Cause-and-effect relationships are helpful when it comes to understanding relationships in a company and getting a grip on complexity with the help of key influencing factors. With all the variety that can be there; an “axis” is stable: A compelling place to work (employee focus) – a compelling place to shop (customer focus) – a compelling place to invest (owner focus).

This “axis” is essentially based on extensive data analyzes by Nick Bontis and Jac Fitz-Enz, as well as studies by Mark A. Huselid, Brian E. Becker, Richard W. Beatty and J. + P. Phillips. Volker Jacobs et al also contributed significantly to this “axis”. Let’s get in!

Employee focus – Employee Experience (EX)

Employee Experience (EX) is derived from Customer Experience Management (CXM), with which positive customer experiences and an emotional bond between users and providers or their products are to be achieved. Accordingly, EX stands for the sum of all experiences that an employee has in the course of his employee life cycle in a company. And the employer, especially the HR function, can actively shape this employee experience.
HR managers are therefore required to put themselves in the employee’s position again and again in order to understand how they experience their work environment and then to develop the appropriate tools to improve EX.

EX comprises three working environments resp. dimensions:

  • Physical-organizational dimension: The location, the premises and the design of the offices as well as the work processes determine the EX to a large extent.
  • The cultural dimension aims at leadership and communication behavior, salaries and benefits as well as opportunities for further development. What is the management style in the company? What about the appreciation for the employees? And how are interaction and communication stored in the company?
  • The technical-digital dimension is primarily about the technical equipment in the workplace: hardware, software and working methods. How does the infrastructure work – also in the home office? This dimension has become much more important as a result of the pandemic.

Employers encourage a positive EX with an open feedback culture in which employees can express themselves freely. Management has to exemplify this culture.

The following is important for the relation of EX to employee engagement:

  • Increasing engagement improves labor productivity (discretion), retention (intention to stay) and attractiveness. Engagement accounts for 55 percent of EX’s total business value.
  • EX creates more effortless experiences for managers and employees. Ease is created by simplifying the performance management process for managers and reducing the complexity of internal services. Giving time back to managers and employees increases work productivity. Time savings and risk reduction (cloud-based IT systems, etc.) reduce (technology-)costs. Ease is 45 percent of EX’s total business value.

The following is important for the relation of EX and Employee Engagement to CX: EX is the result of both emotionally charged events (so-called “moments that are important” or “moments of truth”) and the everyday exchange between employees and the organization. If the positive experiences in this regard extend through the entire employee life cycle, this in turn will increase the employees’ identification with the company. In short: employee loyalty increases and with it the employee’s commitment and performance. In this context, one speaks of the four levers for a holistic EX: clear philosophy, supportive culture, articulated accountability and measurements based on it.

This entails – I leave employer branding out of the picture for a moment – that customers have better experiences with the company, shop there more often and recommend it to others. So the “axis” is EX – Employee Engagement – CX.

Customer focus – Customer Experience (CX)

In a previous post, I focused on the importance of CX in the insurance industry. Three options are currently being discussed there: Insurers can act as suppliers for insurance protection in an ecosystem or – much more complex – build and operate an ecosystem themselves. Depending on the product range and strategy, they can also act as providers in some areas and as suppliers in others (mixed form). Every insurer has to find its role here!
There is an interesting parallel with a view of the living environment in recruiting, where consideration of the worlds of life of applicants is also very important!

A cross-departmental / cross-divisional and strategy-oriented CXM means:

  • Define your current target groups (customer segmentation).
  • Create a few personas for each target group in order to view their product range and customer processes from the perspective of a (fictitious) customer.
  • Analyze possible requirements and needs in the various stages and phases of life of the personas.
  • Think in terms of ecosystems, not company boundaries.

