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Recognition Professionals International
Turn Your Employees into
Successful Brand Ambassadors:
Drive Greater Financial
Performance by Focusing on
Employee Engagement
Rick Blabolil
President, Marketing Innovators
President, Incentive Marketing Association
RPI 11th Annual Conference – April 28, 2008
How does your company build its brand?
… and create profitable, recurring sales?
Building
Relationships
with Your
Customers
RPI Annual Conference 4/28/2008
© Marketing Innovators International, Inc. 2007
What’s the best way to Build Relationships
and Brand Loyalty with your customers?
Building
Relationships
with Your
Employees!
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© Marketing Innovators International, Inc. 2007
Does this reflect any employees in
corporate America?
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What’s keeping CEOs up at night?
• Disengaged workers cost the
economy $300 billion or more a year.
(source: The Gallup Organization)
• The looming skilled labor shortage
– This is the No. 2 concern of top
executives.
A survey of 500 corporate executives reveals
that there is direct evidence to support the
fact that if an employee is excited about work
and knows how to do his/her job, external
and internal customers will benefit from more
effective service.
(source: The Ken Blanchard Companies)
RPI Annual Conference 4/28/2008
© Marketing Innovators International, Inc. 2007
71% of employees are
either indifferent to their
work or actively
disengaged!
3 Types of Employees:
Engaged (alive) – 26%
Asleep
Not-Engaged (awake) – 55%
Alive
Awake
Disengaged (asleep) – 19%
“Simply put, true engagement results when
employees are willing to lend not only their
minds and hands to the organization, but their
hearts as well” — The Human Connection™
Source: Gallup Organization 2006 Research
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© Marketing Innovators International, Inc. 2007
What’s keeping CEOs up at night?
• How to engage workers to deliver
customer satisfaction – when 82
percent of customers say they'll walk if
they lose trust in a company
(source: Harris Interactive)
• How to move to a customer-focused,
responsive culture – from the
traditional process-oriented approach
• Closing the gap between the
promise makers and promise keepers
(source: Don E. Schultz, Ph.D - Northwestern University, one of the nation’s
leading authorities on Branding, Marketing and Integrated Communications)
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© Marketing Innovators International, Inc. 2007
Tying back to the…
Model Performance Analysis
– Desired Workforce Performance = workforce is delivering a
customer experience that matches the brand promise
– Actual State of Workforce Performance = a gap or
disconnect in the customer experience the workforce delivers vs. what
the marketplace branding conveys
• HR and Marketing executives do not effectively communicate.
• Workforce is not given the tools or training to understand the brand
promise or be able to deliver on it.
• There are no defined expectations, motivations or measurements in
place to achieve desired behavior.
• There is an education gap – Northwestern University Forum for
PPM is developing curriculum to address this issue.
"Linking Performance Strategies to Financial Outcomes - The Interaction Between Marketing & Human Resources
and Employee Measurement & Incentives,” Forum for PPMM, Northwestern University
RPI Annual Conference 4/28/2008
© Marketing Innovators International, Inc. 2007
Internal Branding
Branding is not just delivered through your Marketing
department’s advertising and public relations efforts – it
is delivered through all aspects of your company – your
products, your services, your PEOPLE – and shaped by
customer experiences over time.
Research from Don E. Schultz1
demonstrates that employees
deliver the most important Brand
Experiences, and help nurture
desired Brand Behaviors.
1 See
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relevant studies at www.incentivecentral.org
and www.performanceforum.org
© Marketing Innovators International, Inc. 2007
Internal Branding
A company’s Brand Behaviors (your people)
are tangibly, demonstrably linked to its
Brand Equity (corporate personality) and
Brand Loyalty (stakeholders’ commitment to the
company = Lifetime Customer Value)
Brand
Equity
Brand
Behavio
r
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Brand
Loyalty
© Marketing Innovators International, Inc. 2007
Brand Behavior
Brand Behavior shows up in how employees:
•
•
•
•
•
•
Act
Approach their jobs
Understand the business and its mission
Interact with customers
Interact with each other
Represent the company and its interests
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© Marketing Innovators International, Inc. 2007
A rapidly growing body of evidence points to a
correlation between employee satisfaction
and company financial performance.
=
Our employees are #1, and our customers are why
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© Marketing Innovators International, Inc. 2007
This knowledge can influence how companies pursue:
Business planning
and development
Employee rewards
and recognition
ROI measurement
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Collectively, corporate America has overlooked and
mismanaged human capital.
This is an enormous opportunity. Emphasize
your people as the differentiation. It is the one
thing that your competitor cannot replicate.
