Author: Nic Marks

“Our people are our greatest asset” has been uttered by many CEOs for a long time. However, most of them don’t focus enough on employees’ experience because they are too busy setting their sights and business targets on improving the customers’ experience. 

Even Google says so … doing a simple Google search on “customer experience” gives nearly 50 million hits whereas one for “employee experience” returns less than 500,000.[i]  Ironically this lack of attention on employees almost certainly undermines the business goal of creating happy customer experiences; because how can employees be expected to care about customers’ experience when they don’t feel the business cares about theirs?

I am not suggesting that businesses should move their focus away from customers: it is clear that companies who successfully create great customer experiences will be rewarded with increased sales and a growing customer base. The rewards are endless; greater customer retention, increased customer referrals working towards the ultimate goal of driving down the cost of sale.

All good business sense but it also makes great business sense to think about employees’ experience.

Bring It Into Focus

Companies with great cultures are rewarded with loyal enthusiastic employees who are more productive, more creative and will help you in your talent attraction. It doesn’t take a genius to work out that happy, engaged employees will naturally create great interactions with customers.

Despite this, CEOs and businesses are not focusing on employees’ experience of work to nearly the same degree as customer’s experience.

This is what behavioural economists, such as Nobel prize-winner Daniel Kahneman, call a “focusing error.” These errors occur when people put too much importance on one element of a problem, resulting in an inaccurate prediction of a future outcome. They are a type of cognitive bias which is caused by the fact that when we make estimates we tend to start with the information we have in front of us and then make incremental adjustments and iterations from that starting assumption.

Clearly, the information that CEOs most often have in front of them are financial metrics. This is their normal starting place for understanding problems. Indeed most of them have been doing this for their whole career with a typical CEO background being in finance or sales.[ii] They are used to cashing out problems in terms of hard currency rather than soft measures of experience.

Ignore the employees’ experience and you will undermine the customers’ experience.

It is much easier for them to make the intuitive leap from customer experience to revenue generation than from the employee experience, which is cognitively more distant. This is the heart of the “focusing error” – too much focus on one element of the problem and not enough on another – in this case the employees who are critical in generating positive customer experiences. Ignore the employees’ experience and you will undermine the customers’ experience. In fact there is a danger of a double negative here as one study showed that if retail employees weren’t happy then even if customers said they were satisfied with the product they were still less likely to rebuy.[iii] Because the experience of purchasing the product wasn’t great so why should they buy from that store again.

So, smart CEOs and businesses should overcome this bias and start to focus more systematically how to improve employee experience – their happiness at work – and this will naturally lead to improved sales. Luckily this is in many ways easier than they think because they have already learned a lot about how to improve customer happiness.

We Know How To Do This

Broadly speaking there are three main steps that companies use to improve customer experience:

• Asking for customers’ feedback
• Understanding their experience
• Taking action to improve their experience

Many companies create key metrics, such as customer satisfaction, that they can track over time and make comparisons between different offerings, locations etc. They also look at the relationship between these metrics and their financial metrics, with customer satisfaction being known to predict future sales and customer loyalty.

There is absolutely no reason why companies can’t follow these same steps to improve their employees’ experience. They can create key metrics like employee happiness, which reflect the actual changing experience of employees and teams. These indicators will not only give visibility to what is happening now in the organisation but will also predict future behaviours such as retention rates and productivity. In this way, companies can learn how to become better places to work, just as they learned how to create better customer experiences.

Same Intention, Different Approach

In fact, there is also a piece of magic that we have witnessed with our clients. Individuals and teams start generating positive ideas based on their own data and feedback. If stimulated in the right way this builds a very powerful and inspiring atmosphere that naturally creates positive change.

By focusing on employee experience, forward thinking companies can start to reap a huge happiness dividend that will benefit not only the employees and customers but also the business itself as it becomes more profitable. Now that would be “focusing success.”

I welcome your thoughts and comments.

Notes:

[i] If you substitute the word “satisfaction” for “experience” the same bias is evident: 83 million to 1.3 million hits.

[ii] https://www.roberthalf.co.uk/news-insights/reports-guides/cfo-insights/robert-half-ftse-100-ceo-tracker

[iii] http://psychcentral.com/news/2011/06/02/employee-satisfaction-key-for-customer-satisfaction/26623.html

Have you ever felt like a donkey chasing a carrot that is always tantalizingly just beyond reach? Maybe it’s not a carrot you’re chasing, but if you’ve ever found yourself thinking, “I’ll be happy when…” then you’ll understand.

Whether it’s striving for a promotion at work, dreaming of retirement or just trying to survive until the weekend, that feeling of satisfaction is often just out of reach. “Be happy when…” thinking comes from the belief that only when we achieve our goals will we be rewarded with happiness.  The same applies in a wider business context where KPIs like exceeding financial targets or shipping a certain number of widgets are pushed ahead of having a happy workforce.

