Driving Performance Through Employee Experience: A Strategic Imperative

Companies today increasingly face the strategic imperative of driving performance by transforming the employee experience to create a more employee-centered culture. The correlation between employee experience, corporate culture, and performance is undeniably strong, shaping the trajectory of companies across various industries. Companies that find themselves misaligned on this question often find themselves at a disadvantage with regard to talent and the achievement of strategic objectives.

Where does this focus on the employee experience come from?

For one, the evolving demographic landscape, characterized by a multigenerational workforce and shifting preferences, has shone a light on both the challenges and opportunities for organizations aiming to optimize employee experience. Why? Because employees don't all want the same thing in their work and careers? Younger generations entering the workforce seek purpose-driven roles, career development opportunities, and a sense of community, while older employees value stability, recognition, and work-life balance. With five generations in the workplace simultaneously, companies are buffeted by diverse demands. Leaders are looking to understand and cater to these diverse needs, so they can tailor their employee experience initiatives for maximum impact.

What does this multigenerational workforce challenge look like?

Well, according to Mercer's Global Talent Trends publications, there is a noticeable trend of people working longer in their careers due to various factors such as increased life expectancy, changing retirement norms, and economic considerations. Likewise younger generations are leaping from one company to the next and are eager to develop their skills in project-based work, or even contingent work arrangements. More evidently, they also enjoy, and now fully expect, the benefits of hybrid work arrangements and remote-work experiences. So, this shift in workforce dynamics necessitates a reevaluation of how organizations approach career development and progression for employees at different stages of their professional lives.

Let's delve into how prioritizing employee experience not only enhances workplace culture but also propels organizational success.

The Employee Experience-Corporate Culture-Performance Nexus

Employee Experience as a Cornerstone

Employee experience encapsulates the entire journey of an individual within an organization – from recruitment to exit. A positive employee experience fosters a sense of belonging, engagement, and alignment with the company's values and goals. This, in turn, cultivates a thriving corporate culture characterized by collaboration, innovation, and resilience.

One of my favorite books in this space is Peter Navin & David Creelman's The CMO of People: Manage Employees like Customers.

The authors make a compelling case that we have entered an era in which due to technological change and the transformation of the customer experience on the internet, employees expect a similarly seamless experience as they search for jobs and develop their careers. Every touch point must contribute to a world class experience. Thus the authors suggest that successful leaders will frame HR much like a marketing function --- where the goal is to attract, develop, and retain employees to get the most value from talent. They dive even more deeply into this notion by arguing that successful companies will create a predictable experience for candidates and employees at every step. This means that HR systems and processes must be as powerful and as error-free for candidates and employees as they are for customers in their direct-to-consumer experiences. Many executives have explained this to me as the "consumerization of technology" within the enterprise and it puts a great strain on technology budgets, teams, and processes as rising expectations outpace the organization's abilities to develop and deploy next practices and emerging platforms. And this means that qualitatively, companies must embrace Consistency in their processes while ensuring that employees receive equitable and systematic treatment and communication throughout their journey within the organization.

The authors go even further, arguing that if done right, this experience will be an Immersive Experience that engages the employee actively in the decision making process and resonates with them at every touchpoint. Think of the customer experience at Disneyland, and you will get a sense of what the authors mean. At every interaction the candidate/employee will feel empowered to make decisions, will have all the information at their disposal, and will move through the stages efficiently and effectively.

This can only be done, the authors point out, if the company leadership has put in place

clear expectations for the employee experience. They need to establish clear expectations for candidates at every step of the attraction, interview, hire and onboarding stages. And for employees they must create clarity regarding their roles, responsibilities, and growth opportunities.

But to be sustainable this approach demands that leaders also bake feedback mechanisms into their talent interaction model across the lifecycle. By implementing effective feedback mechanisms at every touchpoint companies can better understand employee needs and concerns, and foster a culture of open communication. This of course then equips the leadership team to embrace continuous improvement striving for creativity and innovation in the employee experience to keep pace with the changing needs of an evolving workforce.

Finally the authors say this may mean that HR must be structured differently. The author reinforce here the transformation in HR that has been evolving for the past thirty years, as organization after organization has pivoted from transactional HR structures and processes toward a more strategic HR operating model in alignment with Dave Ulrich's recommendations (See illustration from Forbes below left).

Navin and Creelman then take it one step further by urging companies to find unconventional people to staff the new model. I've seen companies do this by explicitly hiring sales leaders into the talent acquisition and recruiting leadership roles. Companies like Northrop Grumman in the defense industry have succeeded with this approach. And other companies have pulled healthcare and insurance leaders into their benefits leadership roles while still others, like Amazon, have recruited business unit leaders or country GMs to head up the leadership development of their senior leadership teams.

It's an explicit recognition of the need for strategic business skills in the HR suite of processes and services. And it's increasingly driven by the realization that if we manage employees with the same care and attention as customers, implement customer-centric strategies in employee management, recognize the value of employees and emphasize the importance of creating a compelling employee experience, we will achieve better engagement, individual and team performance, improved business outcomes, and generally greater sustainable organizational success.