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© Marketing Innovators International, Inc. 2007
Question:
How do you
manage…
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The Human Connection™
next-generation (n-gen)
Four Distinct Generations working together for the first time
Traditionalist
Birth Range
Total
% of Population
1922-1945
48.7 million
17%
Baby Boomer
1946-1964
78.3 million
28%
Gen X
1965-1980
63.3 million
23%
Gen Y
1981-2000
80.4 million
29%
n-gen
Source: The Human Element Images and Concepts are adaptations of The Dow
Chemical Company’s Human Element Commercial; Buahene, A.; Kovary, G. (2007).
Loyalty Unplugged, Philadelphia : Xlibris. ISBN 13-978-1-4257-4926-2
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© Marketing Innovators International, Inc. 2007
and associated clashpoints…
CLASHPOINTS:
•
•
•
•
•
•
•
•
•
•
•
Recruitment
Retention
Career Goals
Multi-Lingual
Dynamics
Communications
Training
Rewards
Feedback
Knowledge Share
Balance
Retirement
Source: The Human Element Images and Concepts are adaptations of The Dow
Chemical Company’s Human Element Commercial; Lancaster, L.; Stillman, D. (2002).
When Generations Collide, New York: HarperCollins. ISBN 0-06-662107-0
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when they collide?
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The Human Connection™
Get’em
Keep’em
Grow’em
Managing the generational mix,
diversity, development and
performance of today’s
“Brand Ambassadors”
Source: The Human Element Images and Concepts are adaptations of The Dow
Chemical Company’s Human Element Commercial; Buahene, A.; Kovary, G. (2007).
Loyalty Unplugged, Philadelphia : Xlibris. ISBN 13-978-1-4257-4926-2
RPI Annual Conference 4/28/2008
© Marketing Innovators International, Inc. 2007
Answer:
Show them that you
CARE…
through change
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Look inside the box…
…a way of seeing that gives us
the way of touching:
Issues, Ambitions, Lives
07
Corporate
Hu
7E+09
Harmony
…and target corporate harmony.
Source: The Human Element Images and Concepts are adaptations of The Dow Chemical Company’s Human Element
Commercial; Maslow, A..; proposed in his 1943 paper A “Theory of Human Motivation”
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Internal Marketing
“Internal Marketing” programs should not be simply
motivational programs. Behavioral changes are needed,
and this requires policy changes, new compensation
plans, new employee evaluation systems, and
measurement of key metrics that management has
deemed significant.
Institute for the Study of Business Markets/
Business Marketing Association Brand Consortium
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© Marketing Innovators International, Inc. 2007
Internal Marketing
The Integrated Internal Marketing Calculus is broken
into five steps:
1. Customer identification of internal marketing issues
2. Relating employee behavior to customer issues
3. Valuing financial changes in employee behavior
4. Developing appropriate internal marketing programs
5. Implementing program evaluation results and
recycling
Don Schultz
Professor of Integrated Marketing Communications
Medill School of Journalism, Northwestern University
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© Marketing Innovators International, Inc. 2007
Internal Marketing
Seven Factors for Successful Internal Marketing:
–
–
–
–
–
–
–
Visible commitment at all levels
Single-minded communication
Specific, measurable, attainable goals
Frequent feedback
Team-based recognition of achievement
Open circuits
Repetition and patience
Robert Lauterborn
Professor of Advertising
University of North Carolina
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Brand Behavior
Desired brand behavior can be driven through
rewards and recognition programming to deliver
Brand Equity (“Personality”) and Brand Loyalty
•
•
•
•
•
Compliance programs
Safety programs
Training and development
Corporate meetings
Recognition programs
Brand
Behavior
Brand
Loyalty
Incentive
Programming
Brand
Equity
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Buyer and Seller “Perspectives”
Programs
Buyer
Domain
Applications
Gap / Disconnect
Gap / Disconnect
Gap / Disconnect
Solutions
Seller
Domain
Capabilities
Merchandise
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Gift Certificates
Travel
Technology
Communications
© Marketing Innovators International, Inc. 2007
Companies that “Get it”
What Characteristics
Define Companies That
“Get It?”
Companies that successfully cultivate desired
Brand Behaviors tend to have a variety of
characteristics in common.
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Companies that “Get it”
• They have principled
leadership
• They link the internal to
the external
• Management listens and
responds
• They communicate…often
and effectively
• They have strong reward
and recognition systems
• Goals are defined and
understood
• They emphasize training
• They measure everything
• They empower employees
• They manage against the
long-term
“If your company is going to put customers first,
then you must put your employees more first.”
- Tom Peters
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© Marketing Innovators International, Inc. 2007
Look at the successes
Employee-Friendly Southwest Outperforms Competitors!