While achievement can lead to satisfaction, it is often short-lived. No sooner are our goals achieved, both as individuals and as part of a business, then the goalposts shift.  But what if we thought about things differently and considered putting happiness first. Let’s look at what happens if we consider, “be happy THEN…”

Being Happy When … to THEN!

Jim Harter, who is head of wellbeing research at Gallup, looked at data from over two thousand business units in ten large organizations, examining employees’ perceptions of their working environment and their financial performance over a period of months and years. He found that whilst successful financial performance predicted good feelings about the work environment later in time, happiness at work was more than twice as likely to result in good performance.

Indeed some of the world’s most powerful and successful businesses like Apple, Google, and Zappo’s are famous for creating cultures of happy workers. They understand that happiness is the central component of a thriving organization, driving creativity, productivity and customer satisfaction. Happiness has many business benefits, so rather than have an attitude of “be happy when,” these great companies have embraced the idea of “be happy, then…”

Happiness at Open English

When companies focus on happiness first, success is often the result. It can be as simple as phrasing something differently, as Alain Lagger did at Open English. Open English sells language-learning materials in South America, and Alain worked as their Director of Happiness. He explained to their telesales team that they weren’t just making money; they were helping customers build better lives, especially in the age of the Internet and globalization where English is so prominent. Inspired by this benevolent purpose, the telesales team were much happier in their jobs, and as a result, much better at their jobs. Sales increased by 30% and staff turnover reduced by 12%.

Happiness at Pixar

At Pixar, the hugely successful animation studio, Steve Jobs wanted to encourage friendly relationships between staff. They believed that serendipity sparks magic, chance meetings and random conversations can lead to great ideas, solutions and a new point of view. To encourage people to get to know others they wouldn’t usually talk to, they designed their office building with a large central atrium where people can mingle. The result? Every single one of its fourteen feature films has been a box office number one, raking in an estimated $8.6 billion, and the studio has won twelve Oscars.

Happiness at Buurtzorg

Perhaps the best example is from the Netherlands where a focus on happiness has revolutionized the delivery of community healthcare. Buurtzorg is a non-profit organisation founded in 2007 by former nurse, Jos de Blok. Jos was disenchanted with the nursing industry, which he felt had become like a manufacturing assembly line, with nurses assigned specific jobs and given strict quotas of how many minutes they could spend with each. He believed that a friendlier, happier, more personal system would be beneficial for everybody, both patients and carers. Starting with a small team of self-organising nurses, Buurtzorg has now grown to over 9,000 employees and is the largest healthcare provider in the county, three times the size of the second largest.

Going from a standing start to a turnover of $275 million within eight years, Buurtzorg exemplifies the business benefits of happiness. Happiness is a sound investment. Just ask Alex Edmans, a Professor at the London Business School, who compared the stock prices for companies listed in “100 Best Companies to Work For in America” from 1984 to 2011 with those of their peers. His benchmark portfolio provided a 1.7 times return on investment over that period, not bad. But a portfolio updated each year with the hundred best companies? That achieved a 2.7 times return on investment, a Warren Buffet style difference.

First, Build a Happy Culture

So my advice for investing, whether in the stock market or your own organization, is to focus on happiness first. Employees that love their jobs do them well. The best employers do not dangle an unobtainable carrot, focusing on shipping widgets to the detriment of staff happiness. The best employers build a great culture, where staff is happy, and then they do their best work. Instead of dangling the carrot, the workers get to eat it, and the nutrients give them the energy to move forward. Rather than an attitude of “you can be happy when…”, great companies empower their staff to “be happy, then…”

Is building a culture of happiness within your reach? Please share your thoughts on social media.

Just as every person has a personality, every single organization on the planet already has a culture. But what people really mean when they say they want to embed culture at work is that they want to create a positive culture.  One that, combined with the people and the products or services that are sold, makes for an entity that is bigger, stronger and more impactful than the sum of its parts. In my view, the route to achieving this elusive mix and cultivating it into whatever shape it may turn out to be, is best served by an ethos that supports and nurtures a concept that is an almost universal goal – happiness.

While happiness is something that everyone has experienced, I sometimes find it surprising how watered down and insincere it can become once applied in the workplace.  I’ve seen many corporations take a dehumanized approach, ignoring relationships to instead install quirky decorations or host lavish social events. But these changes are superficial and for the most part, ineffective. A distrustful and dissatisfied employee cannot be bought with a beanbag and a gym membership. We need to take a wider view of what the fundamental drivers are for a happy organization and truly understand what makes for a good job. With this in place, positive cultures thrive.

