Modernize Leadership: Shifting 8 Outdated Management Practices

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Over the previous decade, I’ve had the opportunity to work with and study thousands of companies. One of the things that I’ve noticed is that the world has changed a lot, but organizational management has stayed substantially the same.

Technology has enabled entirely new practices and we’ve developed a much deeper understanding of what drives human behaviors and business success. But these new realities have not been translated into how leaders run their companies. Instead, management techniques continue to reflect outdated assumptions such as:

  • Mainstream economics works on the assumption of Homo Economicus, a model of people as rational self-interest maximizers. So “agency theory” informs management that employees can’t be trusted to act on behalf of the firm and, therefore, controls must be put in place to align their efforts.
  • Strategic planning cycles (annually, quarterly) have been established based on a constraint of limited data availability. When these processes and cycles were initially created, it was impractical to more frequently pull together meaningful insights about the business.
  • Management focus has been driven by economists like Milton Friedman who argued that corporate officials have one core responsibility: making as much money as possible for their shareholders. But the value that a company creates comes from a combination of resources contributed by different constituencies (not just investors) who’s returns should also be maximized, especially employees who contribute their knowledge and skills.

While these underlying assumptions aren’t necessarily discussed explicitly, they frame the basic structure of today’s approach to management. Well, it’s time to Modernize Leadership. We need to redefine how we run organizations based on the realities of today, which will require more inspiring leaders in the future.

To help make the shift, I plan to write individual posts that describe eight key shifts required to modernize leadership. In those posts I’ll describe the move from:

  1. Command and Control to Engage and Empower
  2. Strategize and Plan to Learn and Adjust
  3. Amass and Review to Detect and Disseminate
  4. Measure and Track to Observe and Improve
  5. Goals and Objectives to Purpose and Values
  6. Problems and Solutions to Strengths and Appreciation
  7. Process and Projects to Culture and Behaviors
  8. Price and Features to Experience and Emotions

ModernizedLeadershipOutdatedAssumptions

The bottom line: Let’s Modernize Leadership together!

Report: Employee Engagement Benchmark Study, 2016

1602_EEBenchmarkStudy16_COVERWe just published a Temkin Group report, Employee Engagement Benchmark Study, 2016. This is the fifth year that we’ve published the benchmark of U.S. employees. The research is based on an online survey on Q3 2015. (Take a look at our Employee Engagement Resource Page).

Here’s the executive summary: We used the Temkin Employee Engagement Index to analyze the engagement levels of more than 5,000 U.S. employees. We found that employee engagement has stayed relatively flat since last year, but engagement levels still vary by organization, industry, and individual. Companies with stronger financial performances and better customer experience have employees who are considerably more engaged than their peers. Our research also shows that out of all the industries, the construction sector has the highest percentage of engaged employees, while the retail sector increased the most since last year. We additionally found that companies with 501 to 1,000 employees have the highest percentage of engaged employees and companies with 10,000 or more employees have the lowest level of engagement. On an individual level, our research shows that employees who are highly educated, high-income earners, executives, male, and have very good bosses tend to be the most highly engaged. Given the significant value of engaged employees, we recommend that companies improve engagement levels by mastering our Five I’s of Employee Engagement: Inform, Inspire, Instruct, Involve, and Incent.

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Here’s what we found when we examined year-over-year results for the Temkin Employee Engagement Index:

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Here are some other findings from the research: Read more of this post

Report: Benchmarking HR’s Support of CX and Employee Engagement

1602_HRinCXBenchmark_FCOVERWe published a Temkin Group report, Benchmarking HR’s Support of CX and Employee Engagement.  We surveyed 300 HR professionals from large organizations in North America and compared the results to a similar study we did in 2012. Here’s the executive summary:

Employee engagement is a critical component of customer experience (CX). To determine how effectively human resource (HR) departments support these engagement efforts, we surveyed 300 HR professionals from large companies and compared the results to a similar study we conducted in 2012. Seventy-three percent of HR professionals believe that it’s very important for their organization to become more customer-centric, but only 31% believe that HR professionals are significantly helping these efforts. The good news? That’s more than twice the level of HR support we found in 2012. Compared with 2012, companies are both measuring and acting on employee feedback more frequently, and HR professionals have more bandwidth to work on employee engagement. When we compared the companies that deliver outstanding customer experience with the companies that don’t, we found that the CX leaders have better financial performance, enjoy higher levels of engaged employees, are more customer- and mission-centric, have HR groups that are more actively involved in CX and employee engagement activities, and more frequently measure employee feedback. To improve employee engagement, companies must master the Five I’s of Employee Engagement: Inform, Inspire, Instruct, Involve and Incent.

