2. 2 North Highland EMPLOYEE EXPERIENCE REDEFINED: Driving Growth and Differentiation Through a New Kind of Relationship
We live in a world that is hypercompetitive, global, networked and ever-evolving.
In this human era, people seek purpose and long for authentic and meaningful connections.
Social media and instant access provide unprecedented levels of transparency for enterprises
and individuals alike. Simultaneously, the digital revolution continues to force disruption across
industries, demanding new business approaches, strategies and ways of working. As a result,
customer experience has gone mainstream.
In 2016, nine out of 10 companies planned to compete
primarily on the basis of customer experience. Nothing—
not price, not product—is more important than the
experience you provide.1
The characteristics of a compelling experience are in
a constant state of flux. In the push to achieve growth
through differentiation, organizations have doubled
down to provide superior customer experiences,
chasing evolving expectations and higher-level needs.
However, in doing so, many organizations have failed
to focus on the experiences of their most important
competitive advantage: employees.
Today, the definition of employee is not as straightforward
as it was at the start of the 20th century. At one time, any
individual who worked for an organization in exchange for
compensation was an employee, and there was little room
for confusion. Today, in order to recognize the changing
definition of work, the definition of employee must
likewise expand to include the full-time, part-time, casual,
contingent, shift and on-demand workers, daily hires,
weekly hires, outworkers, would-be applicants, applicants,
candidates and alumni.
3. Not only has the definition of employee expanded, but
so has the nature of work. In today’s state of constant and
immediate connectivity, work is approaching a persistent
state. Organizations now demand real-time responsiveness
and an “always-on” mentality from employees.
In exchange, employees demand more, too—more autonomy,
more choice, more meaning, more flexibility, and more
emotional intelligence and empathy from their employer.
They want to be individually seen, heard, and valued and
they want to be part of something bigger than themselves.
Individuals today aren’t seeking a job or even a career.
Instead they seek experiences from employers that are
reciprocal, intentional and inspirational. In this human era,
which is ruled by experience, customization, and continual
evolution, organizations that fail to focus on Employee
Experience do so at their own peril.
“Your employees are your
company’s real competitive
advantage. They’re the ones
making the magic happen—
so long as their needs are
being met.”
- RICHARD BRANSON
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4. THE EMPLOYEE CHALLENGE
Employees are a complex, highly fragmented group who have varying needs, motivations
and expectations. They are more dynamic and emotional than customers, making it significantly
more challenging to satisfy them and manage their perceptions.
In the human era, the employment relationship provides meaning and value to the employee, shaping
and enabling their sense of self. Employees seek a more integrated way of life where work pairs with
their personal and emotional needs. A person’s job is woven into the fabric of who they are. It impacts
how they identify themselves; it dictates their ability to support themselves, their family and their
community; and it impacts their pursuit of self-actualization and achievement of purpose.
Delivering a compelling employee experience is an untapped source of differentiation in today’s
talent-driven marketplace. An employee’s work experience affects their thoughts, feelings and
behaviors. Positive or negative, the impact manifests in engagement levels, retention, loyalty,
customer satisfaction and overall business performance. Organizations that adopt human-centered
design approaches that recognize employee needs and aspirations, both articulated and anticipated,
will reap the benefits of a more engaged, empowered, and productive workforce.
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Different eras have showcased changing approaches to
achieving organizational objectives. During the Industrial
Revolution, factories, shops and railroads thrived by
tirelessly pursuing efficiency to avoid wasting materials,
energy, money and time. Once efficiency became table
stakes, organizations began to focus on effectiveness—the
ability to perform a function with optimal levels of input and
output—as an additional source of differentiation.
With either focus (efficiency and/or effectiveness) the
employee’s motivation to help the organization succeed was
overlooked. Employers eventually realized they were losing
their best people and could no longer attract the people
they wanted, costing them money and affecting their ability
to compete.
