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Employee Engagement/Experience
The Future of Work: How Artificial Intelligence Will Transform The Employee Experience

Artificial Intelligence is on the verge of penetrating every major industry from healthcare to advertising, transportation, finance, legal, education, and now inside the workplace. Many of us may have already interacted with a chatbot (defined as an automated, yet personalized, conversation between software and human users) whether it’s on Facebook Messenger to book a hotel room or ordering flowers through 1-800 flowers. According to Facebook Vice President, David Marcus, there are now more than 100,000 chatbots on the Facebook Messenger platform, up from 33,000 in 2016.


As we increase the usage of chatbots in our personal lives, we will expect to use them in the workplace to assist us with things like finding new jobs, answering frequently asked HR related questions or even receiving coaching and mentoring.  Chatbots digitize HR processes and enable employees to access HR solutions from anywhere. Using artificial intelligence in HR will create a more seamless employee experience, one that is nimbler and more user driven.


Artificial Intelligence Will Transform The Employee Experience

As I detailed in my column, The Intersection of Artificial Intelligence and Human Resources, HR leaders are beginning to pilot AI to deliver greater value to the organization by using chatbots for recruiting, employee service, employee development and coaching. A recent survey of 350 HR leaders conducted by ServiceNowfinds 92% of HR leaders agree that the future of providing an enhanced level of employee service will include chatbots. In fact, you can think of a chatbot as your newest HR team member, one that allows employees to easily retrieve answers to frequently asked questions. According to the ServiceNow survey, more than two thirds of HR leaders believe employees are comfortable accessing chatbots to get the information they need, at the time they need it. The type of questions HR leaders believe employees are comfortable using a chatbot for range from the mundane and factual ones; such as how much paid time off do I have left, to the more personal ones; such as how do I report a sexual misconduct experience. The comfort level with using AI to answer employee inquiries is shown in Figure 1:

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According to Deepak Bharadwaj, General Manager, HR Product Line, ServiceNow "By 2020, based on the adoption of chatbots in our personal lives, I can see how penetration in the workplace could reach adoption rates of as high as 75% with employees accessing a chatbot to resolve frequently asked HR questions and access HR solutions anywhere and anytime." Bharadwaj points out how fast we are changing our behavior as consumers, given the dramatic rise of conversational AI technology and its ease of use. For example, Amazon's Alexa now has more than 15,000 “skills” (Amazon’s term for voice-based apps), nearly all of which were created in the last two years since Amazon opened Alexa to outside developers. In fact, 10,000 Alexa skills were created since fourth quarter, 2016.


As we become comfortable with chatbots in our everyday lives, we will expect to use them in the workplace.There are already a growing number of technology firms targeting HR with artificial intelligence solutions for sourcing (Textio), interviewing (MontageTalent), on-boarding (Talla), coaching (mobile Coach), social recognition (growBot), and employee service centers (ServiceNow).


Capital Group HR: On The Journey To Digital Transformation 

Artificial intelligence and chatbots are revolutionizing both the candidate and employee experience. As Diana Wong, Senior Vice President of HR at Capital Groupsays,"Technology is an enabler to delivering world-class Advisor and Investor experiences to our customers. So, we believe HR must mirror these best in class experiences by leveraging artificial intelligence for all phases of the employee life cycle from recruiting to on-boarding and developing employees."


Capital Group is piloting a number of artificial intelligence technologies in HR, from using Textio to write more effective and bias free job descriptions to using predictive analytic web based video interviewing through the MontageTalent platform. Wong believes the piloting and usage of artificial intelligence not only improves the efficiency and effectiveness of the candidate and employee experience, but also enables Capital Group to be seen as a modern employer with Millennial workers.


However, there are barriers along the journey as HR experiments with artificial intelligence. I recently spoke about the impact of artificial intelligence to a group of senior HR leaders in Milan last week. This group identified a number of barriers to using artificial intelligence in HR, namely the fear of job loss among HR team members, lack of skills to truly embrace these new technologies and the change management needed to adopt to new ways of sourcing, recruiting, and engaging employees. Wong emphasizes this when she says, "One of the critical success factors to adopting artificial intelligence for HR is the cultural orientation around change and on-going employee communications on how and why the organization is digitally transforming HR."


As HR leaders begin developing a strategy and roadmap for artificial intelligence, I believe there are five work streams to begin this digital transformation.


1. Embrace artificial intelligence by experimenting with a range of piloting a range of chatbots

Chatbots are already ubiquitous in our lives as consumers, and now they are starting to appear in the workplace. Rather than just read about themconsider embracing a productivity chatbot as your newest HR team member. There are a number of new digital virtual assistants led by AmyZoom, and Shae. Each represents new way of working using natural language processing to schedule meetings, automatically generate documents, and provide you with personalized health data. So why not have your HR team pilot these as a way to understand the power of artificial intelligence on behavior change?


2. Develop a shared vision with cross functional stakeholders of HR, IT, Real Estate, Communitarians, and Digital Transformation 

Delivering a compelling employee experience is a competitive advantage in attracting and retaining talent. Companies are realizing that transforming employee experience is not an HR initiative, rather it is a business initiative. This means senior C-level executives from HR, IT, Digital Transformation, Real Estate, and Corporate Communications need to develop one common shared vision on what a memorable and compelling employee experience is and define the elements of the employee experience over the short, medium, and long term.


3. Understand the implications of implementation on the technology roadmap

All new technology based initiatives such as using artificial intelligence in the workplace require the design of a technology roadmap outlining the short-term and long-term goals and how the organization will meet these goals. This means the cross functional team of HR, IT, and Digital Transformation will need to agree on a shared vision for employee experience and define the technology roadmap to bring this vision to reality.


4. Identify new job roles needed to fully leverage AI in HR

Adding a number of new job roles is part of the journey to transform employee experience in an organization. This starts with creation of the Head of Employee Experience role. I interviewed Mark Levy, the first Head of Employee Experience for Airbnb in a Forbes column, “The Workplace As An Experience: Three New HR Roles Emerge.” This role is responsible for bringing to life the Airbnb mission of Belong Anywhere to life by creating memorable workplace experiences which span all aspects of work space, recruitment, development, volunteer experiences, and even the menus in Aribnb facilities.  Other roles I have seen created during the implementation of an employee experience transformation include Head of Conversational Design at Capital One, which aims to create conversational interfaces for customers to access account information and complete financial tasks. GE Digital has also created the unique role of Recruiting Scrum Master. This role applies many of the scrum techniques used in software development to recruiting by breaking down the massive hiring needs into incremental and iterative steps, where the highest value hiring challenges are addressed first for the hiring manager.