An eight-year MIT/Sloan Foundation study of Southwest Airlines,
renowned for its progressive and innovative people practices, found
that the airline had the highest profitability of any U.S. carrier, had a
total market value that exceeded that of all other U.S. airlines
combined, and had the highest employee productivity of any major U.S
carrier, despite the fact that it was the most highly unionized airline in
the industry, and its employees were paid only at or below the industry
wage average.
Now that’s employee satisfaction!
Source: Gittell, J. H., 2003. The Southwest Airlines Way: Using
the Power of Relationships to Achieve High Performance. New
York: McGraw-Hill.
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Look at the successes
Leader in Customer Care three years in a row!
As one of nation’s fastest growing providers of communications
services, T-Mobile has more than 20 million customers and more than
13,000 customer service employees. After ranking low in customer
satisfaction surveys, the company analyzed the gap between their
brand promise and employee engagement, and instituted a strategy to
close the gap. The results have been dramatic. T-Mobile’s rewards and
recognition program resulted in the company ranking highest in JD
Power and Associates “Wireless Customer Care Performance Study”
three years in a row.
Employee attrition has also been reduced by more than 15%, and
employee satisfaction has increased by 10%!
Source: Marketing Innovators / T-Mobile case study
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© Marketing Innovators International, Inc. 2007
So the secret formula is:
Employee Satisfaction = Customer Satisfaction
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Not quite…
We wish
it were that
simple …
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It’s a little more involved
What's the difference between employee satisfaction,
employee empowerment, employee motivation, and
employee engagement?
Satisfaction, motivation, empowerment, and engagement
are all inter-related in an upward progression. Each item is
a different piece to the puzzle, but they build on one
another to increase performance in the workplace.
Think about It…
Engagement
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It looks something like this
Satisfaction
(emotion)
07
Hu
Motivation
(discretion)
7E+09
=
Engagement
Customer Satisfaction
Empowerment
(cognition)
Satisfaction + Empowerment
+ Motivation = Engagement
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=
Customer Satisfaction
© Marketing Innovators International, Inc. 2007
“You must be the
change you wish
to see in the
world.” —Gandhi
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© Marketing Innovators International, Inc. 2007
a catalyst for change
Companies that make better connections are able to align their external
marketing with internal human elements; to better support their brand
strategy, strengthen their brand image and consistently deliver on their
brand promise.
External
Marketing
Internal
Marketing
Corporate DNA
Shared
Understanding/Belief in
Company’s Values, Ethos &
Products/Services
Culturally
Supporting
Brand Building
Brand “Promise Keepers”
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Refine your Human Capital Strategy
Translate The Human Connection™ into Financial Performance
HUMAN CAPITAL
STRATEGY
EMPLOYEE
ENGAGEMENT
SUPERIOR
FINANCIAL
PERFORMANCE
ONE-TO-ONE
LEADERSHIP
PRACTICES
KNOWLEDGE
ACCESSIBILITY
WORKPLACE
OPTIMIZATION
BRAND DELIVERY
EMPLOYEE
SATISFACTION,
EMPOWERMENT,
MOTIVATION
07
Hu
COST
INCREASED
PRODUCTIVITY
7E+09
LEARNING
CAPACITY
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OPTIMAL
TURNOVER
Source: Adapted from Watson Wyatt Worldwide, Lessons From Watson Wyatt's
2005 HCI: “HR Programs, Turnover Risk and Employee Productivity”
© Marketing Innovators International, Inc. 2007
Build a blueprint for success
Make better, more informed decisions across the entire human capital
spectrum to ensure success by focusing and measuring what matters!
HUMAN CAPITAL MANAGEMENT (HCM) BLUEPRINT
HCM
Drivers
HCM
Practices
Leadership
Practices
Employee
Engagement
Knowledge
Accessibility
Workplace
Optimization
Learning
Capacity
Communication open and effective
Job Design -
Availability information and
training
Processes well defined
Innovation welcome and
rewarded
Inclusiveness collaborate with
employees
Commitment jobs are secure
Collaboration teamwork is
encouraged
Culture supports high
performance
Training rewarded and
supports goals
Supervisor skills managers
Time enable good
work/life balance
Info sharing best practices
Accountability performance is
expected and
rewarded
Development formal career
development
Executive skills senior executives
inspire
Recognition –
part of the
culture
Hiring basis of skill
Value + support reinforce value
of learning
work taps
employees’
skills
Source: HCM Framework developed by: Bassi, L.; McMurrer, D., “Maximizing
Your Return on People”, HBR March 2007
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© Marketing Innovators International, Inc. 2007
Then
Focus On
Employee
Engagement!
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© Marketing Innovators International, Inc. 2007
Why?