Even given positive psychology’s relative infancy, there is a growing body of scientific research around communication, motivation and wellbeing which give us strong indicators on the points to focus on for a happy culture. Here are the big five: Connect, Be fair, Empower, Challenge, and Inspire.

Connect…

People love to work together. The key word is ‘together’. Togetherness requires a climate of trust, and the willingness to listen. But connection requires more than just putting people in the same room. Ao.com, an online appliance retailer, goes beyond the norm in encouraging its employees to connect. As well as employing a dedicated team to provide a variety of free events, it also pays half the cost of any social endeavor involving five or more employees. Research shows that social relationships are strongly linked to wellbeing, to such an extent that many academic consider them a basic psychological need. Ao.com meets this need; six out of seven of their employees report that people go out of their way to help each other, and the majority says that they love their jobs.

Be fair…

Fairness can be a common blind spot in the dog-eat-dog world of business. But when people feel their workplace is unfair, they become worried about being exploited or become disinterested. After all, why help a company that doesn’t help me?

Jim Goodnight, CEO of SAS, understands the need to treat employees fairly and allay their worries. In the wake of the economic crisis of 2008 when many feared for their jobs, he made a rather bold promise that none of SAS’s 13,000 employees would be made redundant. This commitment to look after employees in the bad times as well as the good, took the issue of job security off the table and allowed people to simply get on with their jobs, revitalized the workforce. Goodnight describes the effect; “suddenly we cut out huge amounts of chatter, concern, and worry.” Did SAS end up making anyone redundant through the downturn?  No it didn’t.  What it did manage, however, was to report record profits in 2009.

Empower…

While there is joy in a job well done, there are few things more frustrating than feeling we could do a good job if only we were allowed to get on with it. People need to feel in control. In fact, a sense of helplessness is one of the main factors in depression. In contrast, people who have a sense of ownership with their work are far more motivated, creative, productive and happy than those forced to work by rewards and punishments.

Buurtzorg, a non-profit designed around the idea of autonomy, was founded just eight years ago but has since grown to become the primary deliverer of home care in the Netherlands. Small teams of nurses are encouraged to be autonomous, deciding on their own training needs, staff recruitment and allocating their budget. Instead of middle management, Buurtzorg has coaches to empower and assist the teams. Coaches have no responsibility and no power over teams. They do not receive a bonus if a team does well and do not get punished if things aren’t working well. Buurtzorg could be used by academics studying Self Determination Theory to prove that autonomous and intrinsically motivated individuals have greater self-esteem, better interpersonal relationships and higher wellbeing. The company has grown from a standing start in 2007 to over 6,500 nurses in 2013 all with just a small back office staff of 35 people.

Challenge…

What great accomplishments would be achieved without a sense of challenge? Many psychologists argue that it is impossible to thrive at work without the opportunity to learn new skills. We all have a tendency to acclimatize to new situations, no longer feeling excited or satisfied about things that used to make us happy. Zappos.com challenges its staff to develop by rewarding them with pay increases after successful training. But this training is not compulsory. Workers can become certified in skill-sets of their choice, so they are challenged to develop in ways that appeal to them.

By allowing employees to shape their job roles, Zappos.com provides staff with job variety and prevents the ‘hedonic adaption’ of acclimatization. When people succeed at challenges they feel an increased sense of competence and believe they are progressing towards their goals, both of which are strongly related to wellbeing. Zappos.com’s Goal Development Department also holds ‘recognition lunches’ to celebrate the success of individuals, making the most of the accomplishment as an opportunity for people to feel respected, rewarded and part of the team.

Inspire…

We all want to do work that makes a difference. Believing our actions make a positive contribution to the world engenders a sense of purpose, vitalizing us with increased engagement, motivation and creativity. One method of inspiring people is to stick to moral values, even in the face of seemingly reducing profits. Larry Merlo, CEO of CVS Caremark, recently made the company’s values clear by deciding to stop selling tobacco in their stores. By asserting that the company prioritized public health over short-term profits, CVS Caremark inspirationally declared their purpose to be beneficial to society.

Researchers have found the fulfillment of ‘purpose’ goals, as opposed to ‘profit’ goals, result in higher levels of satisfaction and wellbeing, and lower levels of anxiety and depression. People both want to work for, and enjoy working for, companies that make a difference. Companies that benefit society and perform worthwhile work have happier cultures and better staff-retention.

So there you have it. Connect, be fair, empower, challenge and inspire.  Certainly a wider remit than offering a mandatory quiz night and redecorating the staff room, but one that gets to the heart of what it takes to build a positive culture that is as unique and special as your business.

What do you think about these insights? Have you used any of these approaches to create a culture of happiness? Of the “big five,” which one would you introduce first: Connect, Be fair, Empower, Challenge, or Inspire? Please share your thoughts or experience by commenting on social media.

Photo Credit: Adapted from FlickR photo by Hopeful