5. Upskill HR team to understand the power of artificial intelligence in HR 

Build an expertise on how AI will impact HR within your team. Designate one team member to partner with your IT and Digital Transformation group to provide HR with the latest information on new AI products, services, and how other areas in the organization such as marketing or IT are embracing AI to create more compelling customer experiences.

Enterprise AI adoption is still in the early stages, but the opportunity to develop a concrete understanding of AI, its ecosystem, and the implications of augmenting new HR job roles is massive. We are only at the beginning of  this journey where artificial intelligence and chatbots transform all aspects of HR processes. What is your company doing to transform the employee experience using artificial intelligence?

Jeanne C Meister is Partner, Future Workplace and co-author of The Future Workplace Experience.



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Employee Engagement/Experience
Culture and engagement: The naked organization

Employee engagement and culture are now business issues, not just topics for HR to debate. And there’s no place for organizations to hide.

 

·       In an era of heightened corporate transparency, greater workforce mobility, and severe skills shortages, culture, engagement, and retention have emerged as top issues for business leaders. These issues are not simply an HR problem.

·      Culture and engagement is the most important issue companies face around the world. 87 percent of organizations cite culture and engagement as one of their top challenges, and 50 percent call the problem “very important.”

·      Organizations that create a culture defined by meaningful work, deep employee engagement, job and organizational fit, and strong leadership are outperforming their peers and will likely beat their competition in attracting top talent.

Today’s organizations live in the Glassdoor era. Every corporate decision is immediately publicly exposed and debated. Once-private issues are now posted online for every employee—and every potential employee—to read. An organization’s culture—which can be loosely defined as “the way things work around here”—is increasingly visible for all the world to see.

 

Given the harsh spotlight of this new transparency, an organization’s culture can become a key competitive advantage—or its Achilles’ heel. Culture and engagement are now business issues, not just topics for HR to debate. And there’s no place for organizations to hide.

This year, employee engagement and culture issues exploded onto the scene, rising to become the No. 1 challenge around the world in our study.1An overwhelming 87 percent of respondents believe the issue is “important,” with 50 percent citing the problem as “very important”—double the proportion in last year’s survey. Two-thirds (66 percent) of HR respondents reported that they are updating their engagement and retention strategies (figure 1). Along with decreasing readiness, our data also showed substantial capability gaps in engagement and culture across countries and regions (figure 2).

DUP1132_CultureEngagement_Figure1

DUP1132_CultureEngagementFigure2Research shows that in most companies, engagement is low. According to the Gallup polling firm, only 13 percent of the global workforce is “highly engaged.”2 Upwards of half the workforce would not recommend their employer to their peers.3

Despite this challenge, a substantial proportion of the respondents in this year’s survey (22 percent) report that their organizations have either a poor program to measure and improve engagement, or no program at all. Only 7 percent rate themselves excellent at measuring, driving, and improving engagement and retention (figure 3). And only 12 percent believe their organizations are excellent at effectively driving the desired culture.

DUP1132_CultureEngagement_Figure3

This is a new and systemic problem for organizations worldwide. Why has it become so acute?

·      Employees are now like customers; companies have to consider them volunteers, not just workers: As the job market has heated up and new technologies have exploded, power has shifted from the employer to the employee. Websites like Glassdoor, LinkedIn, Facebook, and others not only increase transparency about a company’s workplace; they make it far easier for employees to learn about new job opportunities and gain intelligence about company cultures.

·      Leaders lack an understanding of and models for culture: Culture is driven from the top down. Yet most executives cannot even define their organization’s culture, much less figure out how to disseminate it through the company.

·      The new world of work changes the way we engage people: The world of work is very different from and more complex than it was only a few years ago. Employees today work more hours and are nearly continuously connected to their jobs by pervasive mobile technologies. They work on demanding cross-functional teams that often bring new people together at a rapid rate. Flexibility, empowerment, development, and mobility all now play a big role in defining a company’s culture.

·      Employees’ motivations have changed: Today’s workers have a new focus on purpose, mission, and work-life integration.4  Research shows that a variety of complex factors contribute to strong employee engagement, including job design, management, work environment, development, and leadership.5 Today, more than twice as many employees are motivated by work passion than career ambition (12 percent vs. 5 percent), indicating a need for leadership to focus on making the work environment compelling and enjoyable for everyone.6

Culture and engagement is no longer an arcane topic owned by HR. It is now an imperative for every leader and every executive in the organization. Many studies now show that highly engaged companies can hire more easily, deliver stronger customer service, have the lowest voluntary turnover rates, and be more profitable over the long run.7

Google, a highly rated “best place to work” in many studies, focuses heavily on culture.8  The company regularly measures dozens of factors to understand what makes people productive and happy. This research has shaped Google’s workplace culture in myriad ways—from the company’s open workplace design to the provision of free gourmet food and on-site laundry services for employees.

Although culture and engagement play such a critical role in business performance, most organizations do a poor job of measuring their achievements or shortcomings. Historically, companies have relied on annual engagement surveys, often costing hundreds of thousands of dollars and taking months to deploy. And very few companies have a process or tools to measure culture and learn where it is strong, weak, or inconsistent. At a time when corporate cultures are being continuously debated, shaped, and redefined on social networks, the once-a-year survey is perilously obsolete.

While most leaders are measured on the basis of business results, organizations must begin holding leaders accountable for building a strong and enduring culture, listening to feedback, and engaging and retaining their teams.

Fortunately, new tools are emerging to provide organizations with real-time sentiment and employee feedback. A new breed of vendors offers pulse survey tools, employee sentiment management tools, culture assessment tools, and real-time employee monitoring tools to help leaders and supervisors rapidly assess when engagement is high and when problems are arising.9 These new tools make it possible for organizations to monitor employee sentiment with the same level of rigor and speed as they measure customer sentiment.10

Ultimately, the issues of culture and engagement are driven by leadership. Companies pushing aggressive growth plans, experiencing financial stress, or going through layoffs or mergers often see a radical shift in culture. While most leaders are measured on the basis of business results, organizations must begin holding leaders accountable for building a strong and enduring culture, listening to feedback, and engaging and retaining their teams.

