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Recognition Professionals International
Turn Your Employees into Successful Brand Ambassadors:
Drive Greater Financial Performance by Focusing on Employee Engagement
Rick BlabolilPresident, Marketing Innovators
President, Incentive Marketing AssociationRPI 11th Annual Conference – April
28, 2008
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
How does your company build its brand?
… and create profitable, recurring sales?
Building Relationships with Your Customers
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Building
Relationships
with Your
Employees!
What’s the best way to Build Relationships
and Brand Loyalty with your customers?
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Does this reflect any employees in corporate America?
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
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)
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Engaged (alive) – 26%
Not-Engaged (awake) – 55%
Disengaged (asleep) – 19%
Awake
Alive
Asleep
Source: Gallup Organization 2006 Research
71% of employees are either indifferent to their work or actively disengaged!
3 Types of Employees:
“Simply put, true engagement results when employees are willing to lend not only their minds and hands to the organization, but theirhearts as well” — The Human Connection™
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
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)
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Tying back to the…
– 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
Model Performance Analysis
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Internal Branding
Research from Don E. Schultz1 demonstrates that employees deliver the most important Brand Experiences, and help nurture desired Brand Behaviors.
1 See relevant studies at www.incentivecentral.org and www.performanceforum.org
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.
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Internal Branding
Brand Equity
BrandBehavio
r BrandLoyalty
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)
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
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
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
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
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
This knowledge can influence how companies pursue:
Business planning and development
Employee rewards and recognition
ROI measurement
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
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.
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
How do you manage…
Question:
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
The Human Connection™
next-generation (n-gen)
Traditionalist Baby Boomer Gen X Gen YBirth Range 1922-1945 1946-1964 1965-1980 1981-2000Total 48.7 million 78.3 million 63.3 million 80.4 million% of Population 17% 28% 23% 29%
Four Distinct Generations working together for the first time
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
n-gen
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
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
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
when they collide?
Recruitment
Expectations
Career Goals
Rewards
Work/Life Balance
Communications
Knowledge Share
Training
Feedback
Retention
Retirement
Multi-Lingual
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Get’emKeep’emGrow’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
The Human Connection™
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Show them that you
CARE… through change
Answer:
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Look inside the box…
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”
…and target corporate harmony.
Hu07
7E+09
Corporate
…a way of seeing that gives us the way of touching:
Issues, Ambitions, Lives
Harmony DNA
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
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
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Internal Marketing
The Integrated Internal Marketing Calculus is broken into five steps:
1. Customer identification of internal marketing issues2. Relating employee behavior to customer issues3. Valuing financial changes in employee behavior4. Developing appropriate internal marketing programs5. Implementing program evaluation results and
recycling
Don Schultz Professor of Integrated Marketing Communications
Medill School of Journalism, Northwestern University
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
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
Internal Marketing
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Brand Behavior
Desired brand behavior can be driven through rewards and recognition programming to deliver Brand Equity (“Personality”) and Brand Loyalty
BrandBehavior
BrandEquity
Brand Loyalty
IncentiveProgramming
•Compliance programs•Safety programs•Training and development•Corporate meetings•Recognition programs
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Programs
Applications
Solutions
Capabilities
Merchandise Gift Certificates Travel Technology Communications
Gap / Disconnect
Seller
Buyer
Gap / DisconnectGap / Disconnect
Buyer and Seller “Perspectives”
Domain
Domain
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
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.
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Companies that “Get it”
• They have principled leadership
• Management listens and responds
• They have strong reward and recognition systems
• Goals are defined and understood
• They emphasize training
• They link the internal to the external
• They communicate…often and effectively
• 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
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
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.