Ask Tom
About statements he made emphasizing the
importance of employees to the success of a
business. Tom Peters stated:
“The magic formula that successful businesses have discovered
is to treat customers like guests and employees like people.”
“If your company is going to put customers first, then you must
put your employees more first.”
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© Marketing Innovators International, Inc. 2007
Why?
Ask Jack
When asked which measurements “give the best
sense of a company's health” in a Business Week
advice column, Jack Welch replied:
“Employee engagement first. It goes without saying that no
company, small or large, can win over the long run without
energized employees who believe in the mission and understand
how to achieve it. That's why you need to take the measure of
employee engagement....”
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Why?
Ask Larry
About statements he made emphasizing the
importance of employees to the success of a
business. Larry Bossidy stated:
“I am convinced that nothing we do is more important than hiring
and developing people. At the end of the day you bet on people,
not on strategies.”
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Why?
How’ bout Howard
About statements he made emphasizing the
importance of employees wanting to be part of
something big. Howard Schultz said:
“People want to be part of something larger than themselves.
They want to be part of something they’re really proud of, that
they’ll fight for, sacrifice for, that they trust.”
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© Marketing Innovators International, Inc. 2007
Need more?
Then, review the body of evidence from:
Source: “The Link Between Employee Engagement and Business Results”; Hewitt Associates
2004 / “Workforce Study”; Towers Perrin 2005 / Employee Engagement Study; ISR,
2006,“WorkUSA Report”, Watson Wyatt, 2006; “Employee Engagement, Customer Satisfaction
and Profitability”, Prof. James Oakley of Ohio State University
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© Marketing Innovators International, Inc. 2007
Look at these companies
Fortune "100 Best" vs. Stock Market 1998-2006
16%
14.16%
14%
12%
10.65%
8%
6%
5.97%
S&P 500
2%
6.34%
R 3000
4%
“100 Best” Held
“100 Best”
10%
0%
100 Best Companies with highly engaged employees
outperform their competitors as well as leading stock indices.
Source: Russell Investment Group / Great Place to Work® Institute, Inc.
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© Marketing Innovators International, Inc. 2007
What’s Your Brand Ambassador Policy??
Help your employees do for themselves,
what they can’t do by themselves.
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© Marketing Innovators International, Inc. 2007
Look at these findings
Engagement at high-growth companies exceed those of
lower-growth companies by more than
20 percent.
ISR found that high engagement companies had a
13.2 percent improvement in net income while low
engagement companies had a 3.8 percent decline.
High engagement improved operating income by
19.2 percent while low engagement companies declined
32.7 percent during the 12-month period.
84 percent of highly engaged employees believe they can
positively impact the quality of their company’s products,
compared with only 31 percent of the disengaged.
72 percent of the highly engaged believe they can
positively affect customer service, versus 27 percent of
the disengaged.
68 percent of the highly engaged believe they can
positively impact costs in their job or unit, versus 19
percent of the disengaged.
Companies with high employee engagement had a
27.8 percent improvement in EPS, while low employee
engagement companies experienced an 11.2 percent
decline in EPS over the same period.
Watson Wyatt analyses show that a significant
improvement (one standard deviation) in employee
engagement is associated with a 1.9 percent increase in
revenue per employee.
At about $250,000 per employee. That means a significant improvement in engagement is associated with an
increase in revenue per employee (productivity) of $4,675.
This study demonstrates the significant impact of the
downstream effects of employee attitudes on market
performance, as measured by customer satisfaction, and
financial performance, i.e., profitability.
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For the typical S&P 500 organization, which employs
about 20,000 people, this represents an increase in
revenue of $93.5 million.
© Marketing Innovators International, Inc. 2007
Look at the cost
GMJ’s 2005 Q1 Survey found that, of all U.S. workers18 or older, about
19.2 million – or roughly 14% – are actively disengaged, costing the U.S.
economy about $300 billion.
COST RANGE OF LOST PRODUCTIVITY
% OF ACTIVELY DISENGAGED EMPLOYEES
Key misperception:
• Employers who think their people
leave for more money: 89%
• Employees who actually do leave for
more money: 12%
The ten biggest issues that
employees say companies do
poorly are:
Source: Gallup Organization
Disengagement costs
the U.S. economy
about $300 billion!
Source: Saratoga Institute, Disengagement Study
RPI Annual Conference 4/28/2008
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Poor management
Lack of career growth
Poor communication
Paid under-market
Lack of recognition
Poor senior leadership
Lack of training
Excessive workload
Lack of tools and resources
Lack of teamwork
© Marketing Innovators International, Inc. 2007
Thank You!
Questions?
RPI Annual Conference 4/28/2008
© Marketing Innovators International, Inc. 2007