As a result, in the early 1990s, organizations began to invest
in employee engagement, recognizing that employees
will invest more in work when they are engaged. Yet after
almost two decades with this focus, these engagement
efforts are consistently underperforming. In 2015, only 21
percent of employees globally were highly engaged. In
the U.S., the majority of employees—51 percent—were not
engaged. And perhaps most critically, another 17 percent
were actively disengaged.2
The challenge lies not in convincing leadership of the
benefits of engagement. The stats are there, and the value
is proven if engagement can be achieved. For example,
work teams in the top quartile in employee engagement
outperform bottom-quartile teams by 10 percent in
customer satisfaction ratings, 21 percent in productivity,
and 22 percent in profitability.3
What’s more, a five percent
increase in employee engagement is linked to a three
percent increase in revenue growth in the subsequent year.4
THE EXPERIENCE REVOLUTION
6. So what is the problem? The real challenge lies in the
misguided approaches many organizations are taking
to activate and measure engagement. Organizations are
throwing resources at momentary activities rooted in static,
poorly executed measurement surveys. They then launch
endless check-the-box action plans, one-off initiatives,
and siloed point-in-time solutions. Sustained, lasting
engagement and commitment is rarely achieved since
this short-term perspective does little to counteract the
changing nature of engagement on an individual level.4
Ultimately, many employers are missing the big picture.
It’s time for a new approach. Today’s workforce requires
a more strategic, long-term, sustained view that knits
engagement into every interaction between and within the
organizational system...internally and externally. This is the
approach required to truly capture the hearts, minds and
hands of employees.
This is Employee Experience. This is EX.
EFFICIENCY EFFECTIVENESS ENGAGEMENT EXPERIENCE
CURRENT FOCUS
%ofMARKET
PRE 1990 1990
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7. EX ripples into other realms: 69 percent of job-seekers
say they are less likely to buy from a company they had
a bad experience with during the interview process,
while a similar number is more likely to buy from a
company after a positive job-application experience.5
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10. From our research comprised of hundreds of studies across multiple disciplines, decades of
applied work experience as in-house leaders and strategic consulting engagement partners
with dozens of Fortune 500 employers and an equal number of start-up, growth companies
and mid-market employers, we have developed an EX philosophy with five core principles.
Organizations that commit to the five core EX principles are able to differentiate themselves
and fully realize their greatest competitive advantage. These principles help create an
EX that is ongoing and reciprocal, offering an authentic value exchange between an
organization and its employees.
EMPLOYEE EXPERIENCE PRINCIPLES OF DIFFERENTIATION
Embrace the Whole Human
Choose Connection over Utility
Synchronize and Evolve Experience, Brand and Culture
Align Internal Functions Across Teams
Put Employees First
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Whole Human in Action:
Google
Google exemplifies EX through its range of human-centric
benefits, both small and large. These include: continuous
learning opportunities for Google employees, leave-options
for various life stages and for all definitions of family,
financial planning and retirement services on-site
wellness/medical resources, free healthy food, death
benefits (continuous salary for family), charitable donation-
and volunteer-matching and flexible schedules.
These opportunities enhance the employee experience by
addressing multiple levels of human needs. Flexible work
schedules are not a perk; they are an acknowledgement
that an employee has aspects of their life that extend beyond
work—they go to the dentist, have family obligations, or may
just be a morning person.
Differentiated EX takes into account who
employees are and what they do. Embracing
the whole human includes a multi-faceted
experience that satisfies higher-level needs.
Employees are not just workers. They are
people in pursuit of purpose and connection on
intellectual, creative, emotional, social, physical
and spiritual levels. They bring their own personal
story, which is the result of influences and
experiences that shape their life, and which in turn
affects how they interact with the organization.
Principle 1: Embrace the Whole Human
12. Manfred Max-Neef articulates a model of human needs that goes above and
beyond Maslow’s expanded hierarchy.7
In addition to the more traditional
pyramid of fundamental needs, Max-Neef identifies how those needs must
be satisfied through “being, having, doing” and “interacting.” Foundational
understanding of employee expectations begins with understanding the
needs all humans share.
BEING. HAVING. DOING. INTERACTING.
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13. Differentiated experiences build relevance and
value for the employee, knowing that employees
will deliver value and meet organizational
objectives in return. Rather than a one-sided,
organization-focused arrangement, employees
now expect a trusting, mutually beneficial
relationship with their employer. In order to
attract and retain top performers, employers
can no longer think in terms of what they can
“get out” of employees.
Connection in Action:
Coca-Cola Enterprises
In 2010, Coca-Cola Enterprises wanted to better engage and retain
their employees after significant changes and restructuring occurred
in the organization. They wanted to ensure that they understood
and anchored to the things that were most important to employees,
regardless of the changes occurring. After collecting feedback
from employees on what was most valuable to them, Coca-Cola
Enterprises articulated their EVP (Employer Value Proposition) to
be “Connect, Grow, Win,” which aligned with employee motivators
as well as the overarching business objective of being the best.