HR should also understand the impact of performance management, work-life balance, and flexibility on engagement. While management practices once pushed companies toward a highly competitive performance management process, in 2015, many companies are finding that pressure and competition often lead to high turnover and ultimately poorer business results.

Lessons from the front lines

A series of events at one global financial services company not only fed a negative public perception of the company, but also generated a lack of trust internally. To turn the organization around, the company launched a five-year transformation program, a key component of which was to build a sustainable, values-driven culture across the organization.

This cultural transformation had three key distinguishing principles that were critical to the program’s success:

·      Leadership drives culture which in turn drives performance: Company leaders should drive the change and be highly accountable

·      Processes, policies, and systems should be congruent with the company’s new purpose and underpinning values

·      The results should be measurable and reported both internally and externally, providing a highly visible yardstick of progress

To jump-start the transformation, HR introduced a series of leadership and development programs to support employees in being willing and able to live the new values. There was an initial focus on informing, engaging, and empowering senior leaders and culture carriers to promote the company’s new values, equipping them with the necessary insight, knowledge, and tools to drive the change. All processes, policies, and systems were then aligned with the new culture, with performance management, talent management, recognition, and learning all transformed to reflect the new values and behaviors. The company also deployed a cultural assessment tool to understand and measure the conditions for successful transformation.

These activities had a strong and measurable business impact. The result: an improved public reputation; an aligned senior leadership group with culture at the top of their agenda; a growth in trust both internally and externally; and stronger employee engagement and commitment to the organization’s new culture and values.

Where companies can start

·      Engagement starts at the top: Make engagement a corporate priority, and modernize the process of measuring and evaluating engagement throughout the company. Benchmark the company, strive for external recognition as validation of efforts, and reinforce to leadership that the engagement and retention of people is their No. 1 job.

·      Measure in real time: Put in place real-time programs to evaluate and assess organizational culture, using models or tools to better understand where it is strong, where it is weak, and how it really feels to workers.

·      Make work meaningful: Focus on leadership, coaching, and performance management to help employees make their work meaningful. Reinforce the importance of a coaching and feedback culture, and teach leaders how to be authentic and transparent.

·      Listen to the Millennials: Their desires, needs, and values will shape the organization’s culture over the next 10 years.

·      Simplify the work environment: Read our research in this report on the simplification of work to help reduce the burden of today’s 24/7 work environment.

Bottom line

The old adage “culture eats strategy for breakfast” applies to every organization today. Business and HR executives must understand that highly engaged companies attract the best talent, have the lowest voluntary turnover rates, and are more profitable over the long run.11 Companies should use 2015 as a time for change. By focusing on driving engagement through the right corporate culture, companies can improve execution, retention, and financial performance.

 

 


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Employee Engagement/Experience
Employee Journey Analytics: A new frontier in Employee Experience Management

Companies have learnt from their customers that great experiences are rewarded with greater loyalty and engagement, driving a windfall on both top and bottom lines: Customer satisfaction up 20%, Revenue up 15% and Cost of serving customers down by 20%  (McKinsey). The acknowledgement of customer experience as a driver of competitive advantage is accelerating: As reported in this study, 75% of companies said their top objective was to improve customer experience. CEOs and Executive Teams now commit more time and attention to CX.

 

Why should we care in HR?

Progressive companies are transposing the CX idea to HR, aiming to manage their employee’s experience at least as well as they manage their customers’. Expected benefits are along similar lines:

  • Increase in Employee / candidate engagement (estimate: ~26%)
  • Reduction in HR cost to serve through mass customization, simplification and the judicious use of bots and AI (estimate ~22%)

Employee experience is created along the Employee’s journey from Candidate to Alumni. It is a composite journey reflecting three types of experiences:

  1. Direct experience of HR Services and systems,
  2. Leadership Experience (interactions with direct manager and broader management team) and Culture Experience (interactions with coworkers within and across teams),
  3. Workplace experience, both Physical (Workplace) and Digital

 

 

What can HR actually do to improve the employee experience?

While the sum of all three experience components constitutes the full employee experience, HR directly controls the first type of experience only, created when providing HR services to various personas in the employee base. This is the Customer Experience of HR (CXHR).

CXHR is one of the few direct drivers of Employee Engagement that HR fully owns and is able to control and improve over time. As an obvious low hanging fruit, it is the first port of call for HR leaders aiming to improve the Employee Experience and give their teams clear marching orders. Components two and three are more challenging to tackle operationally, since they’re only partially owned or just influenced by HR.

However, HR teams will develop new CX capabilities and skills through deploying CXHR in their own ‘backyard’ (see Volker Jacob’s article – ‘The What and How of a digital strategy’). As such, HR will become the top contender to fully own the broader Employee Experience Agenda and drive component 2 and 3 – an important discussion indeed, but outside the scope of this article.

The idea of CXHR is intuitive, and many progressive HR leaders are acting on it: Staffwise is forecasting 100% increase in employee experience roles on LinkedIn this year. However, the field is far from being mature and practitioners find precious few supporting tools, technologies or existing practices to accelerate their progress. The question is: How to quickly move from an inwardly focused, somewhat siloed HR function to one that embraces an ‘employee-in’ perspective and ultimately create great HR experiences for Employees? 

The relatively more mature practice of CX in the customer facing world, is teaching us that three principles underpin successful transitions of teams to an ‘outside in’ operating model. They have direct applications to CXHR:

  1. Journey design and mapping: Journey Visualization breaks down silos
  2. Journey Analytics: KPIs drive performance and anchor new behaviors
  3. Reporting and Governance: Journey owners, global standards, local versioning

 

1. Visualizing journeys to break down silos

Journey maps are shared representations of customer journeys. Visualizing the full experience map, including cross functional process owners, communication / service channels, detailed touchpoint description and resulting experience is a foundational step to break down siloed mental models and build great experiences from the perspective of the customer.

