employee inspiration: how to create energy that drives better customer outcomes

NET PROMOTER SYSTEMSM:

EMPLOYEE INSPIRATION:How to Create Energy that Drives Better Customer OutcomesNovember 1st, 2016

Net Promoter®, NPS®, and the NPS-related emoticons are registered service marks, and Net Promoter Score SM and Net Promoter SystemSM are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld.

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Housekeeping

3This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent

INTRODUCTIONS

• Head of Americas Customer Strategy & Marketing Practice

• Leader in Financial Services practice with a focus on B2B lending, commercial insurance and payments

• Expertise in:- Customer loyalty - Net Promoter System- Employee Engagement- Business unit strategy

• Previously with Dell Computer and Price Waterhouse Coopers

DARCI DARNELLPARTNER, CHICAGO

SARAH DEY BURTONSR. DIRECTORSAN FRANCISCO

• Sr. Director, Customer Strategy & Marketing Practice Area• Expertise in:

- Customer loyalty- Employee Engagement - Brand and Marketing Strategy- Design thinking

• Worked in retail industry for 9 years focused on Corporate Strategy, Marketing and Consumer Insights

• Manage a global team who all work remotely (not in an office) so am challenged daily with how to inspire my team with those constraints


TOPICS FOR TODAY

•Context for discussion: Bain & Co. thought leadership in customer advocacy

•Definition of engagement and the best ways to build an understanding of levels of engagement

•Engagement drivers and employee experience

•Engagement system and Bain’s differentiated approach


BAIN & COMPANY’S PERSPECTIVE ON LOYALTY IS SHAPED BY YEARS OF EXPERIENCE

Industries: • Financial services • Consumer products• Retail• Technology• Air transportation• Telecom• Industrial goods

& services• Other

Engagement focus:• Customer segmentation & value

proposition• Customer acquisition• Share of wallet

growth• Customer

experiencere-design

• Loyalty & retention

• Differentiated IP focused on system vs metric and customer centric culture transformation

• Bain ‘wrote the book’ on loyalty

• Forum for senior executives from leading companies to learn from, share, and enhance best practices

• Sample of current forum members:

• Publish in top business journals

• Net Promoter

• Loyalty economics

• Moments of Truth approach

• Inner/Outer loop processes & mechanisms (closed learning loops)

• Employee Inspiration

• Results Delivery

• Digital transformation

• Episode/Journey analytics

• Design thinking

• Both Brain customer insights

> 8,900 customer strategy & marketing related projects…

Source: Bain & Company experience center a/o July 2015

CONTEXT

Client

enga

gemen

ts

Research &

Publishing

Collaboration Prove

n Too

ls

Loyalty & NPS

perspective

& expe

rtise

• Dedicated practice/Center of Excellence with global experts

• In-house Advanced Analytics group

• Net promoter system website:http://www.netpromotersystem.com

http://www.lego.com/en-US/default.aspx

http://www.americanexpress.com/

https://personal.vanguard.com/us/home?WT.srch=1


0

100

200

300

400

Growth (indexed)

0 5 10 15 20Years

Loyalty Leader

Average

>2xCAGR

15% Lower

0

20

40

60

80

100%

Average Loyalty Leader

Costs

LOYALTY LEADERS OUTPERFORM ON BOTH GROWTH AND COST

CONTEXT


How likely are you to recommend our product/service to a friend or family?

0-6

7-8

9-10

Extremelylikely

Extremelyunlikely

% Promoters

Net Promoter Score SM (NPS ®)

MINUS

% Detractors

NET PROMOTER BEGAN AS A POWERFUL AND SIMPLE METRIX TO MEASURE CUSTOMER LOYALTY

CONTEXT


RELIABLE, TRUSTED CURRENCY/METRICNPS/eNPS; common language; loyalty economics

SUSTAINED LEADERSHIP COMMITMENTStrategic priority; inspirational behaviors that earn customer and employee advocacy; sponsorship spine

EMPLOYEE/TEAM ENVIRONMENT FOCUSED ON LOYALTYSafe environment, effective organization, right tools and training, valued fairly

ROBUST OPERATIONAL AND ANALYTIC INFRASTRUCTURE

IT EVOLVED INTO A SYSTEM: MECHANISMS TO SUPPORT A CULTURE OF CUSTOMER CENTRICITY

FEEDBACK, LEARNING AND IMPROVEMENT

Individual learning, behavior

change, and connection with

customers

INNERLOOP

Root cause analysis, prioritization & implementation of

structural improvements

OUTERLOOP

HUDDLE

Teamproblem-solving, issue escalation,

mutual commitment

OUR FOCUS TODAY

CONTEXT


THE PROMOTER(SM) FLYWHEEL: EMPLOYEE AND CUSTOMER ADVOCACY TOGETHER FUEL GROWTH

Note: The Promoter Flywheel is a service mark of Bain & Company, Inc.