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Here’s one of the 25 figures in the report:

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Here are some other findings in the research: Read more of this post

Report: Lessons in CX Excellence, 2016

1601_LessonsInCXExcellence_COVERWe just published a Temkin Group report, Lessons in CX Excellence, 2016. The report provides insights from eight finalists in the Temkin Group’s 2015 CX Excellence Awards. The report, which is 100 pages long, includes an appendix with the finalists’ nomination forms. This report has rich insights about both B2B and B2C customer experience.

Here’s the executive summary:

This year, we chose eight organizations as finalists for Temkin Group’s 2015 Customer Experience Excellence Award. The finalists for 2015 are EMC Global Services, Hagerty, InMoment, Safelite AutoGlass, SunPower, The Results Companies, Verint, and Wheaton | Bekins. This report provides specific examples describing how these companies’ CX efforts have created value for both their customers and for their businesses. We also highlight best practices across the four customer experience competencies—purposeful leadership, compelling brand values, employee engagement, and customer connectedness. We have included all of the finalists’ detailed nomination forms at the end of this report to help you compile examples and ideas to apply to your own CX efforts.

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Here are some highlights from the finalists: Read more of this post

A Look Back At “The Year Of The Employee”

As we start moving ahead in 2016, The Year of Emotion, I wanted to look back at last year’s theme.

logoIn our listing of customer experience trends for 2015, I labeled 2015 as “The Year of the Employee.” To help accelerate the focus, we created our Engage Employees campaign. I hope that you were able to find ways to focus on your employees last year, and that those efforts continue into the future.

Here is some of the relevant content that we created in 2015:

The bottom line: Employees are critical for customer experience success.

Report: B2B Customer Experience Best Practices

1510_B2B CX Best Practices_COVERWe published a Temkin Group report, Business-to-Business (B2B) Customer Experience Best Practices. This report provides data on the state of customer experience (CX) in B2B as well as 20 CX best practices across five critical B2B processes. Here’s the executive summary:

Temkin Group research shows that although business-to-business (B2B) organizations are raising their customer experience (CX) ambitions, they still have a way to go before achieving their goals. Despite the fact that most large B2Bs have a low level of CX maturity, our research shows that 57% of them aspire to deliver industry-leading customer experience within three years. However, to improve their CX, B2Bs must master Temkin Group’s four customer experience core competencies: Purposeful Leadership, Compelling Brand Values, Employee Engagement, and Customer Connectedness. Our research uncovered 20 practices that B2Bs can emulate when applying those competencies across these five key business processes: sales and account management, implementation/project execution, support and issue resolution, partner alignment, and product management and innovation. To assess your organization’s CX maturity, use Temkin Group’s Customer Experience Competency Assessment and compare the results to data from other large B2B firms to chart your path to improvement.

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The report examines the state of B2B CX, including the results from large companies that completed Temkin Group’s CX Competency & Maturity Assessment:

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To help B2B organizations raise their CX maturity, we identify 20 best practices for mastering Temkin Group’s four customer experience core competencies: Purposeful Leadership, Compelling Brand Values, Employee Engagement, and Customer Connectedness. These practices are aligned with five key B2B activities: sales and account management, implementation/project execution, support and issue resolution, partner alignment, and product management and innovation:

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100 Customer Experience Tips in 105 Characters (Or Less)

I’ve decided to take on a personal challenge: Tweeting (@btemkin) a new customer experience tip for 100 straight days.

100CXtips_v2After accounting for the overhead in each tweet (like links back to this post), I’m only left with about 105 characters. Hopefully I can keep up the pace and pack insight into that limited space. I’ll be using the hashtag, #CXtip, so you can follow me on twitter (or just keep coming back to this post).

The tips will cover the four customer experience core competencies: Purposeful Leadership (PL), Compelling Brand Values (CBV), Employee Engagement (EE) and Customer Connectedness (CC).

