Friday, November 30, 2012

Converging The 3 Biggest Management Issues of 2013

The 2013 economic indicators don’t look great!  We’re heading over a “fiscal cliff” in the US while we wait for “European contagion” as the economic engines in BRIC slow down.  

What’s a business to do?  Is this a perfect storm, or a perfect opportunity?  Will businesses sit on the sidelines and hoard cash or will they get back in the game and take risks?  We’ll know the answer in a year.

In the interim whether organizations decide to sit this one out or move forward they cannot protect themselves from three major issues:

Employee Engagement
You pick the number, but employee engagement is at all time lows and there is no reason to reverse the trend. 

Customer Loyalty
This is on the same path as employee engagement. Technology has put customers in charge of brands. 

Ideas are the lifeblood of an organization’s health and relevance, but “survival management” has stifled the free flow of new ideas.

These three issues are not separate; they cannot be addressed individually; they must be addressed as one.

In my consulting over recent years I have learned that: 
... employees don’t work for their organizations anymore; they work for their customers.  
It is folly to admonish employees with pleas of profitability, bonuses, and shareholder value.  It is equal folly to believe that cosmetic changes and better communication will overcome the engagement malaise.  We have demonstrated to employees that the business doesn’t want to make a commitment to them.  Employees are now reciprocating. 

When I talk with employees they show their passion and energy when they talk about “their” customers.  When left alone (I’m avoiding the overused, yet appropriate word “empowerment”) employees will work diligently to provide the best experience for their customers.  Similarly, when I talk with customers they often harbor dislike for the amorphous organizational entity but lasting admiration for the employee who made things right.

Innovation is the nexus of employee engagement and customer loyalty; however, 
we don’t build organizations for innovation, we build them for efficiency and consistency of delivery.  
In effect organizations work hard to prevent the natural alliance between employees and customers.  

Now I’m not naïve, I recognize that some times employees are bad (and should be dismissed) and sometimes we don’t want employees to think (for example when they must comply with laws and regulations).  Employees understand this.  What they don’t understand is the organization’s orthodoxies and internal controls that prevent the application of common sense in a customer situation.  

Equally, when I talk with CEO’s they want the same thing.  They want employees to act reasonably in serving their customers.  They want employees to offer up ideas that will change orthodoxies and bend internal controls in the service of customers.

So why don’t CEO’s and employees get their way?  Well because there are well meaning layers of management, systems, and procedures that get in the way.  No one is malicious, but the result is disastrous.  The opportunity for a virtuous cycle of: employee->innovation->customer turns into a death spiral of: employee disengagement -> customer defection.

It doesn’t need to be like this.  Human Resources, Customer Experience, and Innovation functions need to look at this problem from the customer point of view.  They need to ask the question:

... how do we unleash ideas from all employees so we can provide our best customer experience?

In 2013 organizations need to build hope into their workforce and “wow” into their customers.  


  1. Just had a personal experience of "employee disengagement> customer defection". Because the employee felt they could not help in the way I needed, it caused me to get a $40 parking ticket (for being 5 min late) and doubled my grocery bill. Why would I shop somewhere that doubles my bill because employees don't feel empowered to use common sense?
    Done. Just like you said. Now imagine that happening in every city, all over the world. Caccching! The sound of dollars going elsewhere.

  2. Tina, i empathize. I spent four hours today trying to make a donation to a cancer clinic! I was eaten up in the ever decreasing concentric circles of websites and IVR's. I couldn't find anyone to take my money.

    I finally contacted the administrator and asked her to act as someone trying to make a random (not annual, fundraising campaign) donation.

    I can't understand why the first person i contacted didn't hot-transfer me to someone with credit card machine.

    The employee-innovation-customer line of sight is a key that we're overlooking!