Why engaging the employee is great for the customer

Good customer service
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It is well chronicled that the UK isn’t close to the top of international league tables on productivity and employee engagement. The Engage for Success website notes the sobering statistics: ninth out of the 12 largest economies for engagement; 15% below average for productivity.

This is despite the research that demonstrates the fairly obvious and intuitive links between highly engaged workforce and vastly superior economic returns. As an article by Bain and Company notes:

‘Engaged employees go the extra mile to deliver. Their enthusiasm rubs off on other employees and on customers. They provide better experiences for customers, approach the job with energy – which enhances productivity – and come up with creative product, process and service improvements. They remain with their employer for longer tenures, which reduces turnover and its related costs. In turn, they create passionate customers who buy more, stay longer and tell their friends – generating sustainable growth.’

Firms with highly engaged employees grew revenues two and a half times more than those with low engagement levels, over a seven-year period; shares of high-trust companies outperformed market indices by a factor of three in the period 1997-2011.

Yet despite the wealth of empirical studies that has regularly shown this pattern in recent decades, such an enlightened approach remains the exception, not the norm.

Why is this?

My years of research into this issue have led me to conclude that the problems are deep-rooted and cultural. The approach to building corporations that dominated in the last century featured ‘command and control’, cost-obsessed mindsets as well as ‘command and control’ corporate structures. These features can’t be overcome with a few motivational workshops backed by an employee survey.

We’ve lived with hierarchical, departmental corporations for so long it is tempting to assume that it is the only, or most rational, way of arranging matters. In this compartmentalized world, customer service is seen as mostly or solely for the salespeople and the marketing department to worry about; while employee engagement is assigned to the HR function.

In the highest-functioning organisations, customer service is something that everyone takes responsibility for. An organisation is seen as being more a network of relationships than a structure.

If, for example, a telephone customer service is focused around cost, operatives are often incentivized to minimize the duration of each call. This leads to higher complaints, multiple calls, reduced customer satisfaction and retention. If instead the service is geared towards how the customer is feeling, and what their needs are, run by employees who care about the firm and the product, then multiple customer and commercial benefits start to appear.

It is a different mindset: if we understand the business as a set of relationships, rather than just a set of transactions, then the business risk of keeping customers waiting for a long time trying to get through on a helpline becomes more obvious.

In turn, the training and development of the people serving the customers have to be geared towards equipping staff not only with product knowledge and technical skills, but also teamwork and communication between each other so as to maximize the effectiveness of individual abilities. For consumers, it is of no use to be told that a delay or a problem is some other department’s fault. For them, you are just ‘the company’, and it is the joint responsibility of everyone there to sort out any problem.

An approach of high engagement of both staff and customers is most likely to happen when all elements of effective business leadership are joined together. For many organisations, this requires a fundamental shift from a departmentally segmented approach towards a more integrated one.

How is this done in practice?

In the employers that I have worked with, we have made most progress by integrating employee development, customer service and teams. We go beyond the annual employee survey, to building ongoing information on service and engagement levels at different teams within the organisation. We also integrate personal development, encouraging an empowering rather than a dictatorial style.

We focus on all key aspects, categorized into six: Culture, Relationships, Individuals, Strategy, Systems and Resources. This helps employers understand more how the customer views the company.

The degree of engagement, based on questionnaires, results in five levels: from Level 1 – highly disaffected staff; to Level 5 – passionate and unbounded support for the company and the customer. A particularly significant shift occurs in the move from Level 3 – functional and orderly but passionless; to Level 4 – high levels of motivation.

This approach doesn’t guarantee commercial success, but it increases the likelihood several-fold. It is, however, a comprehensive cultural and organisational shift, not a tactical approach, nor one for a single department. The challenge is considerable, but the returns are huge.

More information about this shift and how it can be achieved is provided in my book "The Management Shift -  How to Harness the Power of People and Transform Your Organization for Sustainable Success

About Vlatka Hlupic

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28th May 2015 09:37

Great post :) I think companies understand this, but can't enact it or track it accordingly. And love the idea that it isn't a 'Customer Service' strategy, it's a company shift of strategy.

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