Taking the HR example of a typical onboarding journey as seen from the Employee’s perspective: Horror stories are common and clearly impact engagement, attrition and time to productivity: According to various studies from Korn Ferry, Leadership IQ and Aberdeen group, 46% of new hires fail within 18 months of start date while up to 25% leave in their first 6 months.

 

 

More telling: 90% of new hires decide whether to commit long-term to their new employer within their first 6 months. These stats are scary from a workforce planning and enterprise productivity perspective.

They also point to a very leaky Talent Acquisition / Onboarding bucket, reinforcing the importance of well designed, managed, onboarding experiences. To redesign the onboarding journey requires breaking existing walls, both within and outside HR: line manager, L&D organization, HR generalists, Recruitment, IT and systems, facilities, and of course, the Employee.

By visualizing the journey together, participants learn to empathetically see journey elements with 360-degree context, opening new and shared avenues for improvement, simplification, radical redesign or introduction of new systems or technologies. As discussed in a previous article on service design thinking, the journey map is an ever-evolving platform that anchors design thinking efforts and experimentation over time.

CX practitioners use standard journey visualization tools that are built for purpose. They synthesize CXHR elements i.e. personas, touchpoints, owners, experience channels… and capture the shared representation of the problem in a consistent format that scales across the enterprise, also allowing for local variations. In 2017 we partnered with 22 global companies to co-create such a journey design tool, able to capture key CXHR journeys (Moments that Matter). Two findings:

  1. For ‘moments that matter’ in HR, the set of touchpoints and journey attributes are easily transferrable from one company to another, as well as the definition of personas that experience them. That is a potential simplifier for CXHR compared to customer-facing CX where practitioners are either competitive or in businesses that are too different to compare apples to apples. CXHR is an ideal field to apply the cocreation approach and solve the shared problem together.
  2. Just as is the case in the Customer-facing world, all touchpoints are not created equal. For example, in a recruitment journey comprising 57 touchpoints, the co-creation group identified seven touchpoints that had disproportionate impact on the overall candidate experience. This allows practitioners to prioritize efforts and focus scarce resources on what matters most: These seven touchpoints and the overall journey design and flow.

 

2. Journey Analytics: Measuring and Benchmarking

Designing and visualizing journeys is an important starting point, but 2 questions arise:

  1. How do we know if redesign efforts are producing results – is CXHR increasing or decreasing the experience after redesigning a touchpoint or an entire journey?
  2.  How can journey maps become a living part of the team’s operating system? Alternatively, our beautiful maps will be carefully locked inside a secure closet, along with design thinking training materials, and never seen again.

Answer: Journey analytics. Customer Journey Analytics is an evolving field in the Customer facing world. What can we learn from existing implementations and apply in the HR world?

CX Measurement provides a quantitative and qualitative way to understand the drivers of positive or negative experience. It operates on two levels:

  • At the lowest level, we want to measure and track touchpoint-level experience, to ensure that the basic building blocks of a journey are as good as can be. For example in the candidate journey, this level could translate in ‘2nd interview experience’ or ‘Experience when filling out application on website’.
  • At the highest level, measuring and tracking overall journey experience  recognizes the fact that the whole experience is not necessarily the sum of the its parts at the sub-journey or touchpoint level. Practitioners must keep focus on improving the ‘flow’ of the overall journey in addition to improving individual touchpoints.

Three types of metrics are measured and tracked:

  1. Outcome metrics such as customer churn, repeat business etc… In HR, this translates into Employee Engagement measures – Engagement being an outcome of the employee experience.
  2. Perception metrics such as Customer Effort (Ease) and NPS (Emotion) are informed by surveys and translate directly in HR
    • We can directly transpose both metrics in HR: CES (Customer Effort Score) and NPS (Net Promoter Score)
    • How to best gather perception data? As customers and as employees, we live in a survey-heavy environment. To improve participation rate and not disrupt employee workflow, survey design trends are following expectations from millennials towards simple, short, ‘in the moment’ surveys and more engaging formats that are both more visual and personal.
    • Another (more qualitative) source of perception data is any data environment where employees can share how they feel, as long as the data can be directly related to the journeys / touchpoints we are measuring. For example, mining social media postings from candidates to improve the candidate journey.
  3. Descriptive metrics: ‘Second hand’ data that describe the experience as captured by internal systems supporting the journey i.e. average customer wait time, #transactions.. In HR, some of this data would be readily available from HRIS, ATS and other HR systems

 

 

CX measurement is the main currency used to frame the success of customer facing teams, recognize wins and know when or what to improve. Executive / CEO levels increasingly review CX metrics as leading indicator of success for sales, service and marketing teams. In HR, CXHR metrics hold a similar potential – to become the most powerful HR operational management and continuous improvement tool available.

In the spirit of continuous and competitive improvement, what about Benchmarking? Customer facing CX Benchmarking is a controversial topic due to the difficulty (competition or ‘apple to apple’ issue) of comparing customer journeys across companies. However, CXHR elements (HR Personas, Journeys, Touchpoints) are similar and largely comparable from one company to another. A CXHR benchmarking platform to effectively rate performance at the HR touchpoint / journey level  is an exciting development that we’re currently exploring with our cocreation group. We will report on progress as we go.

Finally, Journey analytics trends are tracking developments in AI and machine learning on three fronts:

  1. Boost the volume and accuracy of measurements with more conversational and innovative collection of perception data, that includes mining of unstructured text data, embedding micro surveys into workflow apps, etc..
  2. Predictively model customer behavior based on the sum of experiences gathered in customer journeys, detecting unusual CX patterns, predicting opportunities for improvement both at the journey management level and touchpoint level
  3. Real time, ‘In the moment’ support of customer facing teams – for example analyzing conversation patterns and empathy levels to give real-time conversation guidance ( www.cogitocorp.com/)

Not all of these trends will directly apply to HR but we can expect that the rapidly developing Journey Analytics field will yield many innovations that will bring us closer to creating an ideal Employee Experience over time.

