The Business Value of a Great Employee Experience

The following was transcribed from a recent interview on The Agile Brand with Greg Kihlström podcast. 

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Today we’re going to talk about the business value of creating a great employee experience. To help me discuss this topic, I’d like to welcome Annette Franz, Founder & CEO of CX Journey, and best-selling author.

[Greg Kihlstrom] Let's get started and dive in here on our main topic, and that's going to be employee experience and really how a great employee experience can create business value. So to get started, I always like to start with definitions. So how would you define employee experience?

[Annette Franz] Yeah, absolutely, and it's funny because I like to start with definitions, too, because it gets us all on the same page. When it comes to employee experience, a lot of people confuse it for something else, right? I define it as the sum of all the interactions that an employee has over the duration of her employment relationship. I guess, and then also some actions and capabilities that enable the employee to do the job, and, probably more importantly, the feelings, emotions and perceptions about all of that, right? I think that's really important. And I think a lot of folks confuse it with employee engagement. And I view employee engagement as an outcome, right? So if we do all those things right; if we get the employee experience right, then we can look at employee engagement as an outcome of all of that.

I like that you made that distinction there because there's a lot of terms that get thrown around and a lot of hashtags thrown out and social media posts and everything, but, yeah, definitely, experience is really everything, and there's a lot of subsets of that, for sure. You talked about employee experience and employee engagement. What's the difference between employee experience and company culture?

That's a good question because I think a lot of times people confuse the two, or think they are the same. So culture is defined, in my mind, as core values plus behaviors, right? We have this set of core values that we have defined. And then we also define, A, what they mean, and then, B, give me some examples of acceptable and unacceptable behaviors for each of those core values. So culture is very much the foundation of the organization, and I often view it as a precursor to the customer experience. And culture is deliberately designed to be, or you get the one you design or the one you allow. But if we deliberately design the culture to be one that is people-first, people-centric, then I think that ultimately then leads to doing all the right things in order for the employee to have a great experience as well.

You mentioned people-centric, and I would imagine the employee people-centric can translate to customer-centricity as well. But, to start, what does go into making a good employee experience?

I break it down into what I call the soft stuff and the hard stuff. And the soft stuff, I think, is what I would hope people would think about when they think about employee experience, which is there's opportunity for growth and development and ways for the employee to thrive, right? There's feedback and coaching and they're appreciated and they're recognized for the work that they do. Probably most importantly, they've got leadership that cares about them, right, takes the time to really get to know them and care about them as humans, not just, you know, cogs in the wheel of success or whatever you want to call them, right? And other things, like they know that their work matters and how it impacts the goals of the business. They feel empowered, and, you know, really, wellness and well-being and that connection to your success is really important as well. So that's what I call the soft stuff. 

The hard stuff is more around the tools and the training, having the resources that they need to do their jobs. Policies are not outdated; processes aren't broken; and they have the workspace in the workplace to do their jobs, right? When I first start working with clients, I'll interview the executive team, some employees and some customers. And this one client that I did this for, there was an employee who said something that was just, in my mind, just really profound and really talks about how important this hard stuff is, too, right? He basically said, you know, “I don't have the tools, the training, the resources, and my policies are outdated; my processes are broken; I don't have what I need to serve my customer the way that the customer deserves to be served.” And I was like, wow, that’s an employee who gets it, and that's a very powerful statement.

You mentioned the soft stuff, the hard stuff; there's a lot of things to be considered. Again, experience is kind of everything, right? So how do you measure this? What perspectives should be considered, and is there too much measurement, or is there such a thing, or how do you recommend measuring things in a meaningful way?

I think measurement, for the employee, is going to be similar to how we measure the customer experience. You know, we look at some of the typical things, right, satisfaction, happiness. Employee happiness is a good measure as well; the engagement scores, the engagement questions. You know, Gallup has some great, you know, Q12 for measuring engagement. I like to look at how likely are they to recommend the brand as an employer, right, and then also how willing are they to stay? You know, are they considering looking at a different job in the next 12 months? We can also look at trust, and trust in their leadership and how well they believe that leadership trusts them, too. And you can look at other things, in the sense of, you know, self-reported, their well-being; how do they feel that they're being taken care of within the organization? You can look at hard data and things like that as well, in terms of productivity and that. I would also take a look at training or learning opportunities within the organization and how much of that they have and how they feel about those opportunities as well. So, you're right; there are a lot of different ways that it can be measured and a lot of different things that we can look at there.

