Presented by Graham Williams and Michael Cusack of Centre-ing Services
Thanks to CRMXchange.com
Business Is Being Conducted Differently
Exploding technological advances and an inexorable gravitation towards what Bill Gates calls the “web lifestyle” and “digital nervous systems” have heralded different ways in which businesses do business, and even how they see their present and their future.
A core aspect of this revolutionary development has been for leading businesses to seek competitive edge in faster and better interactions between the company and the customer. And Customer Relationship Management (CRM) has sought to provide solution and opportunity-by connecting and synthesising back-end data and information with front-end telephony, computer and e-commerce applications and channels-particularly in, but not limited to, the call center environment.
In tandem with new business dynamics, employer/employee relationships are also changing dramatically. The new ways in which we relate to each other, communicate, transfer information, view authority, innovate, add value, perform, and measure our performance in the workplace-are all outcomes of this business revolution. Communications technology has and continues to facilitate the spread, not only of information and knowledge, but also of wider horizons, values and aspirations.
Organizations and individuals are being seriously challenged by these rapid changes. They are experiencing higher stress levels, choosier customers, more demanding shareholders, increasing diversity, more (and different) competition, a discernible shift away from “command and control” cultures, new communication channel challenges, and greater pressure to deliver more with less. Organizations tend to be leaner and more people work independently-sometimes feeling isolated and as if they live in a work-world devoid of meaningful human interaction, often as outsourced specialists on contract. Indeed, many who were previously corporate employees, and an equal number who remain in the corporate environment, have felt marginalized as a result of continual downsizing, restructuring, reengineering
But an emerging trend among those who now operate more independently, whether forced to go it alone or choosing to do so, is that they are finding increasing opportunity, power, freedom and satisfaction outside of traditional corporate structures. (A related trend is that those employees who remain within the structures are more prepared to take risks, and change jobs and career paths more frequently. They demand greater autonomy, opportunity and democracy in the corporate workplace). A new social contract between organisations and their employees, based on their employability can now be found in many organisations. Performance is no longer managed through compliance and conformance, which, at best, achieves a work-to-rule situation.
Rather, excellent performance is the result of voluntary and spontaneous contribution. Loyalty is no longer synonymous with long service, but comes about because employees want to work with organisations because they see them through rose-tinted spectacles. Although less “connected” than before, they value attachment to the organisation and to what it’s doing in the midst of a fluid, shifting, uncertain society. They enjoy being a part of fast-paced change and an avalanche of new learning in the digital workplace.
But here’s the rub: The stampede to install CRM is NOT being matched by a parallel stampede to install faster and better Employee Relationship Management (ERM)-faster, more frequent and better interactions and relationships between company and employee. Companies becoming more and more engaged with state-of-the-art e-commerce applications are, in many cases, becoming less engaged with caring for their staff. Instead of finding new ways of gaining a greater share of the employee, many organisations continue to put up with high turnover levels and high induction, training and development costs, low moral, and sub-optimum employee performance. They have not reinvented their employee relationship thinking and practices.
A Comprehensive ERM System Is A Good Way Forward We propose the adoption of an ERM “system.” A system that balances and aligns staff, process and technology. A loyalty building system that follows a natural progression — from employee satisfaction through to employee advocacy.
a.. Employee satisfaction happens when employees experience and positively perceive that the organization practizes sound behaviors aimed at simplifying their jobs, creating a favorable motivational environment, and providing equal opportunities for learning and self-development-in positive and convenient ways. They are enticed and engaged.
b.. Continuously improving levels of satisfaction is the platform on which it becomes possible to build employee preference, becoming the “employer of first choice.” A balance is struck between hi-tech and hi-touch. Employee commitment and ownership of the organisation’s vision is obtained.
c.. Loyalty to the organisation: employee relationship loyalty happens when the practices reach critical mass, are internalized and fully practized by all-managers and employees, when employees can be mobilized and committed to stretch goals via partnering and co-leadership. d.. And advocacy is the growth of sustained loyalty into a situation where loyalty is spontaneously “locked in” and employees voluntarily align with the organisations’ values and aims to the extent that they proactively sign up new high-value employees and leaders for the organisation. Ensuring the organisations’ future “blood line.”