 

3. CXHR Governance structures and reporting

Two types of Governance models are effective and could potentially be combined:

  • Central governance committee managing all customer journeys. It is typically composed of executive and operational sponsors, program and project managers. CX analytics are continuously reviewed across the board, informing prioritization of CX initiatives. This approach can also apply to HR and regularly feed the HRLT conversation.
  • Senior Journey owners, with direct reporting lines to Exco/CEO level: In some cases, managers of large customer journeys report on journey analytics to the CEO on a weekly basis. One could imagine a similar CHRO-level periodic review of analytics for large HR journeys such as recruitment or onboarding.

In both instances, large, global organizations adopt CX measurement standards that are simple and scalable (for example KPIs, measurement approach, survey design etc…) and let local businesses version these standards for best fit in their markets. Again, the same principles make sense for CXHR measurement to avoid un-necessary complexity and allow for best practice transfer, benchmarking etc…

Dashboards are designed to fit the chosen organization structure and reporting cadence. They generally reflect two levels of reporting:

 

 

Global dashboards representing all key journeys across the company (see above):  Such a dashboard could become a vital operational management tool for HRLT, reporting in real time employee’s perspective on HR’s performance. It is a bold, ‘truth telling’ approach to HR management as it leaves no place for HR teams to hide by creating direct accountability to great CXHR. As is the case for customer facing teams, the effort is more than validated by superior employee engagement outcomes.

 

 

Local dashboards, report at the journey (see above) or touchpoint level. They help HR journey owners problem-solve and optimize journey design over time, giving them clarity on what aspect of the experience needs improvement and by how much.

These multiple levels of reporting are the key to anchoring the new ‘customer centric’ mindset with HR teams and manage accountability to CXHR improvements. Including benchmarking data at both levels could also be a game changer in terms of identifying CXHR gaps when compared to talent competitors and prioritizing improvement priorities.

 

Conclusion

Winning the battle for Employee Experience in a ‘zero-sum’ talent market will depend on HR Leadership teams’ appetite to master the fundamental tenets of CXHR and execute the approach quickly. Employee journey analytics are the missing link between intentions (visualization, training, hackathons, etc…) and effective, sustained CXHR practice across all HR services. In a mirror image of what is currently taking place in the customer facing world, CXHR KPIs and dashboards will infuse standard HR management frameworks through MBOs, recognition, communication streams and executive reporting. In turn, HR teams will become powerful and engaged agents of change serving the Employee Experience cause, first leading by example within HR, before turning their attention and newly acquired CX skills to the more ambitious (and difficult) resolution of the entire Employee Experience challenge, including systems, workplace and culture. Exciting times!


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Employee Engagement/Experience
How to build an EX-Centric Organization

Our survey of 250+ companies and research on EX Pioneers, reveal a clear business case to transforming your business, designed around your customers and workforce (see links to more info at end of article)

The Customer and Employee Experience

by Elliott Nelson and Hannah Olvera Doman - Kennedy Fitch

We have seen breakthrough performance in companies in recent years that have re-built on the concept of Customer Experience (CX). Analytics and mobile technology have provided organizations with deeper insights into what drives behavior – what attracts customers, what makes them return, buy higher margin products, and most importantly, what makes them want to promote their company’s products.

Multiple studies show that CX-Centric companies see significant growth vs. the competition, including research that shows organizations with high NPS ratings grow at twice the rate of their peers.

If this CX data is true, does the same apply to Employee Experience (EX)? Business leaders should be asking themselves 3 questions:

·     What is the correlation between business results and Employee Experience (EX)?

·     How is EX different from Engagement (which is steadily declining)?

·     What does it take to weave EX into the fabric of an organization? Is there a common ‘EX Playbook’ that can be successfully applied in a variety of business situations?

To answer these questions, KennedyFitch launched a global study to understand how companies are approaching EX. Over 250 companies worldwide responded to our recent online survey. 4 out of 5 said EX is very important and 9 out of 10 said it would become more important in the next 1-2 years. Only 1 in 10, however, felt their company had made significant progress developing EX. And many reported that lack of internal EX expertise is a big problem.

We interviewed another select group of companies who were further along in the journey, including GE and Airbnb, who are considered ‘EX Pioneers’. We also looked at current publications – books and internet articles – to see what existing research could tell us. 

To start, we found the following answers to the three questions mentioned above:

1.    There is a clear business case and a correlation between EX and business results.

2.    Engagement and EX come from two different worlds - they measure quite different things, come from different sources and have widely different applications.

3.    Building an EX-Centric organization requires a complete Transformation in the way of thinking and operating. Most companies are in the early stages of learning what EX is and few understand what is required for implementation.

What we found in our research make us believe that the movement to design CX and EX as part of a Disruptive Business Transformation is one of the most revolutionary and impactful actions a company can take. Let’s dive a bit deeper into each of the three questions.

What is the EX Business Case?

Research[1] done recently by Jacob Morgan found the following comparisons of EX vs. non EX companies:

·     EX companies are 4.5x more frequently listed on Most Innovative Companies lists by Fast Company, Boston Consulting and Forbes, than non EX companies

·     6x more frequently listed on GlassDoor’s Best Places to Work, Fortune’s 100 Best Companies for Millennials and LinkedIn’s Most In Demand Employers

·     3x more frequently listed on Brand Z and Forbes’ ‘Top Brand Value’ companies

·     40x more frequently in the list of Exponential Organizations (companies whose impact is disproportionately large – 10x larger - vs. other organizations)

·     4.4x Average Profit vs. non EX companies

·     2.9x Average Revenue per employee vs. non EX companies

The shift to EX is rooted in a silent revolution taking place in organizations across the world as companies transition from treating humans as assets or “capital” (Engagement) to treating them as human beings (Employee Experience); from forcing them to submit to and work within certain processes and norms (managing assets) to understanding them and how they work best and designing solutions around their needs (individualization).

Tom Friedman, in a recent article succinctly describes how technology is making a huge impact as work is being disconnected from jobs, and jobs and work are being disconnected from companies, which are increasingly becoming platforms (moving from “owning” employees to “having access” to capabilities). This major shift from the traditional idea of ‘We own talent’, as reflected in the concepts of “Human Capital”’ and “Talent Management” to: “We create an attractive platform for you to learn and do your best work.”

EX and CX companies create platforms for Employees and Customers to individuallyexperience their organization. The organizations that successfully do this will be the winners as the disruptive force of technology shifts the balance of power from companies to both consumers and employees.

