the needs of different people and situations.  On the other hand, it may also signal indecisiveness and a ‘sheep-like’ mentality that could undermine the team’s dynamism and energy.

 

At the team level it is important that the team is able to work its way effectively through the three phases of team development: membership, control and cohesion.  Sometimes teams can get stuck in any one of the phases, particularly if there is a difficult or emotional topic to overcome.  This requires negotiation and agreement about the team processes that will be applied.

 

Team Process

Research shows there are seven processes vital to day-to-day team operations and to overall effectiveness:

 

·        Communications – Most teams can find simple ways of improving communications within the team as well as between organisational teams.

·        Decision making – When examined in detail, the majority of teams agree that they make decisions that are not appropriate to the context in which they are operating, and that should ideally be made elsewhere (this is particularly true of management teams).  Typically there is consensus that the very process of their decision making can be improved.

·        Vision and planning – Having a vision and agreeing objectives is only part of the story.  Planning by the whole team is needed to make it happen.

·        Resources management – Most teams agree that they don’t manage their resources, systems, etc., as effectively as they could.

·        Leadership – Done properly, and in the absence of a titular team leader, this activity can be shared by different members of the team bringing in their expertise situationally.  As Harvard Professor John Kotter has said: successful organisations have little acts of leadership throughout the company.

·        Team climate – This is a measure of how it feels to work in the team. How good a ‘fit’ is there between individuals and the team style?  How good a fit is there between the team and the rest of the organisation?

·        Individual effectiveness – What does the team do to ensure that it plays to the strengths of its individual members in terms of knowledge, skills and behaviours? How can it continually nourish, develop and utilise them effectively?

 

Inter-team effectiveness

At the inter-team level it is important that the relationship and collaboration between the organisation’s teams are working effectively.  The way teams operate with one another across an organisation may be strongly determined by the culture of the organisation.  If there are problems – caused, for example, by too much competitiveness – the teams or the culture may need to be modified.  Across organisations, teams need sensible ways of managing cross-functional dynamics in order to overcome potential vested interests and to build commitment to overarching strategic goals.

 

Bringing about change through team building and team development

As individuals / teams move from one level to the next, dynamics change.  Diagnosing the current state of team effectiveness a long way before initiating the team building or development event is important to defining what the team actually needs in order to be more effective.  Doing so creates clarity not only about what’s needed; importantly, it generates awareness and the impetus to negotiate commitment to improve performance, too. 

 

Paying attention to a team at only one of the three levels would be a mistake. It reduces the team building or team development event to the level of an expensive ‘nice to have’, when in today’s environment, if appropriately and effectively handled, such activities should be seen and valued as ‘must do’s’.

About the author

Joe España is Managing Director of Performance Equations, a specialist organisational development and change consultancy. Performance Equations helps companies and individuals become more competitive by directly linking strategy to people and business performance. Their areas of focus are: Organisational culture & change, Leadership development, Team development and Service excellence. Joe and his team provide measurable solutions that are bespoke to particular needs, and that deliver performance where it matters most; the bottom line.

 

For a free information pack call +44 (0)1252 545171. Joe can be contacted by email at info@performance-equations.co.uk. To find out more about Performance Equations and how they help organisations achieve better results, visit www.performance-equations.co.uk.

 

 

Satisfying Customers No Longer An Advantage

Satisfying customer expectations no longer provides a competitive advantage. Nowadays, companies have to connect at a different level. Joe España, MD of Performance Equations ponders on making the emotional connection.

 

Trying to complete purely on customer satisfaction levels is an work of self delusion.  Nowadays customers are far more discerning and demanding. Chasing high levels of customer satisfaction doesn’t guarantee that your customer won’t defect to the competion.  What is required is engagement at a totally different level; at the emotional level. Managing the customer experience at the emotional level pays far greater dividends, and here’s why.

 

Everything is an emotional buy; everything. Whether buying a cup of coffee, a holiday, a car, or a house.  Our emotional reaction to a service transaction is the fundamental driver of the purchasing decision.  But more importantly, it’s a determining factor in customer retention and loyalty. More that satisfaction, customer emotion is the underpinning factor in the customer experience; what it’s like to do business with the product or service provider.

