A Step in the Right Direction
Have you ever watched a baby take its first steps? It is quite a sight to see. The baby may wobble back and forth as she or he tries to stand upright and maintain balance. Then a parent coaxes the child to step forward. The child, often while gazing intently at the parent, takes that first tentative step…and then another…and another. The child precariously spans the divide between self and parent. For other children, only one step is taken before falling on their diapered bottoms. Even this minimal success may be followed by cheers from the parent and squeals of delight from the baby. But before long children master the art of walking and the parents face a new challenge…how to keep the child walking in the right direction. Toward the sofa…toward mom or dad-Good! Toward the street-Bad!
It is crucial to move in the right direction. Failure to do so can have tragic, even fatal, results. On a recent morning I was watching the news and learned that overnight three fatal car accidents had occurred in my metropolitan area. Two were the result of vehicles going the wrong way on the highway. It is likely that at the moment these vehicles moved into the lane that took them onto the highway, they believed they were headed in the right direction. It was late, dark, and there was not a lot of traffic on the highway. But it probably did not take too long for the error to be realized as the drivers looked up and saw one or more vehicles headed toward them with headlights blaring in the darkness. Unfortunately, sometimes businesses make changes they think will take them in the right direction. However, what makes sense intuitively sometimes takes us in the wrong direction. The good news? This can easily be avoided. The only way to know for sure what direction to go in is to be well informed. You need to be aware of internal and external forces that may impact the success of your business. One sure means of empowerment is to gain knowledge of the right direction by conducting employee and customer surveys.
Conducting employee and customer surveys provides insight into the attitudes and perceptions of the people driving the success of your company. This knowledge, used in the proper way, provides empowerment and points you in the right direction for success. In an article published in the Consulting Psychology Journal: Practice and Research, Kyle Lundby, Kristofer Fenlason, and Shon Magnan assert that “numerous studies have shown a significant relationship between employee attitudes, customer attitudes, and bottom-line financial measures.” One case in point was described by Anthony Rucci, Steven Kirn, and Richard Quinn in an article published in the Harvard Business Review. The authors describe a company that had a realistic grasp of how employees and customers actually think and behave. They found that a small change in employees attitudes had a measurable effect on increasing customer satisfaction and revenue growth.
In a book published by the Harvard Business School Press titled In Good Company: How Social Capital Makes Organizations Work, management experts Don Cohen and Laurence Prusak identify social capital as a resource that can contribute to every facet of organizational life. They describe social capital as the “glue that holds organizations together” and as an invisible resource that can multiply in value if it is nurtured properly. Cohen and Prusak define social capital as “a stock of active connections among people: the trust, mutual understanding, and shared values and behaviors that bind the members of human networks and communities and make cooperative action possible.” They state that social capital bridges the space between people. Not only can employee surveys help you identify where your company stands in terms of social capital, but analyzed correctly they can also identify key factors to work on to increase it. No matter how well we are doing we can always do better. Constantly striving to improve prevents us from living in a state of stagnation.
Let’s look at how a company providing high tech surgical equipment utilized employee surveys to increase employee engagement and perceptions and increase their bottom line. A few years ago this company decided to begin conducting annual employee surveys. They contracted with a consulting firm, the National Business Research Institute (NBRI), to develop their survey and to collect and analyze the data. The results of the initial survey were benchmarked against other companies in the same industry and the results were mediocre. The overall performance of this company was barely (6%) above average. What company strives to be barely above average? That’s right, none. The statistical analyses performed on the data indicated five root causes that were driving 59% of the survey items. They were:
- My supervisor communicates effectively.
- Management decisions are in line with company values.
- I understand the company’s values.
- My supervisor effectively utilizes resources.
- The company rewards those who contribute most.
Determined to improve their standing, this company took immediate action to improve their employee’s perceptions of these five drivers. One year later, they surveyed their employees again to see if these perceptions had improved. They discovered that perceptions had improved on all five drivers and each had increased between seven and fourteen percentiles! In addition, benchmarking indicated that their overall performance had increased by eight percentiles! Every topic and item on the survey was also identified as a strength, opportunity, weakness or threat based on its percentile ranking. A topic or item is categorized as a strength if it ranks at or above the 75th percentile; as an opportunity if it ranks between the 50th and 74th percentiles; as a weakness if it ranks between the 25th and 49th percentiles, and as a threat if it ranks below the 25th percentile. The topic analysis showed that the company had doubled the number of topics in the strength category with some topics improving as much as 24 percentiles! The number of items in the strength category also doubled! Items had improved a minimum of seven percentiles and a maximum of 24 percentiles! Three items were found to be driving employee perceptions in the second annual survey. These were:
- I am encouraged to work with my team to solve problems.
- There is appropriate information exchange within the company.
- My supervisor treats me with respect.
These three items were found to be driving 61% of all survey items. Thus, this year the company only has to focus on improving perceptions in these three areas in order to see dramatic improvement again next year. While these improvements in survey scores are fantastic and exciting, what about the bottom line of the business?
Q: Has the company’s financial performance increased since they improved their employees’ perceptions? Has the company realized a return on its investment (ROI) in conducting the employee surveys? A: You bet! Since the company began working to improve employee perceptions, their revenue increased by $23 million in just one year! This was a ten percent increase in revenue over the previous year. During that same time frame, the number of customers using their products increased by 45%! If you would like to begin surveying your employees and/or customers in order to move in the right direction and improve your bottom line there are some things you should keep in mind.
- You must survey regularly. Human behavior is dynamic; it is always changing. It is vital to keep your finger on the pulse of your employees and customers in order to have the knowledge that will empower you to keep improving your rankings and profits. According to Dr. Jac Fitz-enz, author of How to Measure Human Resources Management, 3rd Edition, annual or semiannual surveys are common.
- Turnover Cause Analyses (TCA) will increase your empowerment. Dr. Fitz-enz states that ongoing employee surveys, combined with analyses from exit surveys, will increase your ROI. Knowing the root causes of turnover will give you the knowledge you need to decrease it. Fewer quits will positively drive greater financial returns, according to Dr. Fitz-enz.
- Make sure the consulting firm you use for your surveys provides high quality products and analyses. According to Dr. Fitz-enz, the central issue in any benchmarking program is the guarantee that data quality are reliable and valid. It is a good practice to go with an established firm that has standardized instruments and millions of pieces of data in its benchmarking database. A cheap, poorly designed, and incorrectly analyzed survey by consulting firms only looking to make a quick buck seldom yield anything of value and can be misleading.
If you would like to have more information on how NBRI can help your business conduct a quality survey to help you move in the right direction, contact us now at 800-756-6168.
By Cynthia K. S. Reed, Ph.D.
National Business Research Institute