What is the difference between Engagement and EX?

Engagement and EX come from 2 different universes. Engagement sprang out of the era of top-down, command and control thinking when management wanted to know if employees were content with current decisions and practices. Engagement surveys essentially ask: “Here’s what we’ve decided to do, how happy are you with these decisions?”

Engagement surveys have often been long lists of things management decided to ask, with a quantitative rating. In the end, companies were ‘guessing’ if they were asking the right questions (why else ask 80-90 questions?). Moreover, Leadership Teams would only run the surveys every 1 or 2 years at most, and if it was a ‘Bad Year’ they would cancel the survey because ‘We already know people are upset.’ Imagine asking your customers for input once every year or two, and only when you know they’re happy.

Multiple studies from leading engagement research companies (Gallup, AonHewitt, Hay, Mercer, WillisTowersWatson, Bersin) all confirm falling engagement scores over several decades. So it seems that focusing on engagement does not deliver promised business value.

EX and Engagement are built differently. EX is built on Design Thinking – where organizations watch and observe and continually ask employees open-ended qualitative questions e.g. “What matters most to you?” rather than guessing “Does X matter more or does Y?”, when it might actually be “none of the above”. EX Pioneers build and test prototypes of Employee Journeys. And similar to CX, also EX puts the Net Promoter Score in the mix.

Design thinking places the issues of the employee at the center of the problem-solving process, and analyzes issues and solutions from her point of view, not the organization’s. EX Pioneers then build and test prototypes of Employee Journeys to remove pain points and elevate the experience. To measure their success, EX Pioneers uses business-centric metrics to measure their success, such as Net Promoter Score, EBIT, Profitability, Growth, and others. They avoid creating metrics that are not tied to business outcomes.

EX has a different goal. EX is really about building insights and an understanding of your employees and giving them a say in shaping the organization they are working for. Just as CX is about designing the organization around customers.

EX gets input on what matters to employees from a variety of sources outside of surveys including face-to-face interviews, focus groups, hackathons, instant feedback apps, and analytics. Together these paint a picture of what employees feel most strongly about, with emotion being a powerful window into behavior.

Figure 1 - Engagement v. Employee Experience

Paul Davies, Head of EX at GE defines EX as “enabling our people to do the best work of their lives through moments that matter”. Cisco, Deloitte and LinkedIn have similar definitions. GE leverages concepts such as personas, design thinking, and storyboards as it curates EX. Paul says, “We don't go an hour without using one of these. We ask our employees, our people leaders and our candidates what matters most to them, we listen to their stories, listening especially for emotions.”

Mark Levy, Head of EX at Airbnb since 2013, says they borrowed the idea from Disney that ‘every frame matters’ in telling employee stories. Cisco holds regular hackathons where employees give input on People processes.

Using all these ongoing insights, EX involves employees in the design and shape of the company, helps identify organizational strengths, and discovers the situations in which people learn and perform best. These insights are being used to restructure (remove silo’s, layers and titles), trim processes, turn rules into employee judgment. All of which helps companies unlock new paths to faster growth, profitability and innovation. 

How to build an EX-Centric Organization?

Our study of existing books and publications did not yield a standard definition of Employee Experience. Nor did it reveal an outline of the steps for designing the Employee Experience – a Playbook. Most importantly, we didn’t find research that matched the depth of the Transformation that EX pioneers say is required to become an ‘EX-Centric Organization.’

Our primary research therefore became a quest to 1) find a common definition, 2) discover an EX Playbook, and 3) understand the kind of Transformation required.

Through interviews with more experienced EX Pioneers, we found that while there are some common elements in designing EX, the particular ingredients are refreshingly unique to their companies, because every culture and business context is unique. In Designing EX, it is not the “What” that matters (e.g. ticking the boxes of 17 or 21 precise EX elements), it is rather the “How”. You need to learn to cook, but the best chefs go by taste, rather than by recipe.EX design is unique to each organization.

This is quite a radical departure from the past when large consultancies scanned hundreds of companies to distill the exact ingredients of ‘good Talent Management’ or ‘Leadership’, and sold assessments and maturity models. Unique EX design means also that the definition of EX varies from company to company. Most organizations look holistically at ‘Workforce’ (FTE’s as well as contract, temporary or ‘Agile’ workers). They look at everyone who interacts with the company from recruits to alumni. Most definitions talk about ‘Holistic end-to-end journeys’ and ‘Designing the best possible experiences for employees’. The main point is that organizations are designing experiences around the employee rather than making employees fit to the organization.

We asked companies about the motives and challenges they have in building EX. Our 250+ Survey Respondents listed their top three most important reasons for building EX:

  1. Business growth
  2. Engagement
  3. Creating competitive advantage

They listed their top four challenges as:

  1. Transforming the Culture – Given the radical shift to an outside-in, bottom-up culture required for successful EX, companies recognize the need for an equally radical transformation.
  2. Leadership mindset – EX pioneers emphasized that the CEO and leaders at all level must be on board for EX to succeed
  3. Complex Organization – Simplification is one of the keys to making EX work
  4. Lack of internal expertise in building the Employee Experience – Given that most companies have never built EX, this is not a surprise. EX Pioneers report using Marketing, Design, Facilities experts.

EX Pioneers cite the top four keys to success:

1.    Top leadership and CEO support – EX touches so many parts of the organization, it needs sponsorship and complete support at the top

2.    The goal is to become a Disruptor – EX Pioneers are convinced EX is a way to become disruptive and gain competitive advantage

3.    EX is the centerpiece of Cultural Transformation – EX requires a complete transformation in the way of thinking and working

4.    Involve many functions outside HR – EX is best when it is not an HR-only effort. EX Pioneers typically combine HR with all the functions that touch Culture and employees e.g. Marketing, Communications, IT, Facilities, etc.

