604. Stephan Meier, Author of The Employee Advantage

Key takeaways

Prioritizing employees can drive organizational success, as engaged employees lead to increased productivity and customer satisfaction.
The pandemic has highlighted the need for companies to reevaluate their workplace dynamics and embrace flexibility.
Employee engagement metrics are crucial for understanding organizational health and need to be prioritized alongside customer satisfaction metrics.
Successful examples of employee-first organizations like Costco and DHL demonstrate that investing in employee well-being correlates with financial performance.
Organizations should apply customer engagement strategies to enhance employee experiences using feedback and ideation workshops.

Summary

Background and Introduction to Employee Advantage

In this episode of Unleashed, host Will Bachman welcomes Stefan Meyer, a professor at Columbia Business School and the author of "The Employee Advantage." They dive into Stefan's teaching background, which encompasses business strategy and the future of work. His experiences, including international trips with students to African countries, underscore the importance of understanding diverse business environments. The conversation transitions to the core premise of Stefan's book, which links how treating employees with priority is crucial for organizational success. He notes how the pandemic has emphasized the need for businesses to rethink worker dynamics.

The Importance of Employee Centricity

Stefan discusses the idea that despite many executives claiming their employees are their most important assets, engagement levels, as reported by Gallup, reveal otherwise—65% of Americans are not engaged at work. This discrepancy is attributed to the difference in how executives communicate about employees versus customers. He argues that genuine engagement leads to productivity, innovative ideas, and, ultimately, satisfied customers. By prioritizing employee satisfaction, organizations can break the cycle of disengagement.

Successful Employee-First Companies

The conversation touches upon examples of companies successfully embodying the employee-first philosophy. Stefan highlights Costco and DHL Express as organizations that prioritize employee happiness and internal career paths. These companies understand that their employees' experiences translate into positive customer experiences. The discussion emphasizes that treating employees well leads to lower turnover, higher engagement, and better financial performance.

Balancing Employee and Customer Needs

Stefan articulates the need to balance employee and customer interests, pointing out that while businesses often focus on customers, considering employee satisfaction can open new avenues for success. By using Starbucks as a case study, he illustrates how an overwhelming focus on customer centricity has impacted employee satisfaction negatively. This section emphasizes the need for organizations to listen to both employee and customer feedback equally to create a thriving work culture.

Strategies for Implementing Employee-Centric Practices

In the closing sections, Stefan outlines the practical steps organizations can take to shift towards employee-centric practices. He suggests using ideation workshops similar to customer engagement workshops to gather insights from employees on what matters most to them. An example from Eli Lilly is given, highlighting how they improved employee promotion rates by understanding employee experiences and implementing changes based on those insights. The discussion underscores the importance of collaboration in designing processes that benefit employees and lead to a more engaged workplace.

Show notes

Show Notes:

Stephan Meier, a professor at Columbia Business School, is the author of the book "Employee Advantage." He teaches the business strategy core class, which is required for all MBA students. Stephan also teaches an elective on the future of work, focusing on how treating employees and labor interacts with technology and business strategy. Stephan conducts international trips to African countries, such as Ghana, South Africa, and Kenya, to provide students with international experiences and perspectives on businesses, strategy, and different environments. His focus is on putting workers first to help businesses thrive.

The conversation turns to Stephan's book and the concept of the workplace and business strategy. He mentions how the pandemic brought the workplace under the spotlight and technology use ramped up, while at the same time, Stephan was teaching a class on the Future of Work. The conversation turns to the concept of putting workers first as a key element of business success, and how the business language reveals the mode of managing the employee base. This outlook has led to a large divide between employee and employer. According to Gallup surveys, about 65% of Americans are not engaged at work, and this number is even higher worldwide. Stephan also talks about customer centricity and how employee experience is crucial for both innovation and customer satisfaction.

The Employee First Approach

Stephan cites Jeff Bezos, and Amazon as examples of organizations that prioritize employee satisfaction. Amazon's CEO Jeff Bezos believes that learning from dissatisfied employees can lead to continuous improvement and better business outcomes. This mindset is also seen in other industries, such as Costco in the US, which provides clear career paths, communicates clearly, and promotes internally. DHL Express, for two years in a row, was named the best employer in the world on the best workplaces in the world list for two consecutive years. They put employees first because they realized that turnover is terrible and happy employees are more engaged and leads to satisfied customers. They changed aspects of communication, listening, training, and career path within the organization, leading to financial success.

How the Employee/Customer Centric Approach Wins

Stephan discusses the importance of treating employees well and putting them first at the margin when making trade-offs. He talks about Starbucks, where the company's customer-centric approach has led to a loss of a customer-centric environment. He talks about how this could be improved. Stephan also emphasizes that both customers and employees are critical stakeholders that create value within the organization. Companies that prioritize their employees are more likely to be successful. This is because they have a strong focus on competence, which is encouraged by offering the right tasks that push employees optimally. This is crucial for motivation and retention, as people often leave organizations when they don't learn anything new.

How Successful Companies Prioritize Employees

Stephan states that companies strive to differentiate through a customer-centric approach, but he goes on to explain that the employee-centric and the customer-centric approach are often interchangeable. He offers examples of companies that prioritize their employees including Costco, DHL Express, and MasterCard. Microsoft uses an AI-powered tool called Unlocked, which allows employees to choose projects they want to participate in and matches them with opportunities within the company. This approach not only improves the internal market but also creates a better experience for employees. Companies like KKR, which invest heavily in portfolio companies, implement ownership programs, which give employees stock options as a start. To differentiate between companies that prioritize their employees, companies should consider metrics such as engagement level and turnover rates. By focusing on these early indicators, companies can better understand their commitment to their employees and work towards creating a healthy workplace culture that leads to productive and engaged workers.

How to Build an Employee-centric Workplace

Stephan suggests that companies should start by focusing on what they do with customers and how they do it with employees. They can use ideation workshops to understand customer needs and differentiate themselves from competitors. For example, Eli Lilly applied customer journeys to employees, focusing on their experiences and moments that matter. This approach helped them get more people promoted and had a significant impact on their business. Stephan recommends designing workshops to help employees think about ideas and motivations, as well as redesigning processes and procedures within the organization. By doing so, companies can better understand their employees' needs and preferences, leading to a more engaged, productive, and innovative workforce.

Timestamps:

04:09: Development of The Employee Advantage

04:29: Counterintuitive Claims and Examples of Employee-Centric Companies

12:29: Balancing Employee and Customer Centricity

15:01: Practical Examples of Employee-Centric Companies

19:44: Criteria for Identifying Employee-Centric Companies

23:23: Industry-Specific Considerations

27:30: Consulting Approach for Implementing Employee-Centric Strategies

Links:

Website: https://www.stephanmeier.com/

Stephan's Book: The Employee Advantage

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