I know, with customers, I'll run into the concept of survey fatigue, right, where, you know, we would love to get information about every single interaction and send a survey out to get that latest info, but at a certain point, it's diminishing returns, if not worse. What about with employees? What should leaders be thinking about there? Of course they want to know what's going on, and in a large org especially, there's no way they can have a one-on-one with everyone that they manage, let alone everyone in the company. How should a leader think about balancing getting the information and, again, the fatigue, the eye rolls of, “Oh, here's another survey.”

Yeah, exactly. I think there are a lot of different ways that we can listen to employees beyond surveys. One of the things that I recommend for my clients is doing what we call “stay interviews,” right? Stay interviews are, you know, hopefully, as a manager, as a leader, you're having one-on-ones with your employees, right? And then, rather than waiting until they leave and doing that classic exit interview, do a stay interview. So when you're meeting with them on a regular basis, ask them about, you know, how are they feeling? “What can I do differently to ensure that” – you know, ask the kinds of questions, really meaningful questions, to get things right now before somebody's even thinking about getting out the doors. 

The other thing that I recommend for, to your point about, you know, the Ceo can't meet with every single employee, especially in large organizations. One of the things that I have executives do is what I call an employee listening tour. And it's going out into the field and meeting with groups of employees. You know, it's sort of the opposite of a town hall, right? In a town hall, the leader gets up and talks to a group of people. In a listening tour, the employees are doing the talking and the executives are the ones who are listening, right? So I think that's an important way to get feedback. But I think the bigger point of getting the feedback is that you've actually got to do something with it, right? One of the things that I add to employee surveys, at the end of the survey, I'll ask, “Do you believe that your leaders will do something constructive with this feedback,” right? And it's shocking how often the answer there is no. So I think that's a problem.

The “stay” interview thing in particular might have prevented me from leaving a company back in the day as well, if they would have, and probably some of my co-workers, too. But great thoughts. So that’s a missed opportunity. What else might leaders be getting wrong or just not considering when they're thinking about measuring and really trying to quantify the employee experience?

Well, there's two things that are top of mind for me on that. One of them is they focus on the participation rate. I cannot tell you how many times, you know, “Oh, well, we've only got 70 percent of our employees,” or, “Oh, we’re at 90 percent. If we get 100 percent, we'll have a pizza party,” or things like that. And it's like too much focus on that and not enough on the other thing. And also, the other issue would be surveying too frequently. I actually had a client that was doing employee surveys every quarter. And it was the exact same survey every quarter. They, A, didn't do anything with it. A quarter is not enough time to even implement, you know, some of the grand changes and things that needed to happen. And the employees caught onto this, and because nothing was being done, they would just copy and paste the comments and things like that. They would just copy and paste them from one quarter to the next, the same thing. So those are a couple of problems that I see out there, definitely.

And so last question on this topic, before we move on to talking a little more about customer experience. I wanted to talk about the idea of business value and employee experience. And I think, as having been a CEO and managed a company or two, certainly the cost of turnover and things like that, that's a negative when employees are leaving. But in terms of positive business value, how should leaders be looking at employee experience in terms of a positive net value, not just a positive business value, not just a risk mitigation or loss aversion or something like that?

Yeah, and there's this graphic that I had just recently posted out on Linkedin, and it's also in my second book, “Built to Win.” It's this whole notion of that connection between culture and business outcomes. But, you know, I said culture was a precursor to the employee experience. So if we've got that great foundation in place, and ultimately that great foundation helps to create a great employee experience, when employees are having a great experience, they achieve their outcomes, right? They're engaged. They're happy. They're productive. The quality of the work that they do is solid. We're looking at loyalty as well. They’re, again, having a great experience, so they're more creative and they're more innovative, and that all drives a great. experience for customers then, too, right? So customers achieve outcomes as well, right? They have a better experience. They feel that they've received value. Their jobs are done. Their problems are solved. They're happy. They're satisfied. They're loyal, as well. And ultimately that leads to business outcomes, right? Employer and talent branding is spot-on, because employees are talking about the business, so it's easier to recruit other employees; other business outcomes, obviously, you know, growth, revenue, profitability, customer lifetime value. And they just have this competitive advantage. So it really is that connection between culture to employee experience to customer experience to achieving those business outcomes.