Building The ERM Castle
In order for the loyalty progression to develop over time, a system must be built that is founded on a number of key principles. These principles, or components of our ‘holistic’ system, form the acronym CASTLE.
The elements of the model, to be described in subsequent articles, are:
a.. Culture. Embedding a culture of leadership, recognising that leadership is not only vested in top management but throughout the organisation, and also that new leadership competencies are required for the new millennium. A culture of service is another prerequisite. Sound internal service is what spurs sound external service
b.. Alignment. Faced with any major endeavor, organizational leadership is tasked with the challenge of aligning the different parts of the “organizational operating system.” Alignment is about getting the key components in a system or situation “lined up” supportively in order to achieve a desired result.
c.. Seaman’s credo. “Ready, willing and able, Sir!” was the old Royal Navy expectation. It’s also the basis of the Ritz-Carlton Hotel Group’s success. It means, in short, that results are a function of availability, motivation and competence.
d.. Technology that enables. Capturing, storing and accessing sound backend data about employees, good communication and information-transfer technology, and easy to use front-ends on the employees’ office desk and home desk consoles. There is no doubt that the application of technology and software as will be described can greatly assist with improved employee relationships. A key principle is self service, that is, employees serve themselves and at the same time take the pressure off HR administration burdens.
e.. Ladders. Differentiated development and relationships are applied according to the individual employee’s choice of advancement “ladder”-the promotion/hierarchy ladder, the specialist “broad-banding” ladder or the personal growth and enrichment ladder.
f.. Exchange economics. Value and wealth (both material and intangible) are created through perceived fair, win-win exchanges between two parties (but which carry benefit for all involved along the “production of value” line), and that various exchange types satisfy the whole person: physical, intellectual, social, emotional and spiritual. Clearly the exchange between employee and employer consists of much more than simply payment for work performed. In the new world of work, we need to think far beyond such a narrow boundary.
The stampede to install CRM is NOT being matched by a parallel stampede to install faster and better Employee Relationship Management (ERM)-faster, more frequent and better interactions and relationships between company and employee. Companies becoming more and more engaged with state-of-the-art e-commerce applications are, in many cases, becoming less engaged with caring for their staff. Instead of finding new ways of gaining a greater share of the employee, many organizations continue to put up with high turnover levels and high induction, training and development costs, low moral, and sub-optimum employee performance. They have not reinvented their employee relationship thinking and practices.
In order for the loyalty progression to develop over time, a system must be built that is founded on a number of key principles. These principles, or components of our ‘holistic’ system, form the acronym CASTLE.
The elements of the model are:
a.. Culture.
b.. Alignment.
c.. Seaman’s credo.
d.. Technology that enables.
e.. Ladders.
f.. Exchange economics.
Here is what we mean, and what they mean to you.
Culture
A culture of leadership throughout the organization is a prerequisite for tapping everyone’s creative abilities and ensuring that the organization responds deftly and appropriately wherever it is ‘touched.’ This leadership, no longer the prerogative of the top person or a chosen few, is practiced at all levels and requires the development of a new millennium competency set:
a.. ‘Head’ competencies embrace thinking, understanding, knowledge, vision, values, transitioning, revolutionising.
b.. ‘Heart’ competencies cover relationships, partnerships, intuition, motivation, harnessing diversity.
c.. ‘Hands’ competencies are those to do with achieving, innovative work practices and task execution, ‘growing’ others, getting results.
Also required as a system cornerstone is a culture of world class external customer service delivery. In short, fed by good processes and technology within the right operating climate, empowered employees, who feel served themselves, will create enhanced moments of truth with external customers. This culture of service is developed in a number of ways, including:
a.. Instilling customer service profit chain logic. Essentially: profit results from service excellence which results from employees both competent and motivated to perform exceptionally well, supported by appropriate internal business processes and technology.
b.. Establishing internal service contracts between individuals and between departments.
c.. Changing the politics that have traditionally shaped organizational life. Old power sources are replaced by new dynamics of sharing, providing access, providing personal-power opportunities-consider knowledge-power, but also positional-power (making decisions), resource control power, technology, networks. Instead the new politics are about internal responsiveness, assurance, reliability, doing the best for the other.