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
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
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Employee Satisfaction = Customer Satisfaction
So the secret formula is:
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
We wishit were that
simple …
Not quite…
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
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…
Satisfaction/Empowerment/Motivation
Engagement
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Empowerment(cognition)
Engagement
Satisfaction(emotion)
Motivation (discretion)
= Customer Satisfaction
Satisfaction + Empowerment + Motivation = Engagement
It looks something like this
Hu07
7E+09
= Customer Satisfaction
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
“You must be the change you wish to see in the world.” —Gandhi
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Shared Understanding/Belief in
Company’s Values, Ethos & Products/Services
Brand “Promise Keepers”
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.
a catalyst for change
Corporate DNA
Culturally Supporting
Brand Building
External Marketing
Internal Marketing
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Refine your Human Capital Strategy
Source: Adapted from Watson Wyatt Worldwide, Lessons From Watson Wyatt's 2005 HCI: “HR Programs, Turnover Risk and Employee Productivity”
Translate The Human Connection™ into Financial Performance
LEADERSHIP
PRACTICES
KNOWLEDGE ACCESSIBILITY
WORKPLACE OPTIMIZATION
LEARNING CAPACITY
EMPLOYEE ENGAGEMENT
EMPLOYEE SATISFACTION,
EMPOWERMENT, MOTIVATION
SUPERIOR FINANCIAL
PERFORMANCE
BRAND DELIVERY
COST
OPTIMAL TURNOVER
HUMAN CAPITAL STRATEGY
INCREASED PRODUCTIVITY
Hu07
7E+09
ONE-TO-ONE
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Build a blueprint for success
Executive skills -
senior executives inspire
Supervisor skills -
managers
Inclusiveness -
collaborate with employees
Communication -
open and effective
Leadership Practices
Recognition –
part of the culture
Time -
enable good work/life balance
Commitment -
jobs are secure
Job Design -
work taps employees’ skills
Employee Engagement
Info sharing -
best practices
Collaboration -
teamwork is encouraged
Availability -
information and training
Knowledge Accessibility
Hiring -
basis of skill
Accountability -
performance is expected and rewarded
Culture -
supports high performance
Processes -
well defined
Workplace Optimization
Value + support -
reinforce value of learning
Development -
formal career development
Training -
rewarded and supports goals
Innovation -
welcome and rewarded
Learning Capacity
HCM
Drivers
HCM
Practices
HUMAN CAPITAL MANAGEMENT (HCM) BLUEPRINT
Make better, more informed decisions across the entire human capital spectrum to ensure success by focusing and measuring what matters!
Source: HCM Framework developed by: Bassi, L.; McMurrer, D., “Maximizing Your Return on People”, HBR March 2007
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Focus On Employee
Engagement!
Then
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Why?
“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.”
Ask Tom
About statements he made emphasizing the importance of employees to the success of a business. Tom Peters stated:
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Why?
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....”
Ask Jack
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Why?
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.”
Ask Larry
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Why?
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.”
How’ bout Howard
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
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
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Look at these companies
Fortune "100 Best" vs. Stock Market 1998-2006
“100 Best”
“100 Best” H
eld
R 3000
S&
P 500
0%
2%
4%
6%
8%
10%
12%
14%
16%14.16%
10.65%
6.34%5.97%
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.
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
What’s Your Brand Ambassador Policy??
Help your employees do for themselves, what they can’t do by themselves.
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Look at these findings
Engagement at high-growth companies exceed those of lower-growth companies by more than 20 percent.
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.
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.
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 signifi-cant improvement in engagement is associated with an increase in revenue per employee (productivity) of $4,675.
For the typical S&P 500 organization, which employs about 20,000 people, this represents an increase in revenue of $93.5 million.
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.
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Look at the cost
COST RANGE OF LOST PRODUCTIVITY% OF ACTIVELY DISENGAGED EMPLOYEES
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.
Source: Gallup Organization
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:
1. Poor management2. Lack of career growth 3. Poor communication4. Paid under-market5. Lack of recognition6. Poor senior leadership7. Lack of training8. Excessive workload9. Lack of tools and resources10. Lack of teamwork
Source: Saratoga Institute, Disengagement Study
Disengagement costs the U.S. economy about $300 billion!
© Marketing Innovators International, Inc. 2007RPI Annual Conference 4/28/2008
Thank You!Questions?