Here are the 100 #CX Tips:

  • #CXtip 1Examine #insights for #customers’ journeys, not for individual, siloed interactions. (CC)
  • #CXtip 2: Engaged employees are extremely valuable assets. They’re worth even more of your investment. (EE)
  • #CXtip 3: You can’t fake it. Assume that customers & employees will always figure out what’s real & act accordingly. (PL)
  • #CXtip 4: Great #brands are built on making, embracing & keeping promises, so be clear about your #customer promises. (CBV)
  • #CXtip 5: #CustExp encompasses success, effort, & emotion. They all impact loyalty, but #emotion rules. (CC)
  • #CXtip 6: Don’t waste customers’ time asking them questions unless you are prepared to act on what they say. (CC)
  • #CXtip 7: #Employees are more #engaged when you ask for their feedback and act upon what they say. (EE)
  • #CXtip 8: Build commitment by appealing to #employees’ hearts, shared values & intrinsic motivations. (PL)
  • #CXtip 9: Not all customers are the same. Stop treating them as if they are. Think of using #personas. (CC)
  • #CXtip 10: What people experience is not what they remember; so take advantage of how people remember things (CC)

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eBook: 15 Tips for Engaging Employees

1510_15TipsToEngageEmployees_CoverIn honor of CX Day, Temkin Group is publishing a free eBook: 15 Tips for Engaging Employees. Here’s the executive summary: 

It is impossible for an organization to deliver a great customer experience without an engaged workforce. To help you engage your employees in your customer experience journey, we have compiled a list of 15 examples of how leading-edge companies are practicing what Temkin Group calls the “Five I’s of Employee Engagement”—Inform, Inspire, Instruct, Involve, and Incent—which you can modify and emulate at your own firm. 

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Report: Creating and Sustaining a Customer-Centric Culture

1507_CreatingCXCulture_COVERWe just published a Temkin Group report, Creating and Sustaining a Customer-Centric Culture. Here’s the executive summary:

Temkin Group defines culture as how employees think, believe, and act, and if an organization wants to differentiate its customer experience, it must address each one of these areas. However culture change is not easy. Culture change efforts are often impeded by common pitfalls, such as ignoring the existing culture or becoming impatient at the pace of change. To make this effort smoother, Temkin Group recommends adopting an approach we call Employee-Engaging Transformation (EET), which consists of five practices: Vision Translation, Persistent Leadership, Middle Management Activation, Grassroots Mobilization, and Captivating Communications. In this report, we’ve compiled case studies of how five organizations—Hagerty, Hilton Garden Inn, Oxford Properties, Safelite AutoGlass, and Transamerica—apply these EET practices to create and sustain their customer-centric cultures. To help your company discuss its goals around culture, use Temkin Group’s Cultural Planning Map.

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This graphics provides an overview of the details on how five companies are driving culture change.

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The bottom line: Promoters are much more valuable than detractors.

Winners of the Engage Employees Challenge

logoThank you to everyone who has pledged to Engage Employees and who has participated in the Engage Employees Challenge where we asked people to provide examples of how they are engaging employees within their organizations.

Temkin Group has selected four winners who are each being sent a $250 gift certificate to Amazon.com. Here are their great ideas:

Nancy Gallant: Employee Engagement Model

As part of the Change Management Planning Team which supports a number of Customer Contact Centres across the country we have been demonstrating the value of engaging employees to increase the rate of adoption of change. To achieve this we have developed an Employee Engagement Model with engagement activities across the Planning, Implementation, and Benefits Realization phases of projects.

A key ingredient is the creation of Champions of Change amongst the employees. To do this we created the following employee groups:

  • Employee Action Teams: Frontline & Management teams that are impacted by the change. Responsible for providing insight and recommendations on training, communication and implementation of ‘initiative’ at stages of the change.
  • Employee Engagement Advisory Council (EEAC): A subset of the Employee Action Teams are selected to join members of the project team and business representatives at this council. The Advisory council acts similar to a steering committee and is responsible for reviewing and signing off on communication, training, and benefits realization recommendations to sponsors.

Following details employee involvement across the phases of the project lifecycle:

  • Planning:
    • Validate the current state assessment with EEAC & Action Teams
    • Complete a PCM assessment with EEAC. The goal to this activity is to identify desired behaviours, mindset and attitudes for employees & identify strategies to mitigate impact to employees.
    • Conduct Action Teams (management and frontline): gather feedback and recommendations on implementation, communication and training.
    • Learning & Communication assessment: Review & confirm learning & communication assessments with EEAC. Ensure close loop with EEAC as changes are made
  • Implementation:
    • Pilot with cross section of frontline and leaders from the EEAC and Action Teams :
      • Gather feedback from pilot group identifying areas of opportunities and recommendations for addressing any opportunities.
      • Incorporate learnings & feedback into the training i.e. support tools, FAQs, etc.
      • Continuous close loop with EEAC and Action teams as changes are made
    • Monitor results post launch:
      • Gather and assess feedback from Action Teams & EEAC
      • Continuous close loop with EEAC & Action teams on any identified gaps
  • Benefits Realization:
    • Based on assessment of progress towards key project success measures EEAC confirms if desired behaviours, mindset and attitudes have been achieved
    • Close the loop with Action Teams & EEAC