d.. Designing a coherent view of the employee
Not long past, organizations had multiple views of their customers-for example, the Sales view was conditioned by sales volume, the Finance view by credit reliability and payment history, the Service Agent view determined by the nature and perceived quality of interactions. In the same way, the same employee was viewed in multiple ways – by his/her direct line report, the customer, peers, and the Human Resource Department. Perhaps this is why 360° employee assessments are gaining popularity. We believe that a coherent and measurable view of each employee’s value is a function how important the employee is to the organization and how satisfied the employee is with the organization. We advocate the use of an employee service index:
V = f [ Importance (Performance and potential) + Satisfaction (Task and relationship) ]
The ‘importance’ aspect of this metric gives a reading of performance delivery, and allows for appropriate recognition and reward (say when results are allied to recorded demonstrated competence), and also allows for better resourcing of project teams, promotion and placement decisions (although ‘potential’ is not only about the hierarchical level to which an employee may climb, but also about the ‘value reservoir’ that the employee represents. One way of expressing this is calculating the lifetime value of the employee to the organization-in either a specialist or generalist capacity).
The ‘satisfaction’ side of the equation gives a reading of how the employee perceives the organizations’ employment policies, the boss-subordinate relationship, the challenges and growth opportunities received, the motivational climate. It can tell you when there is a need for attention, coaching, counselling.
The composite index, Importance plus Satisfaction, enables you to focus preventative or development action. For example, high importance and low satisfaction may well indicate a turnover threat. When we serve our employees we serve ourselves and serve our external customers.
Alignment
Faced with any major endeavour, organizational leadership is tasked with the challenge of aligning the different parts of the ‘organizational operating system’:
Alignment is about getting the key components in a system or situation ‘lined up’ supportively in order to achieve a desired result. Consider the simple example of a golfer making an important putt. The key components in this situation are the environment, the stakeholders and the internal elements that need to come into play:
a.. Environment-includes the state and slope of the green, the wind factor, the water table, the match situation and the overall context of this particular putt.
b.. Internal Elements-includes the choice of equipment, the golfer’s competencies (visualising a successful putt, eye: hand co-ordination, ability to accurately gauge direction and strength, self-confidence, motivation).
c.. Stakeholders-includes the role of the caddy, the mood of the spectators, the importance of the match to the golfer’s team, and the golfer.
These components all impact on each other and have to be aligned for success. Wrong alignment results in a missed putt.
In organizations facing challenges and change, the key components to take into account in order to achieve the desired outcome are the same:
a.. Environment-includes aspects of the societal culture which needs to accommodate and adapt to the challenge.
b.. Internal Elements-includes vision, values, capacity (competencies, processes, technology and motivational environment), behaviour, and measurement tools.
c.. Stakeholders-includes customers, shareholders, the affected internal departments, teams, and members. Again, these components all impact on each other and have to be aligned for success. Misalignment results in failure. The model looks like this:
Misalignment results in lack of clarity, misunderstandings, a ‘silo mentality’ held by individual departments, friction and disagreement between departments, internal dissatisfaction and disenchanted customers.
Each element must be aligned with every other element. It is unrealistic and unfair for example, to expect employees to be able to make the jump from vision to achieved outcomes without the intermediate steps.
By dealing with each element effectively, you are able to keep alignment-for example outcomes serve the vision, behaviours are driven by capacities and by values. When management and staff understand the chain of logic in the framework, incongruencies can be quickly dealt with. If any element is ineffective or left out of the framework, then uncertainty and confusion is likely. If capacity is not present, you cannot expect people to behave effectively and take the right actions. If direction and vision are absent, people do not know where they are going. If the values component is absent, then people will be unsure of how to behave. There will also be conflict between what they feel, their cultural conditioning, and what they are expected to do. If outcomes are not measured and rewarded, then people will not have feedback on how they’re doing, nor will they be encouraged to continue acting and behaving in the right way, and so on.
The internal alignment framework is thus a ‘self-regulating’, and internally consistent, guiding mechanism.
Seamans’ Credo
The British Royal Navy’s inculcated standard seaman’s response to an order has always been “Ready, willing and able, Sir!” To elicit this response from an employee in the workplace naturally requires a different and non-military approach, but this becomes the norm when organizations do things like:
a.. Creating of a climate for self-directed learning, for the sharing and building of knowledge, learning and insight-encourages employees to make themselves more ready, willing and able. This can be facilitated by technology and by the institutionalisation of a coaching culture. Getting people up to speed faster and more adequately is cost efficient and performance-effective.
b.. Making jobs (especially the routine aspects) easier for encumbents-who can then focus more on value-adding activities.
c.. Imparting coping skills and building change-resilience in the new world of fast-changing work environments.
d.. Allowing those with the highest competency levels and results achievement to share their ‘secrets’ and best practices with others, and in so doing reinforcing their own self-worth.