You need highly engaged employees to deliver the differentiated experiences required to earn customer advocacy

STAY HERE!RECOMMEND!

WORK HERE! STAY HERE!

PROFITABLE, SUSTAINABLE

ORGANICGROWTH

CONTEXT


COMPANIES WITH ENGAGED EMPLOYEES DELIVER SUPERIOR FINANCIAL RESULTS

… AND IMPROVE PROFITABILITYCOMPANIES WITH HIGHER ENGAGEMENT GROW FASTER …

0

1

2

3

4

5

Low employee engagement

1x

High employee engagement

Up to 2.5x

Revenue growth

Source: Hay Group Insight “Engaging and Enabling Employees to Improve Performance Outcomes” (2009 Hay Group global normative database); Russell Investment Group and Great Place to Work Institute (98-08);

• More customer loyalty- Higher average revenue per

customer- More customer referrals- Lower customer churn

Revenue

Cost

• More efficiency- Increased productivity- Lower absenteeism

• Reduced attrition- Lower hiring and training- Less on-boarding

• And for some industries: - Less shrinkage- Higher quality- Less safety incidents

CONTEXT

11

0

10

20

30

40Employee NPS

Manag

emen

t*

33

Comm

unica

tions

*

26

Human

reso

urce

s*

21

Finan

ce

14

Marke

ting

11

Sales

11

Purch

asing

10

IT

8

Prod

uctio

n

6

Serv

ice

6

Adm

inistr

ation

*

4

Function type

-20

0

20

40

60

80Employee NPS

0

62

1

39

2

31

3

16

4

15

5

4

6

-2

7

-5

Hierarchy level (0=highest)

ENGAGEMENT LEVELS ARE OFTEN LOWEST FOR THOSE WHO INTERACT WITH CUSTOMERS

*Sample size <600Source: Netsurvey/Bain analysis, September 2012 (n=27,628); Netsurvey/Bain analysis, September 2012 (n=130,000+)

FUNCTIONS CLOSEST TO THE CUSTOMER HAVE LOW ENGAGEMENT

FURTHER DOWN IN ORGANIZATION, LOWER THE ENGAGEMENT

CONTEXT


THE RELATIONSHIP BETWEEN CUSTOMERS & EMPLOYEES

CUSTOMER NPS 75%

?

EMPLOYEE NPS -10%???

CONTEXT


YOU KNOW THEM WHEN YOU SEE THEM!

The employees who make the highest impact on your business exhibit energy, enthusiasm and creativity to

improve the lives of customers and colleagues, supporting the mission of the company

Benefits:•Deeper customer loyalty•Higher productivity•More innovation•Better employee recruiting and retention•Lower costs•Faster, more profitable growth

DEFNIITION

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent


EMPOWERING AND DRIVING CHANGE AT THE FRONT LINE: LEADING BY LETTING GO

Source: The Ultimate Question 2.0; Fortune; American Express website

High employee turnover,stalled customer satisfaction

20,000 employees in 24 countries

• Scripts for consistency, quality, and speed

• Average handling time for unit cost targets

• Call quality monitoring

SITUATION LEADING BY LETTING GO

FOUR LEVERS RESULTS

• “Telephone Service Center Reps” became “Customer Care Professionals” with increased pay and schedule flexibility

• Call center scripts and average handling time limits eliminated• Hiring criteria changed

to emphasize hospitality and values versus technical skills

• Focused Customer Care Professionals on a single metric: Customer NPS

• Clear, simple goal that resonates

• Freedom within a framework (guardrails)

• Coaching and support

• High-velocity closed-loop feedback

• NPS doubled• They won the JD Power Award for service 5 years in a row

• Employee attrition cut in half• Higher profitability:• Costs came down 10%/year as % of revenue:

- Fewer dial transfers- Lower average handling time- Fewer repeat calls – higher first contact resolution


DRIVERS

CREATING AN INSPIRED WORKFORCE DEMANDS THAT YOU MEET MULTIPLE NEEDS

“The Job”“The Team”“The Company”

LEGEND

Source: Bain & Company

EMPLOYEE SATISFACTION

EMPLOYEE INSPIRATION

Differentiators: “Inspiring energy, enthusiasm, and

creativity”

Purpose Fit Autonomy Affiliation

The foundation: “Meeting basic needs”

Valued andsupported Growth Have what

I needWork

environment

LeadershipInspiration

Comp/Promotion


BAIN’S NET PROMOTER INSPIRATION SYSTEM EMPLOYS FOUR PRIMARY MECHANISMS

• Prepare: Launch a short, confidential survey to employees preceding a team huddle (at least monthly)