Sibylle Huffman: Pat on the Back

Employees love to be recognized, not just for big successes and long nights spend on projects, but also their every day efforts. In my group we have implemented giving ‘Pats on the Back’ many years ago to improve morale and teamwork. The concept was simple. All my staff were asked to do is to give a ‘Pat on the Back’ to a coworker, staff member, or peer for any act of kindness and support given to one another, regardless of how big or small the gesture may be. In return, anyone who earned 5 ‘Pats on the Back’ received a $25 gift card to a place of their choice. Building an environment where support and positive attitudes are encouraged creates an infectious atmosphere and culture that makes them feel appreciated and constantly motivates employees to do more. When gift cards are handed out to the staff, it’s a big deal. The team gathers together and every recipient receives a round of applause while the gift card is handed to them, creating another moment of pride.The team has become an incredibly cohesive, supportive, and high functioning group. A small gesture, and oftentimes just a simple ‘thank you’ can go a very long way in making employees feel valued and subsequently engaged. I have found many times that the key to success is consistency. Our groups philosophy of giving ‘Pats on the Back’ is spreading throughout the organization. Choose your attitude in the office and don’t forget to say thank you for the big and little things that way to frequently go unnoticed because we are all too busy. I pledge to Engage Employees!!

Roger Pugsley: oPositive Intranet Site

We have implemented an Intranet site we call “oPositive”. Picture a Pinterest lookalike site allowing employees to post stories with Facebook functionality (other employees can like, comment or share stories).

Employees are sharing an average of 50 stories per month on anything to do with CX: best practices, successes, customer feedback or recognizing their peers who have exceeded customer expectations.

It’s fun, uplifting, and very engaging!

We also mine the stories to identify winners of our annual “Customer Service Excellence” and “Story Teller” Awards. We have great people with great ideas. We therefore leverage oPositive content to feed “Site Initiatives We Love” to share great ideas and best practices with other sites across our portfolio. Collaboration is alive and well at Oxford!

Lisa Hrnken Ramirez: New Employee Scavenger Hunt

At NetSpend, we like to engage employees from their first day on the job. We created a new employee “scavenger hunt” using the mobile app Scavify. The hunt guides new employees through a series of tasks that connect them to other employees, our mission and our customers. Activities include having lunch with someone in another department, taking pictures with a tenured employee, listening to customer service calls and using our product features to name a few. Now new employees have a fun way to learn about the company, their fellow employees and our customers. New employees also get to show their unique personalities as the upload pictures of themselves accomplishing the tasks.

The bottom line: An engaged employee is worth the investment.

Want to Improve Well-Being? Sleep for 7 to 8 Hours

One of the themes from the positive psychology movement is the importance of sleep. Research has shown that happiness is very reliant on people getting enough sleep. Check out Ariana Huffington’s excellent Ted Talk where she identifies sleep as a critical ingredient to success.

We decided to test that theory in our most recent study of 10,000 U.S. consumers. We examined the degree to which consumers agree with a series of statements about their well-being, and then compared responses from people based on the typical amount of sleep they get. As you can see below, people who get 7 to 8 hours of sleep per night are the most well off. 

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People who get 7 to 8 hours of sleep per night are the most likely to feel as if they are:

  • Happy
  • Loved and appreciated
  • Healthy
  • Financially secure
  • Physically fit

The bottom line: There’s almost nothing more precious than 7 to 8 hours of sleep.

Employees Need to Feel Like They’re Contributing

How people feel about what they are doing (intrinsic motivation) is a key to sustaining their focus, energy, and commitment. One of the ways for companies to tap into this intrinsic motivation is to find ways for employees to feel as if they are contributing to the organization’s success (which is consistent with lessons from positive psychology).

As you can see in the chart below, people who believe they are contributing are:

  • More than twice as likely to help someone at work
  • Almost four times as likely to do something unexpectedly good for the company
  • More than twice as likely to make a recommendation
  • More than twice as likely to recommend that a friend apply for a job
  • 36% less likely to look for a new job
  • 30% less likely to take more than one sick day

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The bottom line: When people feel like they contribute, they contribute even more.

