Tuesday, August 18, 2009

Can Employee Engagement Lead to Job Growth?

I read a really good article in BusinessWeek, titled, It's Not the Economy StupidI found the excerpt below to be the most interesting:

Based on extensive, long-term research, Gallup has determined that less than 30% of the corporate workforce is truly engaged in its work. That's less than 30% of employees who work with passion and feel a profound connection to their companies. Yet employee engagement leads to increased customer engagement, which leads to real revenues and, eventually, more job opportunities for others.
This article really made me stop and think.  I have always known that a high level of employee commitment/engagement leads to increased customer loyalty which increases revenues.  But I never thought about taking that equation one step further to consider the ramification in our current economic situation.

By enjoying increased revenues through increasing engagement, companies can then hire more people.

So, in today's economic situation it makes perfect sense to PAY ATTENTION to your employees commitment to the organization. 

Another strong argument for paying attention to engagement is that innovation and creativity is higher with engaged employees.  Better innovation and creativity leads to better and improved solutions for customers and the organization.  As a result of the improved solutions, organizations then can sustain a competitive advantage over its competition.

So with the benefit of increased revenues and competitive advantage, why wouldn't you measure and track employee engagement/commitment?

GOT ENGAGEMENT?  What are your thoughts on this topic?


Barbara said...

I liked that article, too. But do you think that companies draw a "straight line" from an employee to innovation or are most companies still hiding innovation away with a bunch of guys wearing lab coats and doing their own thing, separate from the rest of us?
How can we introduce innovation as an activity that is democratic in that it's for everyone by everyone? How long before people stop asking "who owns innovation"?

Richard Parkes Cordock said...

I'm a big advocate of the connection between people and profit.

You speak about an equation, well here is one for you which I've written about before:

Profit Growth = B+BA+ TTF

This is Profit Growth = Buy + Buy Again + Tell Their Friends.

When you can create a company (like Apple for example) where customers love to buy from you, repeat buy, and then recommend you, strong profit growth will never be far away.

But how to you create a company where customers want to keep buying and recommending? As you rightly point out, it is down to the people.

Only when your staff are passionate, driven and engaged with your company (at an emotional and intellectual level), will you be able to serve your customer at the level the want and expect, which brings them back time and time again, and compels them to recommend you.


Unknown said...


Wow, great question. I have some thoughts on that, I would love more discussion around the topic. I am coming at the topic from an HR perspective, so I immedialtely think about the environment or culture that is needed to nurture and motivate creativity and innovation. Descriptors like openess, risk tolerance, communication come to mind. Also, another piece is that innovation and creativity has to be rewarded. SO, if someone comes up woth a great idea make sure that is celebrated and rewarded. As far as who owns that...my gut says, everyone. Thoughts?

Unknown said...


Thanks for the feedback. I like your equation as I think in those terms. I wholeheartily agree with employees being engaged at 2 levels, I often say you have to have their heart and their mind!

Thanks for reading!


Barbara said...

Those are great descriptors. They result from an intention by leadership to involve employees and customers in creating and innovating. I think social media is showing executives that a more democratic (not chaotic) system is evolving where other peoples' insights will be the charm, competitively speaking.
People will continue to make the difference and as more "knowledge work" is outsourced to smart people in developing countries, our role in the US and other developed countries is to harness the "last frontier": creative thinking, innovation and design (Good reading on this: A Whole New World by Donald Pink).
I see it happening now with Gen Yers and Millennials: they understand the power of their own creativity and if established companies don't attract them, these smart kids will simply start up their own ventures. Of course, established companies can buy up the start ups but how much better to have the creativity in house and stimulating other employees?
Gary Hamel, my favorite strategy guru, has some good thinking on this in a HBR article from February 2009 and a recent keynote speech at a Spigit Conference.

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