• Feedback: Deliver customized results to team leaders

• Engage: Conduct team-level dialogues with survey feedback as key input

• Action: Problem solve and agree on actions to address local issues

• Escalate: Identify systemic issues to be escalated

• Tier: Each management level huddles and addresses issues within authority

• Prioritize: Central team prioritizes systemic issues for “move the needle” initiatives based on clear understanding of impact and value

• Communicate: Actions communicated back

TEAM HUDDLE OUTER LOOP

ANNUAL EMPLOYEE SURVEY

• Gauge “relationship”: Assess progress on employee engagement

• Identify systemic issues: Identify areas of focus for central team initiatives based on aggregate view of the employee experience, as well as trends across groups

INNER LOOP

SYSTEM


HUDDLES SUPPORT AN AT CAUSE COLLABORATIVE CULTURE FOCUSED ON REALIZING THE MISSION

ISSUES REQUIRING MORE SUPPORT ARE ESCALATEDINTO THE OUTER LOOP

EMPLOYEES COMMIT TO INDIVIDUAL AND TEAM ACTIONS

THE TEAM COMES TOGETHER TO DISCUSS ISSUES AND OPPORTUNITIES

ANONYMOUS INPUT PUTS ISSUES AND OPPORTUNITIES ON THE TABLE

RESULTS: Enthusiastic employees work together to improve their job effectiveness, team environment, and personal experience

SYSTEM


BEST INDICATOR OF INSPIRATION ‘MY JOB INSPIRES ME’ AND A SAMPLE OF QUESTIONS TO PROBE

0.0

0.2

0.4

0.6

0.8

1.0

Predictive value vs. Bain Engagement Index

My job inspires me

0.76

I feel inspired, motivated, and valued

at work

0.58

Satisfaction with

company as a

place to work

0.47

Likelihood to recommend

company

0.40

I very often "go the extra mile" at

work

0.32

Source: Bain Employee Engagement Survey, November 2015 (n=2482)

BEST INDICATORS OF ENERGY, ENTHUSIASM & CREATIVITY

OVERALL INSPIRATION

ACTION ORIENTED

TEAM AFFILIATION

• “My job inspires me”- Why?

• “I would recommend my company as a place to work to friends or family members”- Why?

• “I would recommend my company’s products and services to friends or family members”- Why?

• What is one thing we could do differently to serve our customers better?

• What is getting in the way of doing a great job today?

• “We are making progress as a team towards a meaningful goal”

• What team member contributed most to our team’s effectiveness this week?

SYSTEM


OUR APPROACH IS DIFFERENT: FOCUSED ON CUSTOMER AND BUSINESS OUTCOMES

ANNUAL EMPLOYEE SURVEY – administer a large survey once per year with limited focus on engagement in the interim

CUSTOMER CENTRIC ENGAGEMENT SYSTEM – a process that drives continuous improvement of employee engagement as a means to deliver better customer outcomes

ORGANIZATION-FOCUSED – mostly large organizational initiatives vs. a focus on teams, individuals and their roles

INDIVIDUAL-FOCUSED – combine large initiatives with a parallel focus on driving inspiration at the individual level

LIMITED ACTIONABILITY – over-emphasis on survey results vs. specific actions for leaders and teams

INSIGHTS TO DRIVE ACTION – provide clear insights on where to focus efforts and the support to embed employee engagement in operating system

FOCUS ON SATISFACTION – measure how happy employees are with the company and the work environment, with limited ability to tie to business outcomes

FOCUS ON INSPIRATION – measure the energy, enthusiasm, and creativity that your employees bring to work, leading to productivity and innovation

OWNED BY CENTER/HR – attempt to drive top-down change, making it difficult to empower and instill a sense of ownership in line leadership

PARTNER HR WITH LINE LEADERSHIP –empower line leadership and employees to bring bottom-up change, holding leaders accountable for results they control

COMMON APPROACH BAIN APPROACH


HOW EFFECTIVE IS YOUR EMPLOYEE INSPIRATION SYSTEM?

Where does employee inspiration fit in the company’s strategic agenda? Is it a top 5 priority?1

Does senior management know where the biggest opportunity exists to improve levels of inspiration, and how to drive it?2

Who has accountability for increasing employee inspiration?3

Do supervisors have the right training and information to hold regular, productive dialogues with employees, and act on the learnings?4

Are there procedures, processes and mechanisms in place for putting employees in charge of their own work environment?5

Is inspiration a metric or a system? And is progress tracked? 6

[email protected]@bain.com

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THANK YOU!