By starting with the themes that connected most with employees,
Coca-Cola Enterprises was then able to leverage those themes to
evolve its people strategy.
“Just because the business is changing, our commitment to
employees doesn’t stop,” said Rodney Jordan, Director of Employee
Communications for Coca-Cola Enterprises during this transition.
Principle 2: Choose Connection over Utility
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14. The employer brand promise must manifest
across the EX. Differentiated EX demands that
brand, culture, and context be continuously
aligned and advanced. Savvy organizations
know that employees are brand ambassadors,
positioning them as a catalyst for building
market share.
Principle 3: Synchronize and Evolve Experience, Brand and Culture
Synchronicity in Action: Etsy
Etsy’s global community marketplace is a meeting place for
entrepreneurs, artists, and consumers. The organization
weaves its brand into the employee experience through
intentional activities that celebrate the company’s commitment
to fun, creativity, and “keeping it real.”
Employees share lunches and “Crafternoons,” where
coworkers come together to create art and express their
individual visions. Etsy formalizes its brand promise as one of
the largest B corporations in the world: “We are committed
to using the power of business to create a better world
through our platform, our members, our employees, and
the communities we serve. At Etsy, there is no separation
between customers, employees, the mission, and the brand.”
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Differentiated EX encompasses all internal
interactions that affect employees spanning
all functions and departments in any part of the
organization—not just the HR department.
Interactions with the external environment
including customers, brands, competitors,
communities and social media contribute to EX
as well. EX generates lasting personal affection,
engagement and investment only when all
interactions are orchestrated and provide
ongoing reinforcement of the employer brand
promise.
Alignment in Action: Airbnb
Airbnb has expanded the role of Global Head of Employee
Experience to include management of other functions such as
facilities, social responsibility, marketing and communications.
As a result of these efforts, it has a 90 percent recommend rate
from employees as a great place to work.
“At Airbnb we are focused on bringing to life our mission of
creating a world where you can belong anywhere, by creating
memorable workplace experiences, which span all aspects of
how we relate to employees, including how we recruit them,
develop them, the work environment we create with them, the
type of volunteer experiences we offer them, and the food we
share together.”
-Mark Levy, Global Head of Employee Experience
Principle 4: Align Internal Functions Across Teams
16. The beneficiaries of a differentiated EX go beyond
the employee to reach colleagues, customers, the
organization and the surrounding communities.
Prioritize and invest in employees first, and
customer engagement and other business
outcomes will follow. Thriving, engaged employees
outperform on productivity, quality and customer
satisfaction, ultimately increasing revenue, profits,
and market value.
Principle 5: Put Employees First
Employees First in Action:
The Virgin Group
The Virgin Group holds over 400 companies with a net
worth of $5.5 billion, yet they take a unique approach to
business: prioritizing employees first, customers second
and shareholders third.
“If the person who works at your company is not appreciated,
they are not going to do things with a smile,” explained
Virgin CEO Richard Branson. “By not treating employees
well, companies risk losing customers over bad service.”
At Virgin, the benefits of Employee Experience are felt
beyond the end customer.
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YOUR GREATEST DIFFERENTIATOR
Exemplary EX is both elegantly simple and understandably complex. It
demands that organizations reflect on every brand experience, every
message, every individual. It requires organizations to design and
measure EX with the same meticulous care and investment they put
into customer experience.
The opportunity is there for the taking. Your organization is already
offering an EX, and every employee is already experiencing your
brand. The potential lies in your ability to harness that experience to
build authentic connections with your employees—connections built
on trust, meaning, and shared purpose—to drive greater engagement
and commitment, and ultimately better business outcomes.
Are you going to continue with status quo,
or are you going to shape the standards for
the next era of the world at work?
1. Gartner, 2014
2. Gallup, January 2016
3. “State of the Global Workplace,” Gallup, Oct. 2013
4. Aon Hewiit, 2015.
5. 2016 Candidate Behavior Study, Careerbuilder.com
6. Happiness Works, 2016
7. Real-Life Economics: Understanding Wealth Creation, ed. Paul Ekins & Manfred Max-Neef, Routledge, London, 1992