But employee experience is a crucial aspect of organizational success that goes beyond just the basic interactions between an employee and their workplace. It encompasses every touchpoint and interaction that an individual has during their time with the company, starting from the very first contact during recruitment and continuing through their entire journey within the organization until the moment they leave. A compelling employee experience creates a work environment where employees feel valued, motivated, and engaged. It involves providing opportunities for growth and development, recognizing and rewarding achievements, and fostering a culture of inclusivity and support.

When employees have a positive experience at work, they are more likely to be productive, innovative, and committed to the company's mission and values. Moreover, a strong employee experience contributes to the overall success of the organization by creating a sense of belonging and community among employees. It helps in building a cohesive team that collaborates effectively, shares knowledge and resources, and works towards common goals. This, in turn, leads to a thriving corporate culture that is characterized by creativity, resilience, and a drive for continuous improvement. In essence, investing in employee experience is not only beneficial for individual employees but also for the organization as a whole. By prioritizing the well-being and satisfaction of employees, companies can create a workplace culture that attracts top talent, retains valuable employees, and drives long-term success.

So let's take a brief look at culture, a concept that is as confusing as it is ubiquitous.

Corporate Culture's Impact on Performance

Corporate culture acts as the compass guiding how employees interact, make decisions, and navigate challenges. When aligned with a positive employee experience, a strong corporate culture can drive organizational performance by enhancing productivity, creativity, and employee morale. Companies with a robust culture tend to outperform their competitors and adapt more effectively to market changes.

So, think of corporate culture as the underlying fabric that shapes the behavior and mindset of employees within an organization. It goes beyond just policies and procedures; it embodies the values, beliefs, and norms that define how work is done and how people interact with one another. When values, beliefs and norms align with behaviors across the company, it fosters a sense of belonging and purpose among employees, leading to higher engagement and motivation.

Additionally, when employees feel connected to the company's culture and values, they are more likely to be committed to their work and strive for excellence. They are much more likely to deliver "discretionary effort", which goes above and beyond delivering on their role requirements or job description. The Corporate Executive Board has identified this as the shift from "individual contributor" to "enterprise contributor" (see below). And it's a shift that separates those companies that can at best grow incrementally from those that achieve breakthrough performance in the new world of work.

Therefore, this alignment between individual and organizational values creates a harmonious work environment where employees are empowered to contribute their best efforts and ideas. They contribute different capabilities to their roles, and they bring a decidedly different mindset to their work. They contribute and use improved working methods, they introduce and adopt improved processes, they transfer great ideas to other parts of the business and seek great ideas from the same, and they offer high quality inputs for their coworkers while proactively seeking and using such high quality resources from coworkers. In other words, they are powerful contributors to the network of talent and great adopters of skills from that talent network internally.

As a result, productivity levels soar, innovation flourishes, and employee morale remains high even in the face of challenges.

Moreover, a strong corporate culture acts as a unifying force that brings diverse teams together towards a common goal. It instills a sense of identity and shared mission among employees, fostering collaboration and teamwork. This cohesion not only improves communication and decision-making processes but also enables the organization to respond swiftly and effectively to dynamic market conditions.

Ultimately, companies that prioritize and nurture their corporate culture gain a competitive edge in the marketplace. They attract top talent who are drawn to the organization's values and vision, leading to a more skilled and motivated workforce. By investing in their culture, companies can create a sustainable advantage that propels them ahead of competitors and ensures long-term success.

What's interesting about all of this to me is that a compelling employee experience comes first. And culture emerges from that compelling experience. So if leaders focus on culture alone, it feels very top-down in nature, while focusing first on the employee experience allows culture to emerge from the values and beliefs that shape the employee experience with the company from attraction to off-boarding. Culture then will be an organic development stemming from what the company really is, and who the senior leaders truly are. And much like our trips to the grocery store, when it comes to culture, much like our food, we prefer organic over processed, every time.

To prove the value of this effort, of course, we need to measure what matters. So let's pivot toward the sort of metrics that might be helpful.

Performance Metrics Linking Employee Experience and Organizational Success

Measuring the impact of employee experience on performance involves tracking key metrics such as employee engagement levels, retention rates, productivity, and customer satisfaction scores. Organizations that prioritize employee experience initiatives often witness significant improvements in these metrics, translating into

tangible business outcomes.

Measuring the impact of employee experience on performance is a crucial aspect of organizational success. By tracking key metrics such as employee engagement levels, retention rates, productivity, and customer satisfaction scores, companies can gain valuable insights into the overall health of their workforce. Employee engagement, for instance, is a key indicator of how invested employees are in their work and the organization as a whole. High levels of engagement often result in increased productivity, creativity, and overall job satisfaction. For instance, studies show that high levels of employee engagement lead to increased productivity, creativity, and job satisfaction. Organizations with engaged employees experience a 21% increase in profitability (Gallup).

