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Why the employee is the new customer
Key takeaways
- Generous employee perks have become a way for companies to compete for the best talent.
- Businesses that adopt an employee experience-led model are more competitive and profitable than those that don’t.
- Creating an employee-led culture is bigger than HR and starts with leadership.
In the last few years, tech companies have been generating a buzz through the exciting employee perks they offer. Google famously provides free gourmet meals to employees, Netflix offers unlimited parental leave and Spotify goes as far as paying for employees’ fertility treatment.
The concept of employee experience represents a paradigm shift on where organisations place value, and a fundamental change in the way organisations think about and provide for their employees.
Drawing on lessons from design thinking and customer experience, employee experience analyses the moments, interactions and structures that amount to being an employee.
Taking a human-centered approach, it views an organisation from the employee’s perspective to understand what engages, energises and enables them to do great work. Employee experience pervades culture, technology and physical workspace. And it’s been embraced widely in the tech and startup landscape: Zappos once celebrated a 10 hour 43 minute customer service call¹ and Airbnb appointed a chief employee experience officer².
But what’s driving this shift? Why are organisations investing so heavily in this? How does it translate to a competitive advantage?
A competitive advantage
Organisations that prioritise employee experience are more competitive than those that don’t, according to research profiled in the Harvard Business Review³ analysing more than 250 organisations.
It found that experience-led organisations that create places people want to work at are four times more profitable, generate double the average revenue yet are 25% smaller than non-experience led organisations. They are therefore more productive and innovative. Employee experience is the key to a competitive advantage.
At its core this shouldn’t be surprising. For decades, business leaders have heeded the timeless rule – look after your employees and they will look after your business. In 1918, Australian supermarket Coles’ founder Sir George Coles said a proprietor “has to have contented staff… [and] earn the respect of his fellow men.”4 While the message has not changed, the context has.
Many companies that sit atop the S&P500 today are relatively recent entrants to the market (think Facebook, Amazon and Google). The legacy companies they’ve replaced, those with once-assured markets, ask themselves what they can learn from them, and how they can stay relevant.
In an age of disruption these are critical – if not existential – questions.
The reinforcing cycle
Experience-led organisations understand that improving employee experience enhances customer experience and ultimately increases shareholder value.
Engaged employees are excited to serve customers. More satisfied customers return and buy more. Employees are energised by this success, find meaning in it and remain focused on doing more to delight their customers. Unlocking this reinforcing cycle means enhanced performance and return for shareholders.
Building a high performing culture
For startups beginning with a clean canvas like Zappos, this reinforcing cycle between employee experience and customer experience is embedded in its DNA. Since its founding, and even after a reported US$1.2 billion acquisition by Amazon in 2009, Zappos has been dedicated to its employee culture, counting as its core values: ‘build a positive team and family spirit’ and ‘deliver WOW through service’5.
Established organisations are also now reaching the understanding that employee experience is a key lever to uplift performance by creating a high performing culture. However, unlike a startup, an established business isn’t starting from a blank canvas, which means the challenge is transitioning to a higher performing culture, poised to innovate and deliver results. This transition requires a change to the fundamental culture of the organisation.
Leadership takes the lead
Employee experience starts with culture, applying an enterprise wide paradigm shift that is bigger than human resources alone. The end goal is to build a workplace people care about, where they feel aligned to the organisation’s values; feel supported, enabled and empowered to do their job, innovate and serve customers. This is the foundation of a high performing culture.
Who builds this culture?
HR is there to support and enable a culture, not change it. Similarly, building this culture can’t be left to technology alone. For instance, simply giving a team a collaboration tool like Slack may enhance their productivity but alone it won’t give you a high performing team.
Creating a high performing culture needs to come from the business and leadership. It is then reinforced by the physical environment, policy and procedure and supported by technology, but it starts with leaders setting the values and objectives to guide the culture.
Employee experience provides business leaders with a framework, but it requires a paradigm shift in their thinking. Based on the realisation that employee experience starts when their people wake up in the morning. Can they think from their people’s perspective: do I have a positive mindset about going to work? When I get there do I feel supported? Is my work meaningful? Am I leaving a mark?
A defined strategy
Transitioning to a high performing culture, that designs for customer and employee experience starts with a defined strategy.
PwC Australia, for example, which was recently ranked by LinkedIn6 as the most sought after place to work, embodies a focus on diversity and inclusion through our BXT approach which applies a Business, eXperience and Technology lense to solve business challenges. By melding people with diverse skill sets into one team, we engage with clients and each other in a unique way.
This kind of diversity makes us relevant to our clients and our people get to work on important problems and feel like they are leaving a mark. This in turn makes our people more excited to come to work the next day and solve our clients problems.
But culture is only the first link in the chain.
Unleashing productivity and innovation
According to co-founder of Airbnb, Brian Chesky7, a stronger corporate culture results in less corporate process.
“When the culture is strong, you can trust everyone to do the right thing,” he said.
“People can be independent and autonomous…and if we have a company that is entrepreneurial in spirit, we will be able to take our next ‘(wo)man on the moon’ leap.”
In organisations that are taking the next steps to strengthen their employee experience by investing in enabling and empowering their people through policy, technology and physical space, the productivity gains speak for themselves.
In an age of rapid change, increasing competition and talent mobility, the employee experience strategy, and its potential benefits, is only beginning.
References
- www.huffingtonpost.com.au/entry/zappos-10-hour-call_n_2345467
- www.forbes.com/sites/jeannemeister/2015/07/21/the-future-of-work-airbnb-chro-becomes-chief-employee-experinece-officer/#29c021814232
- https://hbr.org/2017/03/why-the-millions-we-spend-on-employee-engagement-buy-us-so-little
- www.coles.com.au/about-coles/centenary
- www.zapposinsights.com/about/core-values
- http://www.afr.com/leadership/workplace/pricewaterhousecoopers-ranks-first-in-top-companies-australians-want-to-work-for-20170516-gw66ys
- https://medium.com/@bchesky/dont-fuck-up-the-culture-597cde9ee9d4
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