Why is it that common sense is resisted to such a degree that it comes at the expense of financial performance? There are two culprits.

By Matt Classen

Matt Classen, Arrow Northwest
Matt Classen, Founder/CEO of Arrow Northwest, Brand Identity Consultant

What, exactly, does “Employee Experiential” mean? On March 10th, 2017, Jacob Morgen published an article (Why the Millions We Spend on Employee Engagement Buy Us So Little) for the Harvard Business Review (HBR). In the article, Mr. Morgen rightly talks about why, despite companies spending incredible sums of money on employee engagement programs, these programs ultimately deliver very short-term performance results and “abysmal” employee engagement surveys.

Mr. Morgen goes on to further explain that companies that look to long-term engagement programs, essentially creating an employee experience, or “Employee Experiential”, is the only way to go. Thankfully, Mr. Morgen provided two fantastic graphics: the first clearly shows how “Employee Experiential” companies perform far better than even companies listed on Glassdoor Best Places to Work and Fortune Best Companies to Work For, when taking stock price into account. The second shows evidence detailing undeniably superior financial returns on investment for those organizations that engage in “Employee Experience” than those that do not. Here are those graphics:

employee experiential

employee experiential

Are the above graphics actually news?

As I write this, I’m finding it almost incredible to believe that it takes an article in HBR, citing two compelling statistics, to legitimize the fundamental common sense that any human being with a pulse should already understand instinctively. Let me put it in biblical terms: “Do unto others as you would have others do unto you”. Sound familiar? It’s called the Golden Rule, stupid. This rule is more relevant now than ever. After all, much of our economy in Knowledge-based, right? Knowledge-based companies operating in a knowledge-based economy should have the common sense to realize that the knowledge-based worker needs to be stimulated on multiple levels in order to maintain maximum engagement. If the “Employee Experiential” ethos clearly delivers a significant return on investment, why the devil do articles like Mr. Morgen’s (or my response to it) even need to be written in the first place? By now, this would be the same as if I were to report that the sky is blue and then actually get space in HBR for my profound insights. With this fundamental truth, would it not make sense for leadership within Knowledge-based orgs to really, deeply consider what it takes to activate people’s inspiration while at work? This seems to be a complete no-brainer, but here we are.

There are two reasons why leaders are so slow on the uptake with regards to employee engagement through the “Employee Experiential” model: human ego and apathy.

1. The pervasive ego within the “leadership class”

Like it or not, most of the “leaders” who hold leadership positions are still very much operating within an Industrial Era mindset, rather than an Information Knowledge Age one. The Industrial Era leadership mindset (which I wrote about in a previous article) is one where leaders view people as commodities (e.g. “Human Resources”) who are there to perform basic, repetitive functions much like we use machinery to accomplish today. The mantra of “just do your job and don’t ask questions” was/is the prevailing attitude. The Information Knowledge Age turns that mindset on its head. Employees (aka “Co-Creators) working within Knowledge-based businesses have (on average) received a higher education, been told that their insights and know-how are important and grown up in democratic societies which tell them that their voices matter. In short, “employees” want to know that their insights matter and that they need to be taken seriously. This poses a direct threat to those occupying leadership positions because they’re the ones who are supposed to have the monopoly on knowledge and know-how. Leadership within the Industrial Era mindset would never want to empower human engagement since it poses such a direct threat to their own need for hegemony.

By providing the “employee experiential” model for real engagement, leadership is basically destabilizing its hold on power because it would share the nexus of strength with employees. Leaders in Knowledge-based organizations who truly get this, and why it’s to their benefit to use it, will work with that flow rather than against it by providing an “employee experiential” model for engagement. On the other hand, Industrial Era leaders working within Knowledge-based organizations will resist an “Employee Experiential” model tooth and nail. Why? Simple: It threatens their ego too much to be taken seriously. Instead they’ll take the half-ass measures to which Mr. Morgen refers in his article and call it good. The problem is, and to quote Mr. Morgen, “The more this cycle repeats itself, the more it feels like manipulation. People begin to recognize the short-term fixes for what they really are.” With this in mind, let me ask some rhetorical questions:

  1. Do you like being manipulated?
  2. How would you feel about your organization if it became clear its leadership was manipulating you?
  3. How much more likely would it be that you would look for a different place to work, or one that did not have a reputation for manipulating its employees?
  4. Does it cost money for organizations to replace one dissatisfied employee, let alone the many who would search for greener pastures once they began to feel manipulated?
  5. Will this affect an organization’s reputation in a negative way?
  6. Will a negative reputation adversely effect an organization’s brand strength?
  7. Will an organization with poor brand strength be able to attract top talent?
  8. Will poor brand strength open the door for an organization’s competitors to supply the demand that it is negligent in supplying?
  9. Can organization’s with poor brand strength charge a premium for improved profit margins?

I could go on with the rhetorical questions, but suffice it to say that you probably get the point. Providing an “Employee Experiential” mindset within an organization is a no-brainer.

2. Leadership apathy

And of course, there is leadership apathy. This simply means that leaders are super busy now-a-days and it becomes easy to focus on other things. For organizations that do not already have the “Employee Experiential” mindset as a part of their brand identity mindset, instilling one would take significant time and dedication. With all the things most leaders have to focus on, this kind of project is huge, let alone daunting. With this kind of emotional barrier to entry, its easy to understand why leadership would balk at wanting to really, truly, create the “Employee Experiential” model within the organization. That said, leaders are there to facilitate maximum profitability. To not create an “Employee Experiential” environment, especially with such clear indicators for why it’s a no-brainer to institute (e.g. dramatically enhanced financial performance), represents apathy.

So there’s my rant. We can be grateful to Mr. Morgen for writing this article and for HBR for featuring it on their well respected website. Perhaps the more readers are exposed to the simple, no-brainer, common sense for the “Employee Experiential” model to employee engagement within Knowledge-based organizations, the more employees, organizations and whole societies will reap the rewards.