Here are a few other highlights of what we learned:

  • EX Pioneers often start with CX. Customers are a good place to engage the CEO and senior leadership, who then pivot more naturally to seeing employees as customers (a big mindset change!), understanding what is meant by ‘experience’, and looking holistically at ‘Workforce’
  • EX Pioneers make CX and EX the centerpiece of their Transformation as they design everything around customer and employee drivers. An oft-cited goal of Transformation is to become Disrupters.
  • CEO’s of the more progressive and successful EX Pioneers e.g. Adobe and Airbnb promote EX and CX at the top of their agendas because there is such potential for strong business outcomes. Monir Azzouzi, Head of EX Pioneer Maxis, emphasizes that it is a non-starter if the CEO isn’t in the lead and driving key changes. Companies we interviewed who struggled to implement EX and CX did so because they lacked CEO support and sponsorship.
  • Successful EX companies design around customer and workforce, and transform to out-side in, bottom-up thinking. They become more agile and innovative. They adapt and simplify processes and decision-making in response to new customer and employee insights. EX and CX Pioneers become flatter, less hierarchical.
  • EX pioneers e.g. Google, LinkedIn, ING and Intel borrow heavily from Design Thinking, starting with listening on multiple channels; observing, interviewing, feedback tools, hackathons, utilizing employees to identify holistic journeys, listening for feelings and emotions, creating personas, designing experiences which in turn are vetted, tested and prototyped, and ultimately folded into a Digital People Strategy (see Figure 1).
  • EX (just like CX) is designed around a series of questions to get at feelings and behaviors that build on predictive data e.g. Why do our top performers join or leave? Why do our expats leave? Why do some teams outperform the rest?
  • EX Pioneers are constantly testing what they roll out, getting more feedback which is brought back to EX design teams who make changes and then the process starts all over again.
  • EX and CX companies are “insanely” data-driven; they borrow, buy or build analytics capabilities to collect and interpret data. They build seamless and borderless cooperation between different data-intense parts of the company and seek to integrate and connect a wide variety of data points
  • Hot new role: There are only 40-50 Heads of EX and new Heads of EX positions are being created all the time. In some cases, like Airbnb and Adobe, the CHRO role is being replaced by the Head of Employee Experience. We believe that this is the way of the future.
  • The lines between HR and Marketing disappear as they start sharing a common responsibility for both their internal and external brand (Adobe and others have one person who is Head of EX and CX, replacing the CHRO). But it doesn’t stop there – EX Pioneers have Marketing, Design, Facilities Management and Analytics roles in their EX Teams.
  • ·Talent, Learning, Recruiting, etc. realign to reflect holistic journeys. Key processes also are radically redesigned e.g. Performance Management (more ongoing development focus), Learning (bite-sized, Just-in-time), etc.

Figure 2 – Key steps in designing the Employee Experience

Sample of insights from EX Pioneers

We discovered in our interviews with EX Pioneers that companies have many different business cases for investing in the Employee Experience. Here are a few examples of companies we interviewed:

  • Scaling Culture for growth - AirBnB’s CEO Brian Chesky was adamant about scaling their Culture. When the new EX Head Mark Levy brought together the groups touching Culture (Recruiting, Events, Facilities, Real Estate, Design, etc.) to create an End-to-End journey for employees as they had done for customers, Brian liked it because ‘it wasn’t HR!’ AirBnB have used EX to change the way they interview, to judge whether someone is joining for the right reason, assessing how they fit with AirBnB values, and approach to life and work.
  • Regain Market Share and Competitive Advantage - Maxis was the largest, most successful Telecom company in Malaysia but lost their market position to disruptive startups with leaner, better business models. They used EX as a primary way to accelerate growth and build their way back to competitive advantage. Along the way, they flattened from 51 job grades to 4 and removed titles. Their CEO Morten Lundal sits in the same kind of open space as everyone else.
  • Integrate 2 distinct Cultures - Startup Learnvest was built around apps for Millennials to do Financial Planning, and was bought by 160 year old Northwestern Mutual Life, who saw the EX concept in Learnvest as the key to integrating their two distinct cultures. Head of EX Lina Stern says EX starts with the idea that 'Employees are your first customer'. LearnVest wanted to be the destination of choice for innovators – by attracting, engaging and learning to do things differently. They focused on building an enriched and flexible environment, building great data, and helping people engage in immersive experiences e.g. virtual reality offices where people can come together, and having a professional film editor to help you create your own movie. 
  • Digital Strategy – ING began with CEO Ralph Hamers declaring to his business leaders: ‘Become Disrupters before someone disrupts you’. ING developed a clear Digital Strategy for CX, based on Design Thinking understanding the psychology of our clients. Then we asked, if we can do this for our clients, why can’t we do this for our employees? We started by interviewing employees – asking "What are your common pain points, hurdles", defining with them what a good solution looks like. We developed an App to help employees develop at that point of their career where they might have a short term assignment.
  • Raise Productivity - GE recognized that EX was the pathway to raising productivity and getting the best work from their people. Paul Davies, GE’s Head of EX, spent his first 100 days visiting other companies e.g. Airbnb, Disney, Deloitte and Brooklyn Navy Yards, and saw that everyone is doing EX differently, according to what makes sense for them. At GE, they focused on designing the digital and physical space as well as the Culture, putting the employees at the center of what the company does. Paul has a small team with people from Technology, Analytics and data scientists.
  • Restructure under new business model – ABN Amro’s Head of EX, Frank van den Brink says EX and Digital HR are key to success in their 4 ‘Must Win Battles’. Frank and his team have used insights from EX and CX to do away with traditional HR and build a new operating model, based on what they designed for 5 Personas and their Employee Journey.

Final Thoughts

We initiated this study to create an objective view of Employee Experience and develop greater understanding of some critical building blocks as we saw an effort to re-brand and re-purpose other, older concepts e.g. Engagement and Employee Life Cycle or Employee Branding. EX is something different, driven by new generations, disruptive technology, and based on Design Thinking, where organizations are created around people, from the bottom up. It’s about ‘What works here’ vs. large models of ‘What works everywhere’. It’s bigger than HR or the HR Service Model while it completely reshapes HR and breaks down functional walls. 

EX is centered on greater face-to-face interaction. Its goal is to help organizations become more human. Simultaneously, EX is the foundation of a Digital People Strategy.

In the end, we can be customers and employees at the same time. We believe EX is an important step in a journey towards creating the Human Experience ‘HX’ where we seek to understand all people around an organization. 

