How Measuring Leaders Can Boost Internal Engagement and Profitability

Patricia Bayerlein, IPR Measurement Commission 

Employee experience has emerged as a key focus for companies seeking to improve strategy execution and results (for example, see PRN, Feb. 20, page 1 story).

As we know, change is the new constant in business. Companies must remain nimble and flexible in their strategies. To succeed, they need to get the word out to all employees and gain buy in on strategy changes. Unless companies take employee experience into consideration, however, they will achieve partial success at most.

Employee Experience: No Easy feat

An outstanding employee experience is much harder to create than one might expect. Employee experience is defined as a set of perceptions that employees have about their experiences at work in response to their interactions with their company or organization, according to the IBM Global Workforce Institute.

The best-in-class companies focus on the critical moments that drive real value, as opposed to just delivering a service to the workforce.

Deloitte (2017) found 80% of executives rate employee experience as “very important” or “important,” yet just 22% of companies believe they’ve successfully created a unique employee experience. And 59% of executives reported they were “not ready” or only “somewhat ready” to address the employee experience challenge.

Businesses should make it a goal to close this gap, because a focus on employee experience also is demonstrably linked to bottom-line results. Companies that invest significantly in enabling leaders to work with employees on improving engagement are rewarded with a 29% increase in operating income versus those that don’t, according to Aon Hewitt, the global consulting firm.

Bolstering those findings, Jacob Morgan, author of  The Employee Experience Advantage, notes companies that invest in employee experience are four times as profitable and generate twice as much revenue as businesses that don’t.

Communicators’ contribution to driving a great employee experience generally involves improving the effectiveness of internal communications. They’ve focused their efforts on channel effectiveness—measuring and improving email open rates, video views, intranet visits and other similar metrics.

Company Leaders Are Key

Those data points certainly help communicators understand how strong a company’s information flow is and identify where gaps exist. But those metrics provide an incomplete picture because they fail to take into account the most important communications channel of all—the company’s leaders.

The value of leaders in the communications mix can’t be overstated. As the saying goes, “People don’t quit jobs; they quit bosses.” My contention is that at many companies, leaders are being underutilized in providing the crucial link between effective communications and employee experience.

Leaders set the tone for employee experience. They play a critical role in crafting a positive work environment by being responsible, acting with integrity and leading with purpose. They’re the key translators who take business strategy from the C-suite and turn it into effective, on-the-ground execution.

So how do leaders become more effective communicators and drivers of a stellar employee experience? Supporting three key behaviors is important:

1. Articulating a Vision: Leaders need to provide clear direction and make strategy more emotionally resonant and relevant to the job at hand. For example, in a business transformation, leaders who use storytelling to outline the ‘why’ together with the ‘what’ and ‘how,’ drive a stronger goal-orientation and commitment in their team.

Leaders also bridge the gap between a company’s and employees’ lived experience at work, which includes building on shared values and a connection to purpose.

2. Using Open, Timely Communication:Leaders who practice openness convey trust—an important influence on the degree to which employees have confidence in managers and senior leaders. Trust also increases engagement and commitment. Open communication can take different forms—from dialogue to improve a workplace issue to encouraging and eliciting viewpoints from others.

3. Sharing Information to Drive Decisions:Employees who participate in decision-making have a higher degree of satisfaction with their experience at work. Research shows employee participation also is associated with higher commitment and greater well-being.

Information Sharing Creates Advantage

Companies that share information create a frontline advantage. The first step for a leader is to make time for regular interactions with frontline managers. This sends the message their work is important. The real value comes from sharing business-critical issues these managers deal with and giving them permission to solve them.

Communicators must reinforce these key behaviors and identify other opportunities to improve information flow and leadership communication effectiveness to create a stronger employee experience. That, in turn, increases employee engagement and delivers the positive results everyone wants.

The fundamentals of good execution start with making sure information flows where it needs to and decision rights are clear, a Harvard Business Review study says (“Secrets to Successful Strategy Execution,” by Neilson, Martin and Powers, June, 2008). The same study found actions related to improving information flow and decision rights are twice as effective as improving motivators and structural change.

Measure Information Flow and Leaders

These ideas argue for the need for information flow to be maximized. As such, information flow should be measured. Survey staff on its perception of communications as timely, relevant, unique (not duplicated), accurate, complete and inclusive. The fundamentals should also measure leader and manager communication competencies, skills and the reliability and efficiency of systems and processes.

To improve employee experience, however, companies need to take the extra step and ask questions about leaders’ behaviors. These behaviors may include candor, listening and feedback, articulating a vision, sharing information, conducting respectful conversation and leading change.

Most organizations, of course, have a general idea about how effective or ineffective their communications are at the leadership level. This analytic focus can help them pinpoint and quantify specific behaviors that need improvement.

For example, a multinational company’s leaders struggled with change readiness, a common problem. The company’s leaders excelled at telling people change was coming but failed to help them manage through it.

The issue was a lack of transparency and knowledge of how change was progressing. This left employees floundering day-to-day, with engagement well below desired levels.

Armed with leader behavior-level data, the internal communications team was able to identify actions for leaders to take, including maintaining a steady drumbeat of communications, increasing leadership visibility, celebrating real-world wins and putting setbacks into perspective. The result? Better communications effectiveness that also directly improved the employee experience and retention of top performers.

Measuring communications effectiveness at the channel level is an important first step. But it’s not only what you say. It’s what everyone, including leadership, does with information that’s just as important.

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