recognition professionals international turn your employees into successful brand ambassadors: drive...

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


Building

Relationships

with Your

Employees!

What’s the best way to Build Relationships

and Brand Loyalty with your customers?


Does this reflect any employees in corporate America?


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)


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™


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)


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


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.


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)


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


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


This knowledge can influence how companies pursue:

Business planning and development

Employee rewards and recognition

ROI measurement


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.


How do you manage…

Question:


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


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


when they collide?

Recruitment

Expectations

Career Goals

Rewards

Work/Life Balance

Communications

Knowledge Share

Training

Feedback

Retention

Retirement

Multi-Lingual


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™


Show them that you

CARE… through change

Answer:


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


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


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


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


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


Programs

Applications

Solutions

Capabilities

Merchandise Gift Certificates Travel Technology Communications

Gap / Disconnect

Seller

Buyer

Gap / DisconnectGap / Disconnect

Buyer and Seller “Perspectives”

Domain

Domain


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.


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


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.


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


Employee Satisfaction = Customer Satisfaction

So the secret formula is:


We wishit were that

simple …

Not quite…


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


Empowerment(cognition)

Engagement

Satisfaction(emotion)

Motivation (discretion)

= Customer Satisfaction

Satisfaction + Empowerment + Motivation = Engagement

It looks something like this

Hu07

7E+09

= Customer Satisfaction


“You must be the change you wish to see in the world.” —Gandhi


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


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


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


Focus On Employee

Engagement!

Then


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:


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


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


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


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


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.


What’s Your Brand Ambassador Policy??

Help your employees do for themselves, what they can’t do by themselves.


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.


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!


Thank You!Questions?

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