The point is that results are a function of competence and motivation. Therefore, better communication, better transfer of useful information, providing new learning opportunities, making jobs easier-all contribute to broader horizons, raised morale and superior performance-an integral part of any Employee Relationship Management model. In the third and final article in this series, the elements of technology, ‘ladders’ and exchange economics are addressed.
Technology That Enables
The Employee Relationship Management structure must consider all interactions between the employee and the organization. In terms of enabling technology and systems, this means capturing, storing and accessing sound backend data about employees, good communication and information-transfer technology, and easy to use front-ends on the employees’ office desk and home desk consoles. Some of the employee relationship aims of this technology are:
a.. Reducing paper. We are a long way from the paperless office, but a less-paper office is quite feasible. Forms (leave applications, loan requests, employee record changes), company news, performance information, events, policy and operating manuals, combined telephone/fax/cell-phone/email contact directories, business process execution information, business results, and a host of other applications, can be cheaply and efficiently accommodated using electronic means-in essence, providing an internal self-service facility on the web or intranet (and perhaps this facility is supported by a telephone/ email/ fax-based internal service desk).
b.. Democratisation-in the form of easier and freer communication across flatter organizations. Using open internal polls to garner employee opinions and as a facilitator of the consultative process. Managing aspects of virtual teamwork. Installing employee self-service software which is now starting to appear in the marketplace, which allows employees (for example) to maintain their own personal data, select their own benefit package options, research their own training and development options, access for themselves information in the medical, investment and other work and life decision-making and development areas. Conducting ongoing motivational climate surveys and the like. These applications all contribute to faster, more open information transfer and better, more complete communication.
c.. New training. Important actionable information requires the attention of people who are well-trained in sound decision making, problem solving and communication skills, lateral and creative thinking skills. To provide the technology without also providing these skills to employees is criminal. The sheer volume of information within a “digital nervous system” also demands the training of new time management skills, priority-setting and search refinement techniques, so that employees are not driven by external forces. Techno-enhanced training acknowledges that individuals have different memorizing and learning styles and preferences, and that computer programmed learning facilities can address these differences. A lot of this training can be self-directed.
d.. Stepped up face-to-face meetings. Greater use of technology to handle routine matters has the potential to free leaders for more important work, including communicating and interacting. Savvy CEOs increase their visibility and accessibility and step up face to face meetings as an integral element of any ERM system.
e.. Extra- and intranet applications enable people to cast a wide net in search of knowledge and insight which could be useful to an organizations “pulsing” of the marketplace and finding new opportunities for replication and innovation. Many employee complaints can also be responded to effectively via the electronic medium, and their grouping and analyses quickly point to areas of misalignment between vision and execution.
f.. Improved external customer point of contact processes and supporting technology help develop employee confidence and pride. But, as Bill Gates says: “If you don’t believe that all workers have the potential to contribute to your company’s success, all the technology in the world won’t empower them.”
There is no doubt that the application of technology and software as described above can greatly assist with improved employee relationships. However, they should never be seen to be a replacement of any of the other aspects of our CASTLE framework. (It’s akin to driving a car by either automatic or manual means. Greater skill is needed to drive manually and competent manual driving will always outperform automatic driving.) Deep understanding of and competent application of the “people basics” remains the foundation to which suitable enabling technology may be added.
Ladders
The ERM system should encourage each and every employee to honestly ask of themselves the following choice – question:
a.. An employee can choose to attempt to climb the “promotion ladder” and select alternative career paths in the clear knowledge of his/her level of leadership competence and other managerial, role and technical competence.
b.. Or, avoid getting stuck at their “level of incompetence” by taking on jobs that do not match their competence-set. Instead, they can climb the “specialist ladder” and become the very best at what they can be; pursuing their primary motivational drivers and “deeply hidden” competencies, gifts and talents. (Some firms and institutions encourage this endeavour by means of broad-banding salary scales. In this way it becomes possible for the person to be duly rewarded, and to advance by continuing to do essentially the same job.
c.. Or, either separately or in combination with one of the other ladders, to derive satisfaction by climbing the “personal growth ladder” to increase their employability, self worth and generic competence.