Where to get more information

These are just a few short excerpts from our interviews and research. We invite you to join us in the coming weeks as we share more insights and details from our study, including an EX Playbook, and stories and lessons learned from EX Pioneers. Here is our schedule of upcoming events:

  • Listen to our presentation from Qualtrics’ Experience Week: Employee Experience: the Winning Company Playbook. Go to: www.experienceweek.com
  • Join our interactive workshops in New York, Zurich and Amsterdam, where we help you develop your own plan for an EX-Centric Organization (the link takes you to our EX/CX Resources page & workshop registration).
  • To receive our full EX Report, arrange a workshop or presentation in your company or to explore how we can help you design an EX-Centric Organization, email me at: elliott.nelson@kennedyfitch.com

Figure 3 – Infographic of Key figures from our Global EX Study

Elliott Nelson is a partner at KennedyFitch, a consulting and search firm building new ways of thinking and practices on the Future of Work. He coaches and advises leaders and organizations on Disruptive Transformations and building EX-Centric Organizations. He is a former head of Talent, Learning and Organization Development at Pfizer, AzkzoNobel, Novartis, Fujitsu-Siemens Computers and Compaq. 

Hannah Olvera Doman is a Research Assistant at KennedyFitch, specializing in studying how companies design and implement the Employee Experience. Hannah is working towards a Bachelors’ Degree in HR at Brigham Young University, where she is also a Board Member and writer for the Marriott Student Review, and leader in the local SHRM Chapter.

[1] “The Employee Experience Advantage: How to Win the War for Talent by Giving Employees the Workspace They Want, They Tools They Need and Culture They Can Celebrate”, Chapters 11 and 12, 2017. 



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Employee Engagement/Experience
2018 Will Be the Year of Employee Experience

Now that according to Gartner more than 90% of businesses compete primarily on the basis of customer experience (CX), it’s no longer enough to make CX a corporate priority.  The next competitive frontier is employee experience (EX) and the signs indicate so strongly that EX will become the next priority for organizations that I’m calling 2018 The Year of Employee Experience.

What Is Employee Experience?

Before I get into why EX will be the preeminent corporate priority this year, let me clarify what EX is.  Since CX is the sum of all interactions a customer has with a company, then:

EX is sum of everything an employee experiences throughout his or her connection to the organization — every employee interaction, from the first contact as a potential recruit to the last interaction after the end of employment.

Importantly, EX is not:

  • New and improved HR — While HR shapes some of the most critical interactions within EX (recruiting, on-boarding, performance reviews and planning), EX involves so much more — including interactions that are usually the domain of facilities, corporate communications, and IT.
  • Perks and parties — “Feel good” tactics such as free gym memberships and foos ball tables in the break room are simply that:   Your EX may end up including such tactics, but EX is a strategic initiative whose aim goes well beyond making employment more fun and enjoyable.  EX involves designing and delivering distinctive experiences for employees that are aligned with your desired culture.
  • Employer or employment branding — To compete in the war for talent, many companies try to develop a external reputation to help improve their recruiting efforts, but EX is about the day-to-day experiences an organization provides to existing employees.
  • Treating employees as customers — Although CX does provide a model for defining and understanding EX, a very different type of relationship and value proposition exists between employer and employee vs. brand and customer, so thinking about employees as customers is an incomplete approach.
  • Employee engagement — Employee engagement — that is, employees’ commitment to your company and their jobs — is the end goal while EX is the means to that end. Too many companies only pay attention to the results from annual employee engagement surveys and don’t proactively design and manage EX to produce better engagement.

Mark Levy, former head of Employee Experience at Airbnb, provided me with an apt description of how his company defines EX:  “Anything that sets employees up for success or improves our culture should be a part of EX.”

Why is Employee Experience Important?

Several workforce factors have raised the importance level of EX.  First, many businesses currently operate in sectors where a war for talent rages.  Whether it’s retail, high-tech, or jobs whose need for highly specialized skills is not matched by adequate compensation such as nursing and airline pilots, it’s getting harder for many employers to attract and retain talent.  Henry G. Jackson, CEO and president of the Society for Human Resource Management, says, “The skills shortage is an ever-present challenge.”  Offering a superior EX can give employers a competitive advantage in attracting recruits to them and then engaging them in ways that encourage them to stay with their organizations.

The popularity of websites including LinkedIn and Glassdoor make it much easier for prospective employees to assess the daily EX at a company they’re considering.  No longer can companies hide behind employer branding campaigns or rely on skillful recruiters to position themselves among recruits.  In fact, a sense of consumerism now pervades the recruiting process.  Just as customers pick and choose from a plethora of brands based on reviews they access digitally, many people seem to use online resources to “shop” among potential employers — and decide to proceed with those companies that offer the kind of EX they’re looking for.

Also a new social contract between employee and employer is emerging, says a report by Deloitte.   The stability that once characterized the best employee-employer relationships is being disrupted by employees’ tendency to change jobs more frequently and other factors. Therefore, “employers must provide development more quickly, move people more regularly, provide continuous cycles of promotion, and give employees more tools to manage their own careers,” the report concludes. Your efforts, they say, must be oriented around the different needs and expectations that today’s employees have.  Adopting EX as a strategic priority enables you to do just that.

What Results Does Employee Experience Produce?

If you prioritize EX, you’ll be one of a growing number of companies discovering the power of EX to positively impact business performance in many areas. Research by Jacob Morgan, author of The Employee Experience Advantage, shows that organizations that invested most heavily in EX were:

  • included 11.5 times as often in Glassdoor’s Best Places to Work
  • listed 4.4 times as often in LinkedIn’s list of North America’s Most In-Demand Employers
  • 28 times more often listed among Fast Company’s Most Innovative Companies
  • listed 2.1 times as often on the Forbes list of the World’s Most Innovative Companies
  • twice as often found in the American Customer Satisfaction Index

Most importantly, he finds that “experiential organizations had more than 4 times the average profit and more than 2 times the average revenue.  They were also almost 25 percent smaller, which suggests higher levels of productivity and innovation.”

2018 The Year of Employee Experience

I’m excited and encouraged by the focus that is now being put on EX — and I plan to report throughout 2018 on companies that are using EX to increase not only employee satisfaction, productivity, and retention, but also brand equity, competitive advantage, and sustainable growth.  If your organization has adopted EX as a strategic priority, let me know using the Comments section below.