Employee Experience is Not the Answer for Customer Experience

Companies bring these efforts together is out of ease, not for effectiveness

Whenever a group of executives get together to determine a company’s customer experience initiative, someone inevitably suggests improving the employee experience as both a starting point and primary solution for improved customer experiences. There are plenty of studies that show a link between employee satisfaction and customer satisfaction. Applying that data, using employee engagement as the answer is both the easy path and popular one for management and staff. It’s a lot more fun to celebrate employees than redesign complex operations to align with customer needs.

This course of action can lead a company to assign the customer experience work to existing structures within a human resources department. A similar alternative that is trending is to combine customer experience with the employee experience into a larger initiative (or department) called the “human experience.”

These courses of action happen for various reasons. One is that customer experience initiatives are often new and it is human nature to align it with something more familiar. Another reason is that it can be seen as a quick and cheap customer experience solution by making some management or alignment changes (reorganizations are often the management solution to many problems). In some scenarios it is easier to pass the blame to employees and supervisors and assume they need to be more engaged. Finally, companies can have the misconception that the overall customer experience is a synonym for the customer service its people provide and want to link it with the “people department.”

These initiatives might feel good, be popular in the hallway, and even result in some silos of success. But they will not lead to sustained, systematic improvements in the customer experience.

People can like their jobs and have fun while not making the experience good for the customer. Retail employees can have fun socializing with their work friends while dismissing shoppers. Sports teams can be made up of players that have fun and get lucrative rewards while losing games and upsetting fans. On the other side, there are companies like Amazon that are known for great customer experiences while also having a general reputation of unhappy employees. When it comes to employee and customer experience, it is possible to have one without the other.

Correlation v Causation

For years, it was popular to believe that drinking red wine regularly promoted good heart health. There were a number of studies published and broadcasted over the years to convince people. Today, that has largely been explained to be false. Was the earlier science wrong?

The answer can be found by viewing through the lens of correlation v. causation. Those people that drink red wine regularly may very well, on average, have better heart health. But the average person that appreciates drinking wine likely also has a higher income to spend on wine. Higher income persons generally have good health insurance, are more likely to have preventative doctor visits, and may have other lifestyle differences that contribute to better heart health. While people may enjoy alcohol and the social aspects with drinking, alcohol doesn’t produce any biological benefits to the body. In fact, it is a leading contributor to many cancers.

Wine and heart health are correlated through other leading factors, but alcohol is not a cause for good heart health. One can likely find similar correlations between luxury sedans and heart health, but most would not think buying an expensive car will help them prevent a heart attack.

We find a similar relationship with the employee experience and customer experience. Companies that have high employee engagement and customer satisfaction are ones that are investing in the long-term health of the company, consider people (whether employees or customers) as assets to spend money on, and focus on sustainable growth. Employee experience is correlated with good customer experience, but it doesn’t cause it.

Culture is what matters most

What drives both customer experience and employee experience is the organization’s culture. The word “culture” is often sometimes erroneously used as a synonym for employee experience (which fosters the myth that customer experience starts with employee experience). Instead, culture is simply the shared behaviors of how work gets done in an organization. This is largely created by the behaviors that are rewarded and what people are accountable to. If people benefit personally following certain behaviors and are accountable to them, their actions will reflect those behaviors and expectations.

What people do is the culture, not what they say. It doesn’t matter what is written on an office wall. If the words are not seen in action, people will align with whatever works in practice. If a company says collaboration is a core value, but success is experienced by backstabbing coworkers and drawing individual attention, then the culture will be one of selfishness and opportunity. In contrast, if people are rewarded for collaborative work, then that will be the culture.

Successful customer experience organizations are driven (caused) by accountability to a customer experience culture guided by service standards. Companies will see results in customer experience if they educate employees on the actions that drive customer satisfaction and consistently reward and recognize employees and teams that achieve success in the area. They will build trust in their colleagues like a sports team that understands the identity of their team to align for a championship. The clarity around shared actions and behaviors is what also leads to better employee engagement. 

The famous story of Alcoa developing a safety culture as a success driver is an example of how a clearly defined culture drives the core elements of the business. CEO Paul O’Neil claimed that the most important thing to the company going forward would be worker safety. The result was a fivefold increase in annual net income. Focusing on safety drove financial performance and also the employee experience. It was viewed as a successful approach to a systemic problem.

The lesson from this example is not that focusing on safety necessarily leads to better engagement and financial return. What is learned is that a clear, singular focus that everyone is accountable to is the essential foundation to a company culture. A strong culture impacts the overall business in a positive way and drive other business outcomes. The key is identifying behaviors and a focus that everyone is accountable to. A company realizes the thing that it prioritizes and rewards. Companies with great customer experiences put this at the core and see the benefits in employees and financial performance.

Does the employee experience matter?

The employee experience is still influential in delivering a memorable customer experience. Similar to customers, employees have needs. If the employees do not have their rational and emotional needs met, they are closed to engage with any extra work or new initiative. When a company’s employees are overworked, underpaid, underappreciated, then they have little incentive or energy to make any additional investment for others (whether it be the leadership’s request or the customer’s needs). Disengaged employees will only focus on what they minimally have to do to get through the day.

If the workplace climate is poor, there will also be higher turnover. That has additional negative impacts on the customer experience because it generally leads to more work and burnout from the ones that remain. It also results in a collective loss of knowledge that could otherwise help the customer.

In contrast, when employees are happy, engaged and motivated, they are more likely to perform at their best. This will include doing the extra steps beyond the minimal job requirements that will help the customer. Those employees are more likely to proactively identify creative solutions to customer needs. When there are interactions between employees and customers, it is more likely to be a positive one.

The employee experience matters in customer experience, it just doesn’t drive it. The employee experience must be viewed as just one aspect of an organization’s ability to be successful in customer experience (at Hundred Ten, employee engagement is referred to as the “Climate” category of the Four C’s of Customer Experience Readiness™).

Developing a customer culture

Any experience is based on a collection of rational and emotional needs being met. The employee and customer have different needs and processes to meet them. Customer experience has its own science and strategies for a company to build trust, loyalty and a competitive advantage with customers. As such, they need to be treated as separate initiatives driven by the culture.

Developing a consistent and sustainable culture to drive customer experience takes a focused and holistic multi-year strategy. The strategies need to be clearly articulated and communicated. Departments across the company will need to change some if its processes and systems to reflect the changes. Employees need to become familiar with the new culture. Some will self-select out of it. Others will need time to develop trust within the new system and see if others are actually accountable and if they are rewarded for following it. If they don’t see that accountability, it will be viewed as a “flavor of the month” and they will return to their old habits. This holistic change is what Hundred Ten leads in its Customer Experience Transformation™.

Transforming a company’s culture into one that is customer-centric takes time, resources and commitment. If it can be done, it will lead to customer success. In fact, it is the only way to achieve it.

Michael Pearce is a managing principal at Hundred Ten, LLC