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Putting employees and customers at the heart of transformation
TIFFANI BOVA
What conversations are taking place in your boardroom about customer experience (CX) and employee experience (EX)?
As organizations look to build back better post-COVID, the focus has typically been around the need to streamline operations, adjust product and service offerings, restore profitability and rebuild partner and supplier relationships.
But the pandemic has also acted as a catalyst for a seismic shift in what customers expect from the organizations they buy from — and in what employees expect from the organizations they work for.
If companies are to remain competitive, they will need to find ways to balance the demand for high quality, fast, digitally enabled services with the increasing pressure from consumers for a responsible, sustainable approach to business.
In the era of ‘the great resignation,’ where there is fierce competition for the best talent from a dwindling pool, employers will also need to rethink the way they treat their people, moving issues like employee well-being, skills development and flexible working much higher up the agenda.
A strategic approach to CX and EX will be fundamental to organizations efforts to navigate the tides of perpetual transformation — and the two are inextricably linked. Happy employees who feel their organization cares about them will perform better and are more likely to give customers the quality experience they are looking for.
So what is the best way to get the experience equation right?
A symbiotic relationship
The link between customer experience and sales is well established. But recent research from Forbes Insight and Salesforce suggests that the situation is more nuanced. In its 2020 report ‘The Experience Equation: How Happy Employees and Customers Accelerate Growth,’ it suggests that CX and EX enjoy an intricate relationship, where one depends on the other to gain maximum results.10
The study is based on publicly available customer and employee satisfaction data, together with interviews with 300 US-based senior executives from companies with $20million plus annual revenues.
One of the key findings is that revenue growth is linked to high EX, regardless of the priority placed on CX. Companies with both high EX and CX, however, see almost double the revenue growth [1.8x] as those who rank low on both. For a billion dollar brand, that is a $40 million dollar positive impact.
Seventy percent of executives agreed that improved EX leads directly to improved CX, which in turn leads to rapid revenue growth. The message is clear: if a company wants to drive expansion, it needs to begin by paying attention to the experience it is offering its employees.
Getting the equation right has benefits beyond improved profits. Organizations adopting this approach also find that employees are better aligned with organizational goals, more open to technological change and more likely to display innovative and collaborative behaviors. Overall, this adds up to greater organizational capacity for change and transformation.
What’s interesting to note, however, is that the equation doesn’t work as a virtuous circle, where revenue growth automatically leads to high EX and CX.
Revenue growth doesn’t necessarily make employees happier. As business booms, for example, employees may find themselves having to work harder and harder to meet customer demands. If the right resources, training and processes are not in place to support them, they will soon become tired and frustrated.
Organizational design
What implications do these findings have for organizational design? The report suggests that creating a value proposition that benefits all stakeholders is key. There is no point, for instance, in creating great customer experiences if they are not aligned to the employee experience.
A common mistake organizations make is emphasizing one part of the equation at the expense of the other. The survey found, for example, that despite recognition of the interdependent nature of the two, 65 percent of executives said CX was likely to be a more important strategic objective than EX over the next three years.
But there are ways to improve both EX and CX concurrently. Just under half of the leaders interviewed for the survey agreed, for example, that getting employees fully invested in the success of the company by structuring incentives around CX and EX would improve both. Creating teams that combine CX and EX skills is another way to achieve alignment.
When it comes to improving CX and EX, however, organizations often find themselves facing some obstacles internally — and what the research highlights is that CX and EX executives differ significantly in their views about what these are.
CX executives point to a lack of the senior management vision needed to drive change, while EX executives suggest the problem centers around employee resistance to cultural transformation.
Opinions about how to overcome these challenges is divided, but what’s clear is that close coordination within leadership teams is crucial if operational strategy is going to focus around the task of enhancing both EX and CX.
The role of leadership
The study suggests there are some lessons to be learned about how leaders in smaller companies create an environment where both CX and EX sit happily alongside each other.
Average Glassdoor employee ratings tend to be higher at smaller, high growth companies than at larger, more mature firms.
At times of rapid growth, employee engagement in these smaller firms often increases despite the pressure, thanks to empathetic leadership and a strong team ethos. In high-growth situations where this strong leadership is absent, chaos can ensue, damaging both CX and EX.
The key to success is to create an environment where individual initiative is rewarded and employees can blossom along with the company.
Four steps to success
The study highlights four steps companies can take to succeed in the new landscape of always-on transformation.
1. Align the company with strong leadership and vision: If organizations want to drive change and achieve sustainable growth, they need a clearly articulated senior management vision. The C-suite needs to instill a sense of common purpose and focus on developing an organizational culture that aligns both CX and EX to these shared goals.
2. Align operations and IT strategy to focus on CX: Nearly half of the executives surveyed said the pandemic is leading to a fundamental reassessment of how to enhance customer experience. There is likely to be greater strategic emphasis on CX rather than on EX over the next three years, but this prioritization might hamper the organization’s ability to grow rapidly. Finding the right balance is key, and technical solutions can help companies improve both CX and EX.
3. Incentivize cross-functional teams to enhance both CX and EX: The biggest organizational obstacle to improving CX and EX is when a company emphasizes one more than the other, or has conflicting priorities. To overcome this, employees need to understand exactly how their roles play a part in enhancing customer and employee experiences. There is also a need for greater collaboration between those working in EX- and CX-critical roles.
4. Invest in technologies to measure CX and EX: The average organization has 900 applications, only 28 per cent of which are currently integrated.11 It’s vital that companies stop operating in silos and making investments that are not necessarily crucial to employees’ day-to-day work. Having systems that will yield valuable data to help executives understand the variables driving both customer and employee sentiment is key.
About the author
Tiffani Bova is the global growth evangelist at Salesforce and the author of the Wall Street Journal bestselling book GROWTH IQ: Get Smarter About the Choices that Will Make or Break Your Business. She is a Thinkers50 ranked thinker.
Footnotes
10 “The Experience Equation: How happy employers and customers accelerate growth”, 2020 Forbes Insights, sponsored by Salesforce.
11 https://www.mulesoft.com/lp/reports/connectivity-benchmark