meeting a representative of a company
PHOTO: Tech Jobs Tour

“Price, quality or service. Pick two.”

You’re no doubt familiar with the most famous catchphrase of the “triple constraint theory” of business: the idea that an organization must sacrifice one of those three elements to deliver on the promises of the other two.

Another way to put it is, “You can’t have it all.” Except now you can. Largely debunked today, the 1950s-era triple constraint theory made sense in a time when companies mostly made widgets. But these days, don’t even think about telling modern digital consumers they must sacrifice any one desire to receive value. Today’s customers don’t just expect high quality and excellent service at a fair price — they demand it. Luckily, today we know far more about how to provide people with the experience they want. And it all begins with employees.

How Employee Engagement Affects Customer Experience

Gallup’s most recent State of the American Workplace (registration required) report states that companies in the top quartile of employee engagement experience 10 percent higher customer ratings than companies in the bottom quartile. Engaged employees develop stronger relationships with customers, leading to a better customer experience, which, in turn, results in more sales and higher profits. Moreover, engaged workers are less likely to leave their employers, reducing turnover and onboarding costs and helping to ensure that institutional memory isn’t lost. On the flip side, by adversely influencing co-workers, missing work and outright stealing, the most bitter (or “actively disengaged”) employees are responsible for estimated productivity losses of between $483 billion and $605 billion dollars annually, according to Gallup.

If the connection between an engaged workforce and a positive customer experience is so strong and the costs of a disengaged workforce are so high, why aren’t more organizations making employee engagement a priority? 

Overall, only one-third of U.S. workers are engaged in their jobs, according to Gallup. But at the top U.S. companies, 70 percent of employees are engaged in their jobs. That jibes with the 2016 Temkin Group Employee Engagement Benchmark Study (fee charged), which found organizations that excel at customer experience also have the most engaged employees. In fact, they have “1.5 times as many engaged employees as do customer experience laggards,” according to the report. So the evidence suggests that not only is there a strong correlation between employee engagement and customer experience, but that engagement can be nurtured and developed.

A blog post from U.K. customer experience consultancy KPMG Nunwood reminds us that “happier employees tend to be more motivated and focused, and possess a greater determination for the company to succeed.” The post cites the example of an organization whose track record proves that employee engagement and customer experience are practically synonymous: USAA, a provider of financial services to active and veteran U.S. military personnel and their families. KPMG Nunwood calls USAA “the most successful [customer experience] organization in America.” and gave the company a customer “empathy” score that’s 22 percent higher than the average score it awarded to U.S. companies, as well as a “world-leading” Customer Experience Excellence (CEE) score of 8.69. According to KPMG Nunwood, the key to USAA’s success is that it treats employees the way it wants employees to treat customers, and the company promotes employee engagement by “helping the employee get inside the head of the customer.”

Related Article: Want to Be Customer-Centric? Engage Your Employees

Engaging Employees for Better Outcomes

What makes an engaged employee? Perhaps surprisingly, according to a recent report from TINYpulse, a maker of employee engagement software tools, factors like work environment, culture and interpersonal relationships play a bigger role in employee engagement than tangibles such as pay, benefits and flexible schedules. Nonetheless, companies trying to foster engagement remain doggedly focused on the latter while often ignoring the former. For instance, according to the report, only 24 percent of employees feel connected to their peers, an 11 percent drop from the previous year. Worse, only a quarter of employees feel valued, down 16 percent.

Workers cite lack of transparency as one of the key obstacles to engagement, yet in a McKinsey & Co. report titled “What It Takes to Deliver Breakthrough Customer Experiences,” fewer than 30 percent of organizations said they have a “highly collaborative culture.”

A single platform that enables employees to easily find each other, connect, communicate and cooperate on projects and documents creates an environment that fosters engagement. Like the best social networking sites, a truly interactive intranet can bring people, information and processes together across the enterprise — in contrast to the ever-expanding mishmash of disruptive conversation apps and barely-used stack tools. A good intranet is a digital workplace that provides a gateway to a company’s most important assets — its knowledge and people — for fast onboarding, seamless IT and HR support and free-flowing corporate communication. It’s the hub that keeps everyone informed, aligned and, most importantly, engaged. Best-of-breed systems even offer borderless communication with vendors, partners and customers, further strengthening the bond between employee engagement and customer experience.

Related Article: Why You Need to Map the Employee Journey

Customers and Employees Can Have It All

The customer journey begins (and often ends) with employees. Time and again, organizations that nurture workers by providing a clear purpose, a positive work environment and a collaborative culture come out on top. Meanwhile, organizations that rely on outdated hierarchical, carrot-and-stick management models have seen their fortunes diminish as they still insist, despite overwhelming evidence to the contrary, that customers (much less employees) can’t have it all.

Today, there is no longer a choice between desirable outcomes. Price, quality and service? Your customers won’t settle for less than all three. Successful organizations know that in today’s digital workplace, customer experience is no longer about constraints; it’s about opportunities. Perhaps, then, we’re due for a new motto for our times: “Employee engagement, customer experience and better business outcomes. Choose all three.”