Employee Experience Redefined

EMPLOYEE EXPERIENCE REDEFINEDDriving Growth and Differentiation

Through a New Kind of Relationship 2016

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.

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

EMPLOYEE EXPERIENCE REDEFINED: Driving Growth and Differentiation Through a New Kind of Relationship North Highland 3

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.



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

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.

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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


EX can be described as the sum of all interactions between an employee and his or her employer as they are perceived, understood and remembered by the employee. This reflects a journey through the stages prior to, during and after the work arrangement. Each stage contains interactions that cumulatively create the total experience. Intentional or not, good or bad, every organization offers an EX.

Traditional views of EX do not fully appreciate the interdependent and changing nature of the employee/employer relationship. Once a service-for-hire transaction, the relationship is evolving into what is more akin to a social contract. Employees logically expect transparency, authenticity, simplicity and relevance. They expect an experience that delivers on a compelling employer brand promise and the expectations it sets.

To create a compelling EX, organizations must understand the influencing factors and recognize the increasingly complex, interdependent system in which they exist. Individuals’ work experience is influenced by how they function (what they do), which in turn is dependent upon the organizational system in which they work (where they work) and their personal attributes and values (who they are).6

THE EMPLOYEE EXPERIENCE ECOSYSTEM

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THE EMPLOYEE CONTEXTCopyright ©2016 The North Highland Company


Within an organization, a complex ecosystem of interactions across services, processes, products, tools, technologies, environments, and events is at play, all impacting the EX. As in any complex system the relationships of the independent parts are dynamic and interrelated.

In addition, the experience is impacted by an equally influential external system that includes the organization’s customers, suppliers, vendors, partners, market and community. The employee’s perception from the countless internal and external interactions form the basis of the employer brand, which serves as the pledge of what to expect, and is an expression of who the organization is, what it does, and what it offers as its value proposition to employees.

EX embodies an organization’s ability to connect to an employee’s reason, emotion and purpose across all interactions, internal and external. The delivery of compelling and sustainable EX requires a foundational understanding of—and an ability to respond to—articulated and anticipated employee needs, wants and motivations at the different stages of their relationship with the organization while managing internal and external influencing factors.EMPLOYEE EXPERIENCE ECOSYSTEM

Copyright ©2016 The North Highland Company

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EMPLOYEE EXPERIENCE ECOSYSTEMCopyright ©2016 The North Highland Company

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

10 North Highland EMPLOYEE EXPERIENCE REDEFINED: Driving Growth and Differentiation Through a New Kind of Relationship EMPLOYEE EXPERIENCE REDEFINED: Driving Growth and Differentiation Through a New Kind of Relationship North Highland 11


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

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.


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


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.”



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

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.


EMPLOYEE EXPERIENCE REDEFINED: Driving Growth and Differentiation Through A New Kind of Relationship

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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

Lisa G. Morris Global Employee Experience Lead

[email protected]

Joni Roylance Master Practitioner, Employee Experience

[email protected]

Rob Sherrell Global Head of Customer Experience

[email protected]

North Highland’s Employee Experience (EX) Solution

North Highland is unique in our ability to help our clients design and bring to life differentiated employee experiences across all aspects of work to foster long-term advocacy. Our unifying, purpose-driven approach is human needs-centered and integrates our diverse capabilities. We empower our clients to continually align their values and behaviors with their employer identity and with what people want most in their employment experiences.

ABOUT NORTH HIGHLAND

North Highland is a global management consulting firm known for helping clients solve their most complex challenges related to customer experience, transformation, performance improvement, and technology and digital. We add value and support our clients across the full spectrum of consulting, from strategy through delivery. In concert with our experience design division, Sparks Grove, we bring together business strategy and creativity to help clients connect to people’s reason, emotion, and purpose.

North Highland is an employee-owned firm, headquartered in Atlanta, GA, with more than 3,000 consultants worldwide and 60+ offices around the globe, and has been named as a “Best Firm to Work For” every year since 2007 by Consulting Magazine. The firm is a member of Cordence Worldwide, a global management consulting alliance. For more information, visit northhighland.com or connect with the firm on LinkedIn, Twitter and Facebook.

Our EX Services

• Employee Value Proposition Development

• Employee Experience Insights & Analytics

• Employee Experience Strategy & Design

Copyright ©2016 The North Highland Company. All Rights Reserved.

AUTHORS

If you are interested in learning more about our Employee Experience services, please visit us at northhighland.com or contact Lisa G. Morris at 304.685.9316.

mailto: [email protected]

mailto:rob.sherrell%40northhighland.com?subject=

http://www.cordenceworldwide.com

Employee Experience Redefined

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