 

Yes of course rational thought, reflection, consideration of pros and cons may be part of the buying decision, but an emotion definitely will be. One’s feeling, sense, intuition, gut reaction and experience of the interaction will play a significant part in the buying decision.

 

This example illustrates the point.  I was walking through a shopping centre with a colleague recently. We walked passed a well known coffee shop and I suggested we stopped and had a coffee.  My colleague immediately responded with a suggestion that we should go further into the shopping precinct and around the corner to his favourite coffee shop. “I like it there,” he said. Not, they do better coffee, it’s less expensive, or I have a loyalty card, but “I like it there”.  In fact he liked it so much that he was willing to take us out of our way in order to get that cup of coffee.  This was an emotional reaction. No rational and logical weighing up taking place; a simple instinctive response.

 

Why is this important?

 

During the ‘80’s and ‘90’s customer satisfaction was king.  It was based on research suggesting that continued improvement in product and service quality would mean corresponding increases in satisfaction, and customer satisfaction was going to ensure a returning purchase. What further academic research and empirical evidence now shows is that companies who followed this guideline were surprised to find that even high scores in customer satisfaction did not guarantee loyalty. Companies have discovered that loyalty, not satisfaction, drives profits. The economics are very compelling. As little as a 5% decrease in customer defections can mean a doubling of profits.  Why? Because loyal customers are not only repeat purchasers, and are more likely to buy other products and services, they become advocates of the company.  It is nine times cheaper to keep an existing customer than acquire a new one.  The unit operating costs of servicing repeat purchasers is also reduced. Advocates become the ‘virtual’ marketing function of the product or service provider, recommending it potential new buyers amongst family, friends and colleagues.

 

But there are other reasons based on service recovery.  No product or service operation is flawless.  Though a company may want to diminish the incidence, it is almost inevitable that something will go wrong sometime, however small the error.  When customers are positively disposed and emotionally engaged to service providers, they will be more willing to tolerate a whole range of service or quality shortfalls. The coffee not quite as tasty or as frothy as last time, the delayed flight or the clothes shop that has sold out of the garment you particularly wanted. Customer satisfaction surveying doesn’t quite get to grips with the emotional effect of the service interaction or the value that customers perceive from it.  Satisfaction in many respects is an outcome.  Something happened that created that sense of satisfaction.  And that ‘something’ is the experience itself.  Satisfaction, or dissatisfaction for that matter, is the result of what it felt like for the customer in being dealt with by the service provider. Satisfaction somehow seems such an inappropriate and often inadequate description of what the customer is experiencing.

 

Doing business at the emotional level

 

Recently I went along to my nearest toy retailer to browse for a suitable gift for my eight year old son and witnessed the sheer joy and marvel experienced by a small toddler being given a replacement cuddly toy.  The parent had gone to the toyshop to ask if a toy that had not even been purchased at that particular outlet could be replaced because it had been given as a gift to her two year old, was one in a series, and the child already had it.  The customer service agent said it wasn’t their policy, but left her counter, went to the appropriate shelving to retrieve the entire set of toys for the child to choose the one she wanted. The shop lost £3.99 and gained an overjoyed child, an appreciative parent and a story that will be repeated several times as an example of superior service.  Neither the child nor the mother were merely satisfied with how they had been treated. The broad smiles on both their faces gave a real sense of the appreciation and happiness felt (as well as giving a clue of the potential sense of relief in the mother in not having to deal with a disappointed child).  Even I walked out of the shop with a bit more of a skip in my step than I had walked in with.

 

By contrast, a colleague told me of his less that satisfying flight to a client meeting in which he stupidly (his words) packed all the materials he needed for his presentation in his checked-in luggage.  On arrival the surly lost baggage clerk explained that his luggage was still at his departure point and that it would not be with him till later in the afternoon and that if he had needed all the material then it was his own fault for having checked it in. My colleague explained to me later that neither dissatisfied or extremely dissatisfied, were words that accurately described his feelings about the treatment he had received. Incandescent with fury were probably closer adjectives to the truth of his emotional reaction.

 

So it all seems to rest on the emotional experience.  How the engagement with the service provider leaves us feeling – about them, the transaction and the company as a whole. And even when the system – the procedures and protocols the service provider is sometimes required to follow – get in the way, (as they often do in financial services), appreciation and handling of the customer at the emotional level can make all the difference.

