How & why to use employee incentives / recognition to improve customer or client experience, satisfaction, & eliminate the culture of personality in leadership.
While there are different schools of thought on employee recognition and rewards, one thing is for sure: the effectiveness of each depends on how, when and why you use them.
Richard Branson, the founder of Virgin Group, has argued that organizational culture has to be all about employees because if you treat them right, they will treat the customer or clients right. Certain organizational development practitioners would extend that thought and say that great culture is about aligning tasks to strengths and personality types. Corporate governance experts argue that corporate culture and incentives need to be aligned with creating shareholder value. Others, including the Lean Institute argue that the purpose of any for-profit organization is to create value for the customer so the organization can prosper. Who is right?
The purpose of the organization, what it stands for and its core values need to be recognized and rewarded. While profit and shareholder value are also outcomes to be rewarded as well, they are just outcomes of delivering value to a market. The main purpose for organizations must be as Lean defines it, delivering value to its customers and clients.
Without customers and clients organizations cannot exist. One cannot deliver shareholder value creation with increases in outcomes across a variety of financial metrics without winning paying customers and clients. Satisfied customers, return to buy more, send referrals and tend to have lower levels of returns and/or complaints. This clearly impacts financial outcomes.
Competition requires innovation to continually bring better products and services to the market. One could even argue that in a representative government, failure to bring value to citizens is rewarded by your competition winning the next election.
Creating a Culture of Purpose
We also believe that organizations who focus mainly on employees and not customers and clients, create a culture of personality around recognized employees and leaders. While attracting and retaining highly skilled and competent people is critical to an organization, focusing internal stakeholders too much on superstar employees or leaders diverts attention from the true purpose of an organization- creating value for the end clients or customers (key stakeholders). A culture focused on customers and clients is sustainable and also not as vulnerable to key person risk. For governments, this means its citizens are the key stakeholders, for non-profits this means the end target population are the key stakeholders, and for for-profit organizations, this means the clients and customers are the key stakeholders.
The majority of reward and recognition programs should revolve around creating value for these key stakeholders. Even qualitative employee reviews in our view need to be mainly focused on how the employee’s behavior aligns with delivering value to the key stakeholders. This means being a good team member, performance of job requirements, etc. should center around how and if that employee played a role in value creation for the key stakeholders. All employees should be versed in the value the organization delivers to key stakeholders and those key stakeholders should be the focus of all corporate events, recognition ceremonies and rewards etc. Leaders must tie out how core values, company credo and vision etc. manifest in creating customer or client value. Leaders must articulate the higher vision of the organization is to make the lives, world or community, better for key stakeholders.
Using a Team's Purpose to Deliver Value to Key Stakeholders
Remember we define key stakeholders as those stakeholders for whom the organization exists. All other stakeholders, employees, owners etc. derive their benefits, salary, bonuses, commissions, and increase in shareholder value, when all are focused on delivering value to the key stakeholder group. This is not to say organizations should not hire and build teams around competencies and individual strengths, it's just to say team building should have a purpose, delivering value to the key stakeholders.
In summary, your organization grows more resilient and depends less on key people, if your organizational culture stays focused on the end client or customer as the key stakeholder. Celebrate changing lives and adding value to key stakeholders, and recognize employees and team members who play their part “very well” in that value chain. Recognize employees who embrace that core purpose, and you will enhance camaraderie, morale, teamwork. You can then also more effectively practice emotional intelligence. We still advocate hiring and training for soft and technical competency. With core purpose at front of mind however, you can lead less through deciphering, evaluating and celebrating personalities and more through gaining buy-in and celebration for your organization's core purpose. You can then focus your leadership and culture initiatives on alignment of all organizational behavior to that core purpose, instead of navigating silos and the latest office clique.
About the author
About the author: Ken Greenberg, has extensive experience as an Organizational Development Professional, Investment Banker and a Private Equity Professional. Prior to joining Auctus Search Partners, LLC as a Senior Managing Director focused on Executive Recruiting for C-Level positions, Ken was the founder and CEO of KLG Consultants, LLC, which was acquired by Auctus Search Partners, LLC in November of 2016.