Whatever their products—razors, drinks, project management software, or anything else—and whether they are startups or global pioneers, companies are finding it harder than ever to be competitive. Thanks to disruption, today’s status quo, doing business has become more difficult for everyone because of two main reasons.
First, competitive pressure is increasing, thanks to the fast pace of technological change and the intensity of direct competition. In a 2014 interview, venture capitalist Christoph Janz offered a description that still rings true five years later: “Many categories, in e-commerce for example, have now been captured, plus lower barriers to entry mean more competition, so most markets are more crowded than ever before. Starting a company is easier than it’s ever been, but scaling it to a large success remains the real challenge.” Large enterprises, too, face their own set of challenges, as new entrants turn categories upside down (e.g., Dollar Shave Club’s disruption of Gillette’s former market dominance) and leave stakeholders perplexed and profits plummeting.
At the same time, as global competition reaches a boiling point, the bar is raised. When Gillette was (more or less) the only option, for example, customer had to choose Gillette. Now a disrupted market means that customers have more choices and better experiences than ever before.
That same truth applies in every business category. Companies have stepped up and created a new set of standards. Today’s customers expect Apple-like innovation, Amazon-like delivery, and Netflix-style choice. In what’s known as the “halo effect,” these expectations affect businesses of all sizes and in all industries (even something as small and as specialized as a local store in Mississippi that sells only lightbulbs).
In this context, innovation is more important than ever. Businesses must build exceptional customer experiences (CX) or be left in the dust as their competitors overtake them. Across the board, business leaders “believe CEM [customer experience management] has a positive impact on their business.” And 81 percent of respondents to one 2017 survey said “they expect to be competing mostly or completely on the basis of CX” by the end of 2019.
The standards keep rising, and most companies are racing—and failing—to keep up. For example, only “22 percent of customer experience leaders report their CX efforts exceed customers’ expectations.” At the same time, “87 percent of organizations agree that traditional experiences are no longer enough to satisfy their customers.” It’s clear that even though a business’s success rests on its ability to create exceptional customer experiences, almost everyone is failing at this. Why? What’s the missing piece of the customer experience puzzle?
The halo effect doesn’t shapes only customer expectations. It also shapes employee expectations, because employees are also customers (for example, a company’s sales manager might love Netflix and its IT director might buy Apple). So any statements about how customers have new expectations of flexibility, convenience, and customer-centricity apply in the workplace, too. Customers expect to be more satisfied than ever and to have their unique needs accommodated—and employees have those same expectations.
Just as Dollar Shave Club has shaken up Gillette, new entrants in the business world (or astute legacy companies that are able to move fast) disrupt traditional employee experiences. Even if a business offers, say, more flexibility than other big companies, its people are comparing it to Google or Facebook or that cool new startup down the road. That translates into rock-bottom employee engagement levels globally. Although engagement is increasing in some areas (for example, it was up to 34 percent in the USA last year), overall levels are still dismal. That’s a big problem—and one big reason why a company’s CX efforts aren’t paying off as much as they could.
Employee Experience Drives Customer Experience
It’s been well documented that companies with high employee engagement enjoy better business outcomes on two levels:
Employer brand. Employee engagement defines a company’s employer brand. An organization that delivers a subpar employee experience will find it more difficult to attract candidates. As a result, it will never quite have the A-listers it needs to power innovation and deliver exceptional experiences.
Company culture. Poor employee experience creates a culture of disengagement, and disengaged employees don’t deliver exceptional services or experiences. That’s true for crucial customer-facing roles (such as sales and customer service) but also equally true back-end roles (for example, product engineers who don’t go the extra mile can damage the organization just as much as someone who works directly with the public).
A company with poor employee engagement will struggle to attract the best candidates and to get the best from its employees once they’re on board. Under those conditions, it can’t deliver the experience its customers need.
Prioritize Employee Experience
Happy, engaged employees make for happy, engaged customers. In order to transform the customer experience and stay competitive, businesses must give employees a customer-like experience in the workplace. A good place to start is by looking beyond the obvious things such as salary and employee benefits. Perks do matter, but a culture of engagement is even more valuable.
For example, only 12 percent of respondents to one recent survey “strongly agree that their organization does a great job of onboarding.”  When companies don’t start off on the right foot with employees, it’s no surprise when it struggles to engage them long term.
- Performance management is also crucial—for employees as well as for managers. Considering that manager quality determines “at least 70 percent of the variance in team engagement,” organizations should analyze how they select and train their managers.
- Learning and development are vital, too. Today’s employees expect to grow professionally and personally while they work.
- Companies should not neglect diversity and inclusivity. Key questions to answer are “Do all employees feel that they are treated with respect and that their voices are heard?” and “Do all employees feel that their unique perspectives are valued?”
A culture of employee engagement can’t be created overnight. It’s a long process that can’t be rushed by offering employees free breakfasts or flexible hours. But companies that take the time to get their employee experience right will see their customer experience follow suit—and thereby distinguish themselves from their competitors.
A passionate HR professional, entrepreneur, and cyclist, Stijn de Groef is the CEO of Talmundo (www.talmundo.com), an HR technology company. Before founding Talmundo in 2012, he worked in senior talent management roles at EMEA and at the global level at Swarovski and Goodyear. De Groef now travels the world to spread the word about Talmundo's employee onboarding software and the strategic importance for businesses to get onboarding right.
 Gallup. 2018. “Designing Your Organization's Employee Experience.” Gallup website, www.gallup.com/workplace/242240/employee-experience-perspective-paper.aspx.
 Hartner. 2018.