 

Only a couple of weeks ago I called by business bank early on a Monday morning to check that they had reissued and sent a replacement to my business card that was about to expire. Confirming that they had, I explained that I was about to leave on a business trip and that I had not yet received it. Straight into automatic mode, the call centre operator informed me that they would have to cancel the card that was lost in the post and reissue a new card.  This would take between 3 and 5 working days.  Too late, I advised, as I was leaving on my business trip over the weekend, needed the card, and my existing card would expire mid week. Can’t help you they said.  I suggested that rather than relying on the postal service, they should courier a replacement card and I would sign for it.  This seemed a viable possibility, except they added that in cancelling the lost card on the Monday would also automatically cancel my existing card which was still valid till the Thursday.  Increasingly angry and frustrated, I suggested that they should not cancel a card that was still valid and usable, and enquired how they could creatively suggest some options to deal with the presenting problem.  None were available.  After much haggling and finding I was getting no where with the ‘system’, I begged that they please ensure that the card was delivered in the minimum amount of time. This they assured me they would do.  Frustrated, manacled by their procedures and feeling completely undervalued, I agreed.  Unfortunately, insult was further heaped on a far from satisfying experience.  A very pleasant voice called about an hour later to say that I could collect my card from my local bank branch at the end of the week.  The communication within the system had obviously not understood my earlier point about being busy and the inconvenience of the situation. The rising tied of indignation, frustration, helplessness and seething venom was far too great to contain, and the unfortunate caller received a tirade describing their incompetence, insensitivity and inability to organise an escape from a wet paper bag.

 

What is the point of this? 

 

What the customer feels or doesn’t feel at every single encounter with a service provider is directly related to the service providers ability to manage the totality of the experience and customers expectations.  Customer experience is not simply about smiling sweetly, or keeping an even tone when handling an irate customer.  It is about creating, operationally, transactionally and behaviourally an emotional connection with the customer that leaves them feeling – no matter what – that they are the most important person in that moment in time.  Addressing the emotional needs, desires expectations of fickle – I want it now and I’m not going to wait – customers is difficult and can’t be left entirely to the great customer service skills of the individual. Defining the goal of the intended customer experience, so that it is differentiated, intentional supports the brand promise and adds real value to the customer requires a whole company approach which goes beyond procedural quality standards and protocols.

 

Before a product or service provider can determine the best way to manage their customer experiences it has to define and articulate exactly the emotional reaction they want to create in the customer at every point of contact.  Arguably customer satisfaction surveying and market research will provide the data required in order to do so.  This seems very logical except for the fact that customer satisfaction measures very often don’t give enough, if any, data about drives satisfaction or indeed loyalty at the emotional level.

 

Customer experience management requires much greater insight into the drivers of satisfaction and loyalty.  That insight is very likely to demonstrate that a whole package of different factors lead to a sense of satisfaction and loyalty, based on a mixture of expectations, needs and reactions to the organisation and the perceived value received by the customer.

 

Managing the customer experience, then moves critical elements such as product and service quality, and perceptions of value-for-money, beyond merely hygiene factors – the minimum requirements needed to be seen as a ‘player’ in the market – to fundamental delivery mechanisms in creating the sort of personal, deep seated emotional and psychological connections with the customer that enable them to feel themselves satisfied and loyal.  A consistent, differentiated, valued and completely intentional approach to managing the customers emotional response to doing business with the company is the only way of dealing with the irrational, illogical, intuitive and feelings based drivers that underpin every buying decision.

 

Now then, about that coffee I was going to have.

 

 

about the author

 

Joe España is Managing Director of Performance Equations, a specialist organisational development and change consultancy. Performance Equations helps companies and individuals become more competitive by directly linking strategy to people and business performance. Their areas of focus are: Organisational culture & change, Leadership development, Team development and Service excellence. Joe and his team provide measurable solutions that are bespoke to particular needs, and that deliver performance where it matters most; the bottom line.

 

 

For a free information pack call +44 (0)1252 545171. Joe can be contacted by email at info@performance-equations.co.uk. To find out more about Performance Equations and how they help organisations achieve better results, visit www.performance-equations.co.uk.