In my opinion, this is the only chance to open up new growth areas and target groups in a largely saturated market. To do this, insurers have to be dynamic and creative – even if it wasn’t in their DNA so far. This is the only way they can react quickly to changes and work constructively on products and processes. This succeeds in a corporate culture that is characterized by a high degree of transparency, trust, willingness to innovate and participation. The guiding principle is cooperation instead of control and the opportunity to try out new things and new ways of working – knowing that not everything immediately brings the desired success. In many cases, this means a fundamental change in attitude, structures and processes.

Owner focus – Stakeholder Experience (SX)

The focus on the “experience” is not limited to employees and customers. Quite a few companies are already thinking about how each stakeholder – employee, future employee, customer, supplier, and partner – experiences the brand across multiple channels. To ensure that the focus is on the entire company, executives need to make SX the central agenda of every employee. This creates a culture of caring, listening, and solving problems that arise.

The report on the digital trends 2020 from Adobe comes to the following conclusions:

  • The leading CX companies are almost five times more likely to have a highly integrated, cloud-based technology stack than others.
  • Additionally, companies with a unified technology stack were 131 percent more likely to have significantly exceeded their top 2018 business goals.

Research by TI people has shown that EX can save managers an average of 8.7 hours and employees an average of 7.7 hours per month! That’s a total of 100 hours per person and year! The average full costs per employee in all industries are € 26.60 per hour and € 58.40 per manager. Assuming an average control range for all countries according to the OECD of 1:10, the average company with 20,000 employees has the potential to save around € 59 million per year with EX.

Employee- and customer-oriented processes and business efficiency are therefore not a contradiction in terms. Customer orientation means aligning processes as much as possible with the needs of the customer and improving the customer experience. Continuous customer journey analysis and optimization is the method of choice to gain clarity about the processes from the customer’s perspective. However, this goal does not have to contradict the equally necessary improvement in process efficiency; provided the customer benefits from more efficiency through faster, simpler and automated processes.

Excursus: data, data, data

I will stick to the insurance industry in my remarks. Data management has always been the core of the business model there. So far, however, people have mainly looked in the rearview mirror (reference to the past). New AI-based processes now also enable a look ahead: Economic Value of CXM, Customer Lifetime Value (CLV), value-added target group segmentation, integration of environmental data and data from cooperation partners for better customer understanding and more individual offers.

For this purpose, insurers have to redesign their customer processes and interaction options, but also their product and service offerings. Far-reaching changes in the areas of strategy, culture, organization, processes and IT are necessary for this.
Dirk Gronert, Public Insurance Braunschweig, recently summed it up as follows: It used to take us twelve to 18 months to develop an average product. Thanks to our agile approach, we recently developed products in eight to twelve weeks. ”

Conclusion

Satisfied and engaged employees create better experiences, which leads to happier and more loyal customers and ultimately to brand and company growth. Market leaders recognize that a thoughtful and deliberate focus on EX is not only good for their workforce, but also for their company.

In a culture that is characterized by a high degree of transparency, trust, willingness to innovate and participation, employees in the CXM will have the opportunity to more control and shape their work themselves. Sector and departmental silos are increasingly being replaced in such an environment by interdisciplinary, cross-departmental and situational cooperation. Different skills are bundled in cross-functional teams. Classic professional qualifications and traditional employment histories take a back seat; A high willingness to learn and change will become more important for development paths within the CXM. In customer contact, social-communicative and personal skills become crucial employee competencies. When it comes to technical questions, employees in sales and CXM are increasingly supported by intelligent IT systems (e.g. CRM / sales systems with next-best-action suggestions, chatbots, etc.) so that they can concentrate more on the customer relationship and customer needs.

A CRM (Customer Relationship Management) platform is essential to address the challenge of fragmentation and inconsistency in experience management. Although most companies nowadays use some form of CRM (e.g. in recruiting and onboarding, self service, EX and CX), these tools are rarely used beyond marketing and sales functions. SX has so far been mostly reactive, in the future SX will proceed more proactively, identifying and addressing problems before they are recognized. As a result, sales and customer loyalty can be increased and costs can be reduced.