Employee engagement is crucial to a modern CEO

The recent proposed Green Paper, and in particular its element on "stakeholder engagement", called for the voices of employees and customers to be heard in the Boardroom. It followed the PM’s U Turn on her commitment to put employees on company boards, but echoed the Chancellor’s sentiments on UK productivity.

As Mr Hammond reminded us in his Autumn Statement, UK productivity lags behind that of the US and Germany by some 30 percentage points. According to research from Qualtrics, British workers think a third of their working day is wasted. Giving employees a "voice", however, dramatically improves outcomes, because low productivity and dysfunctional employee engagement are two sides of the same coin.

Engaging employees reduces churn and boosts motivation. It is also the secret to keeping customers close, because employees are the strongest platform on which to maintain customer trust and connectivity.

In a disruptive economy, there are three key areas where employee engagement is crucial to the modern CEO. Firstly, in a world of corporate inevitabilities and surprises, CEOs need all the friends they can find, and they should befriend their employees first and foremost.

Secondly, management is also faced with tectonic shifts in consumer behavior. Our research discovered that in an aging society, 18-22 year olds have become the new power brokers in relations between consumers and corporates. Defined by the tech that shaped it, this highly vocal and well connected generation takes innovation for granted. It is now the most demanding of immediate and effective corporate responsiveness.

The Consequence of Digitization

Last but not least, employees are crucial in helping enterprise to tackle the consequences of digitization, which however efficient, can be charmless without human interaction. In a world where mobile apps and online sales are the norm, digitization can disenfranchise as many customers as it attracts. Qualtrics research showed that while 40 percent of customers welcome AI in customer service, 98 percent want a phone number on a company’s home page. Companies have to persuade customers that their desire to engage is real.

For these reasons, I welcome the Government’s commitment to having "the voice of workers heard on boards as part of establishing the best corporate governance of any major economy". It should start by making employee engagement a key metric in the task of boosting UK productivity.

But how are employees’ voices to be heard? Who does the listening in a large, modern enterprise with multiple departments, professions and customer "touch points"? Who joins the dots between what employees are thinking and how a company profits from their opinions? Crucially, who evaluates the effect of a disengaged employee on the customer?

In her speech, May recognized the synergies between tech innovation and industrial strategy. The innovation economy, after all, is outpacing the traditional economy. One of its its key metrics is the bar it sets itself for transparency, employee motivation and engagement. In these enlightened times, Mark Zuckerberg even extends a weekly invitation to his employees to phone in and ask him questions.

In our offices from Sydney to Utah, Qualtrics employees are permanently connected with one another by large TV screens mounted above water coolers. Best practice might be evidenced by such sophisticated tech firms that are intent on safeguarding their talent, but it is not exclusive to them. Traditional firms in every sector are engaging their employees just as well, without political compulsion. Some use Employee Councils while others have turned to technology.

Those that succeed soon discover the harmonies between employee and customer engagement. Customers will come if you wrap the right service levels around your products, but you cannot build the product without focusing your employees on what the customer wants.

Asking the Right Questions

Management should treat its employees with the same attention it extends to its customers. Engagement starts by proactively asking employees questions and taking their answers seriously. Increasingly, management depends on real time software to ask questions at times convenient to employees that show they understand the life in their day and make it easy for them to respond. They ask not just how employees are feeling, but what ideas and opinions they have about processes and hurdles in their customers’ journeys. Employees are just as keen to share their opinions as every other socially connected citizen. Tough questions solicit honest responses, that provide the insights to inspire change. Transparency comes through sharing insights across management, while the software benchmarks the results.

These days, tech innovation has replaced occasional employee interviews with real time engagement that keeps a pulse on motivation and wellbeing. Instant response analysis ensures management can spotlight pockets of high or low staff engagement and discover the reasons why.

The more diverse, multi-tiered and global the workforce, the easier the software makes it to contextualize the data. The more consistent and scientific the approach and the more analysis is employed, the more patterns managers will find and the more beneficial the changes they can make.

The next step is to empower employees to take charge of the customer relationship. The same software that engages employees will engage customers. It is the platform of understanding on which questionnaires are pushed out and fast data is pulled in. Through their channels of choice, it engages customers proactively and feeds their gut reactions, concerns and opinions back to management. Once employees, in whatever silo, from marketing to product design and R&D, become comfortable in its use, and with talking to customers, occasional feedback surveys that used to be fed back to the algorithm that asked it, give way to regular invitations to contribute to a product’s design, or even, as we saw with P&O some weeks back, the naming of a ship.

Gartner quantifies the cost of US employee disengagement at $450 - $550 billion per year. The cost of customer disloyalty is harder to quantify, in a world where silent shoppers, like silent voters, drift away without bothering to signal their intent. Once management is plugged into employee sentiment and employees are connected with customer opinion, however, the two become aligned and their interrelationship becomes a virtuous circle.

The government is unequivocal. It has sensed a rise in public discontent at a catalogue of corporate failures and put corporate governance high up on the UK political agenda. Management now has a unique opportunity to respond, not just by committing to represent employees and customers on the Board, but by listening to them to shape strategy.

Ian McVey, UK director, Qualtrics.

Published under license from ITProPortal.com, a Future plc Publication. All rights reserved.

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