To follow onto that, then, I wanted to talk more about that relationship between employee and customer experience. So, and you went into this a little already, but how would you describe that relationship that exists between employee and customer experience?

I believe that employee experience is a driver of the customer experience. There's this spillover effect, right? There's this tendency of, you know, when employees have a great experience, it drives a great experience for your customers. And this is why I talk about, if we put customers first, we have to put employees more first because they really are at the core of the business, in terms of, you know, if we don't have employees who design and build and sell and service and implement and deliver; if we don't have people doing all that, then we have no need, no reason to have customers, right? Somebody's got to do that stuff. So I think that's an important way to look at it. And it's so funny because people often question, “Well, which comes first?” And it's not even a chicken-and-egg story. It's simply, if you don't have employees, you don't have a company, right? And if you don't have a company, you obviously don't need to have any customers, either.

So are there any warnings or downsides, or just things to watch out for, when you do closely tie CX and EX? And is there a downside to it?

Yeah, I honestly don't think so, because what it does is, if we can shine a spotlight on both the employee and the customer, obviously, that's a good thing. I can't really come up with any downsides because, I mean, at the heart of the business is people, you know. And so I don't really see any downsides to that. 

I was kind of curious what you were going to say because I couldn't think of any myself. So we’re agreed then. So, you know, I’ve seen various reports and research and stuff, but how do you think organizations that really get it, and they understand this relationship between EX and CX, how do they measure it and make it meaningful, not just have some correlation-causation, but really make it meaningful to the organizations?

Yeah, it's interesting because, you're right, there's a ton of research out there that shows that connection, right, and how ultimately, if we focus on the employee experience, it's great for the business and business outcomes. I think the one thing that I've done in the past, and it does go back to correlation, or causation, or whatever you want to call it, right? I had a client, and this was the first time I did it, years ago, and I still view it this way. We did our customer satisfaction surveys and then we did our employee satisfaction surveys. And what I tend to do is ask similar questions on both, so that I can get an understanding. 

So I'll give an example. This particular company, we did a relationship survey, and we asked different questions about the customer's relationship with the brand. And at the time we could get away with 50-question surveys, right? We can't do that anymore – but asked about each department within the company that they interacted with. And at the same time, we were doing an employee satisfaction survey. And one of the things that came out was customers were very dissatisfied with the account management group. And we went over to the employee satisfaction survey, and we found that the account management group was the least satisfied of the employees, right? There were a lot of issues in that department, a lot of struggles. And this was early in my career. It was really interesting to see that correlation being played out in real life in front of me.

But I think that what people do today is they'll do eNPS and NPS, you know, ask similar questions on those surveys and take a look at that as well. I think there is something to be done with, obviously, cross-tabbing and – oh gosh, that's such a historic term, but cross-tabbing and segmenting and looking at the data by different cuts, right, whether it's department or it’s product, or business unit, or whatever it is, just to sort of suss out where those correlations are happening and where there are issues.

About the Guest

With 30 years in the customer experience profession, Annette Franz, CCXP, founder and CEO of CX Journey Inc., is an internationally recognized customer experience thought leader, coach, keynote speaker, and author of Customer Understanding: Three Ways to Put the "Customer" in Customer Experience (and at the Heart of Your Business) and Built to Win: Designing a Customer-Centric Culture That Drives Value for Your Business. She is a Certified Customer Experience Professional (CCXP) and an official member of the Forbes Coaches Council.

About the Host, Greg Kihlström

Greg Kihlstrom is a best selling author, speaker, and entrepreneur and host ofThe Agile Brand podcast. He has worked with some of the world’s leading organizations oncustomer experience, employee experience, and digital transformation initiatives, both before and after selling his award-winning digital experience agency, Carousel30, in 2017.  Currently, he is Principal and Chief Strategist atGK5A. He has worked with some of the world’s top brands, including AOL, Choice Hotels, Coca-Cola, Dell, FedEx, GEICO, Marriott, MTV, Starbucks, Toyota and VMware. He currently serves on the University of Richmond’s Customer Experience Advisory Board, was the founding Chair of the American Advertising Federation’s National Innovation Committee, and served on the Virginia Tech Pamplin College of Business Marketing Mentorship Advisory Board.  Greg is Lean Six Sigma Black Belt certified, and holds a certification in Business Agility from ICP-BAF.