This becomes a way of streamlining and making career-pathing exercises more appropriate, and for customising employee mentoring, coaching and development programs.
Economics of Exchange
Paul Malherbe has postulated that earned EXCHANGE entitlement and opportunity is the basic principle of economic well-being. He proposes that value and wealth (both material and intangible) are created through perceived fair, win-win exchanges between two parties (but which carry benefit for all involved along the “production of value” line), and that various exchange types satisfy the whole person: physical, intellectual, social, emotional and spiritual.
Clearly the exchange between employee and employer consists of much more than simply payment for work performed. In the new world of work, we need to think far beyond such a narrow boundary. The employer/employee exchange is also about adult/adult relating, sharing, creating value together, providing opportunities to learn and grow together, and voluntary interdependence.
Employees resent management-imposed solutions and systems, will always ask “How will this threaten who I am and what I do?” and “What’s in it for me?” And in exchange for transparency and opportunity, will always freely give of their knowledge and skill, and show accountability.
The act of giving in the context of providing a comprehensive ERM system increases employability but paradoxically raises loyalty. “Loyalty” is no longer falsely locked in by pensions to come, loans to be repaid, the use of a company vehicle, and other fringe benefits. Nor is an employee decision to stay with the organization a function of the cost of leaving. Rather, it is a function of real, earned loyalty. A very different exchange value.
Businesses only grow if competent, supported employees are motivated to make the organization grow. Employees value belonging to something worthwhile, being respected, supported, trusted, appreciated, recognized, being a part of achieving something worthwhile, and developing our own potential. It follows that organizations that earnestly seek to meet these “internal customer” needs give themselves much better odds at:
a.. retaining valued employees, and thus reducing recruiting and training costs resulting from unwanted turnover wastage;
b.. developing an employee-base that is more employable, but which paradoxically increases loyalty to the organization;
c.. building a culture of learning, service and leadership;
d.. logic-driven reward and placement policies;
e.. creative resource-ing for project teams;
f.. benefiting from the experience, knowledge and commitment of loyal employees during moments of truth with external customers. If it holds true that sound “moments of truth” with customers-regardless of the channel of communication-only occur when competent and motivated employees display the necessary pride, perseverance and creativity, then investing in the capabilities and satisfaction of employees becomes an absolute imperative for forward-looking business;
g.. avoiding a “galley slave” approach;
h.. freeing HR departments from routine work, allowing them to concentrate on value-adding and strategic HR services;
i.. and improving shareholder value (by saving on routine employee-transaction costs, reducing “wastage,” raising motivation, competence, productivity and innovation levels, reducing turnover, retaining key talent, and improving external customer interactions).
Organizations would do well to follow the progression and principles which govern our ERM “system”. The CASTLE model for managing the nature, content and direction of relationships with employees is founded on:
a.. steering the organization and it’s people to a position of leadership and service (Culture)
b.. ensuring that desired results are achieved by combining competence, capacity and motivation (Alignment, Seaman’s credo)
c.. on a customized, adult-to-adult basis, using self service where appropriate (Ladders, Technology, Exchange economics)
d.. and for the purpose of establishing meaningful employee relationships that generate meaningful customer relationships. All of which, in turn, helps to drive profitability.
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References:
a.. Heskett, James, L, Sasser, W. Earle & Schlesinger, Leonard A : THE SERVICE PROFIT CHAIN (Free Press, NY, 1997)
b.. Williams, Graham : REFLECTIONS FOR 3H LEADERS ( Due for publication 2001)
c.. Molden, David & Symes, Jon : REALIGNING FOR CHANGE: eight principles for successful change management in your organization (Financial Times/Pitman Publishing, London, 1999)
Malherbe, Paul. N.: A Pragmatic Approach to THE CREATION OF VALUE, ENRICHMENT AND PROSPERITY (author published, Cape Town, 2000)
Gates, Bill , with Hemingway, Collins: BUSINESS @ THE SPEED OF THOUGHT (Penguin Books, 2000)
Dossiers – Empresas