Report: Employee Engagement Competency & Maturity, 2015

1507_StateOfEE2015_COVERWe just published a Temkin Group report, Employee Engagement Competency & Maturity, 2015. Here’s the executive summary of this annual review of employee engagement activities, competencies, and maturity levels for large companies:

Engaged employees are critical assets for any customer experience effort. Our research of more than 200 large companies shows that front-line employees are the most engaged, while back office employees are often neglected in employee engagement efforts. We also found that two-thirds of companies survey their employees at least once a year, but less than half of executives consider acting on the results as a high priority. We used Temkin Group’s Employee Engagement Competency & Maturity Assessment to gauge the maturity levels and efforts of these companies across our five competencies, called the Five I’s of Employee Engagement: Inform, Inspire, Instruct, Involve, and Incent. We found that less than one out of five companies have reached the top two levels of maturity, Enhancing and Maximizing. This percentage of very mature companies is about the same as in 2014, but the percentage of companies in the lowest two levels of maturity has dropped from 67% to 56% since last year. We also found that many companies face challenges when trying to make improvements. The lack of a clear employee engagement strategy remains the number one obstacle that’s been cited by respondents over the previous three years. We compared companies with above average employee engagement maturity with those with lower maturity and found that the leaders deliver better customer experience and also have better financial results than their counterparts.

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Here’s an excerpt from one of the 20 graphics:

1507_EECompetencyMaturityResults

Here are some additional highlights form the report:

  • The percentage of companies in the top two stages of employee engagement maturity has stayed the same since last year (19%), but the percentage of companies in the lower two sages has declined from 67% in 2014 to 56% on 2015.
  • Sixty-nine percent of large companies measure employee engagement at least annually, but only 45% of companies have executives that treat taking action on the results as a high priority.
  • The most common obstacle to success identified by respondents is the lack of a clear employee engagement strategy.
  • We compared companies with more mature employee engagement efforts with those that have less maturity. Seventy-two percent of the more mature companies have above average customer experience compared with 48% of the other companies.
  • Seventy-five percent of the more mature companies had better financial performance than their competitors’ compared with 50% of companies with lower employee engagement maturity.
  • Executives in companies with more mature employee engagement efforts are almost 3.5 times more likely to treat taking action on employee engagement studies as a high priority.
  • Companies with more mature employee engagement efforts are more than twice as likely to have their customer experience and HR organizations work together on their employee engagement efforts.
  • The report includes data for benchmarking your organization’s employee engagement competency and maturity levels.
  • Here’s a link to the 2014 study.

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The bottom line: Companies should invest more in employee engagement.

What Do People Want in a New Job? Flexibility

As part of our ongoing research around all aspects of employee engagement, we examined the things that people look for in a new job. No surprise, compensation is a key item. But it’s not at the top of the list.

As you can see in the chart below which is based on a study of 5,000 U.S, employees, people are most interested in finding a job that has flexible work hours. Compensation and location and are next on the list, with about the same appeal.

We also examined how the data differs across age groups of consumers. Compared with the overall U.S. average:

  • 18- to 24-year-olds want to enjoy life. They selected flexible work hours, fun work environment, and the opportunity to be creative more than any other group.
  • 25- to 34-year-olds want career growth. They selected the opportunity for professional advancement and working for a person they can learn from more than any other age group.
  • 35- to 44-year-olds want the money. They selected compensation more than any other group.
  • 55- to 64-year-olds want meaningfulness. They selected working for a person they like and an organization they admire more than any other group.
  • The 65+ group want convenience and training. They selected location, training, and vacation time more than any other group.

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The bottom line: People care about more than just compensation

Walmart’s Pay Increase Will Probably Lower Costs

Walmart recently announced that it plans to raise wages for more than 100,000 of its managers and employees in specialized departments. Why would the “everyday low prices” retailer add a ton of new costs to its ongoing operations?

I want to explore a hypothesis that this move will actually lower Walmart’s long-term costs. I know it sounds counter-intuitive; how do you lower costs by spending more? The answer comes from understanding the Employee Engagement Virtuous Cycle.

Temkin Group's Employee Engagement Virtuous Cycle

As you can see, a more engaged workforce can drive even better financial results. One of the reasons is that engaged employees are much more productive, they’re willing to work harder. While compensation is not the key motivator for engaging employees, it’s hard to engage employees who don’t believe that they are being fairly compensated.

As you can see below, 59% of employees who believe they are appropriately compensated are highly likely to do something good for the company even if it’s not expected of them, compared with 45% of employees who do not believe they are appropriately compensated.

TGVirtuousCycle

This move by Walmart will certainly get a lot more employees to believe that they are appropriately compensated. Think about how much value (and cost savings) those employees can create by doing good things for Walmart. I’d bet that it will more than cover the costs of the pay raises.

The bottom line: Sometimes you can save money by paying your employees more.

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