Retention rates are another important metric to consider when evaluating the impact of employee experience. A high turnover rate can be a red flag indicating underlying issues within the organization, such as poor leadership, lack of growth opportunities, or a toxic work environment. On the other hand, a low turnover rate suggests that employees are satisfied with their roles and feel valued by the company. In fact, research suggests that a 10% increase in employee retention can result in a 30% increase in company profitability (Bersin).

Productivity is a direct result of employee experience, as engaged and satisfied employees are more likely to perform at their best. When employees feel supported, empowered, and recognized for their contributions, they are motivated to excel in their roles and drive business success. This, in turn, can lead to increased efficiency, higher quality output, and ultimately, improved financial performance for the organization. The Harvard Business Review has shown that engaged employees are 17% more productive than their disengaged counterparts (Harvard Business Review).

Furthermore, customer satisfaction scores can also be influenced by employee experience. Employees who are happy and engaged are more likely to deliver exceptional customer service, leading to higher levels of customer satisfaction and loyalty. Customers can sense when employees are passionate about their work and genuinely care about providing a positive experience, which can have a significant impact on the company's reputation and bottom line. In conclusion, organizations that prioritize employee experience initiatives are likely to see a positive impact on key performance metrics. By investing in creating a supportive, engaging, and fulfilling work environment, companies can foster a culture of excellence that drives success across all levels of the organization. Companies with engaged employees outperform those without by 10% in customer ratings (Temkin Group). Employee satisfaction correlates with higher levels of customer satisfaction and loyalty.

So, we've made the case for investing in employee experience initiatives. We know from the research that it can lead to improved financial performance, higher efficiency, and enhanced customer service, ultimately driving success across the organization. But what does this effort actually look like in the wild? Let's take a look at a few companies leading the way.

Case Studies: Exemplary Employee Experience Initiatives

Google's Innovative Approach

Google, renowned for its exceptional workplace culture, has set a benchmark for employee experience initiatives. From flexible work arrangements to unique perks like on-site wellness programs and gourmet meals, Google invests in creating an environment where employees feel valued, motivated, and inspired. This focus on employee well-being has translated into sustained innovation and high employee satisfaction levels. But senior leadership at Google did not stop at what could easily be dismissed as workplace amenities. They dived deeply into work processes to craft a more compelling experience.

Laszlo Bok's book, Work Rules!: Insights from Inside Goole that will transform how you live and work, provides further insights into how Google's people team transformed the rules of work. By emphasizing transparency, trust, and empowerment, Google has fostered a culture where employees are encouraged to bring their whole selves to work, leading to increased engagement and productivity. Through initiatives such as peer feedback systems, data-driven decision-making, and continuous learning opportunities, Google has created an environment that values employee growth and development, while clearing the way for employees at all levels to contribute to their team's and the company's success.

Airbnb's Commitment to Diversity and Inclusion

Airbnb's commitment to diversity and inclusion is at the core of its employee experience strategy. By fostering a culture of belonging and equity, Airbnb has created a workplace where employees from diverse backgrounds can thrive and contribute meaningfully. This inclusive approach has not only enhanced employee engagement but has also driven business performance through a breadth of perspectives and ideas.

• Establishing diversity and inclusion goals and metrics to track progress.

• Implementing unconscious bias training for employees involved in hiring processes.

• Partnering with diverse recruitment agencies and organizations to attract a more varied talent pool.

• Creating employee resource groups to support underrepresented communities within the company.

• Offering mentorship programs to help employees from diverse backgrounds advance in their careers.

• Developing inclusive policies and benefits to support employees of all backgrounds.

• Regularly reviewing and updating practices to ensure they are inclusive and equitable.

Microsoft's shift to VR Attraction and Recruitment

Microsoft, the iconic software company, has implemented innovative strategies and new technologies to enhance the job candidate experience. So their focus has landed on the front side of the employee lifecycle.

Firstly, they deploy interactive recruitment events. For a generation of digital natives, this approach aligns tightly with their experience in school, and suits their taste for dynamic, digitally-mediated interactions. In these virtual events, The candidates can engage with current employees, learn about the company culture, and participate in interactive activities.

Such interactive recruitment events are followed up with virtual reality (VR) Interviews. Using VR technology to conduct interviews, the company allows candidates to showcase their skills in a more immersive and interactive way. And like many companies, they've begun using AI-powered resume screening. This approach has streamlined the resume screening process, ensuring a more efficient and unbiased selection of candidates.

Additionally, Microsoft now delivers personalized candidate feedback. Eschewing the typical canned responses sent to most candidates, the recruiting team at MSFT develops personalized feedback to candidates post-interview, offering insights into their performance and areas for improvement. I think we can all agree this is a much better approach than the boilerplate "Thank you for taking the time to apply and we are so honored by your interest in our company..." messages that seem to abound these days.

Toward a more compelling employee experience

In conclusion, the intricate interplay between employee experience, corporate culture, and performance underscores the pivotal role that employee centricity plays in driving organizational success. By prioritizing initiatives that enhance the employee journey, foster a positive culture, and embrace demographic shifts, companies can unlock the full potential of their workforce and achieve sustainable growth.

So let's empower our employees, nurture our culture intentionally, and elevate our performance.