Unlocking the strategic value of engagement as a driver of business performance
It is getting harder to win. Demands are more complex. Expectations are higher. Goal posts are continuously moving. Doing more with less is becoming the norm.
Change is a constant.
It is becoming increasingly difficult to control the external context in which we operate. Resetting engagement internally and unlocking its value as a strategic driver of performance provides organisations with the asset, the tools, and the readiness, to respond, pre-empt and win.
Whether it is growth or survival, businesses are being forced to change the way in which they operate. Strategic engagement is about leveraging the potential of people to help navigate this change.
For some, it is about entering new markets, or leading the charge for innovation within, and across, sectors.
However, this requires people to be engaged with this mindset. In BCG’s 18th Annual Innovation Study (2024), 83% of companies ranked innovation as a top three priority for them yet just 3% felt ready to deliver on their innovation goals. The study revealed that “Innovation Readiness” across companies has dropped by 17 percentage points since 2022.
For others, it is about streamlining, becoming lean, but ensuring the plates keep spinning.
However, this requires people to be engaged to deliver above and beyond. According to a recent McKinsey study (2023), a lack of engagement and the resulting lack of productivity is costing the average median-size S&P 500 company between $228 million and $355 million a year (or $1.1 billion over five).
Customer expectations have changed. And continue to be shaped not just by your own proposition, but by competitor behaviours and the way advances in one sector almost seamlessly transfer to another.
However, this requires people to be engaged with delivering a complete customer experience that creates loyalty and advocacy. According to a recent Accenture report (2022), nearly nine-in-ten (88%) of executives think their customers are changing faster than their businesses can keep up. What customers value is changing. In the same study, 53% of consumers indicate that the experience a company offers matters as much as the products or services it provides. Almost half, (49%), state that the relationship a company nurtures with its customer base is as significant as its offerings. These are people-led differentiators that depend on having teams of people fully engaged with delivering what their customers want.
Purpose has become a key differentiator in the attraction and retention of customers and employees alike. The stated values of an organisation are continuously put under scrutiny through the lived behaviours. The societal impact of any given brand is now as important a performance metric as financial sustainability and market position.
This requires people to be engaged with delivering on your purpose and the positive impact you can have as an organisation.
In the same study above (Accenture, 2022), six-in-ten (61%) customers note that their loyalty to any given brand is positively affected when a company’s actions and ethics align with their own values.
Furthermore, in order to attract and retain talent, organisations need to ensure their purpose resonates and is made a reality for their people. According to a recent Forbes study (2024), nearly nine in 10 Gen Zs (86%) and millennials (89%) say having a sense of purpose at work is key to their job satisfaction.
Given this context, employee engagement has to be treated as a strategic issue. Engagement is not just about whether people are happy. True engagement is about how connected your people are with the context in which your organisation operates and what you need to do as a business to succeed.
Time and time again, we find C-suite executives surprised (pleasantly) when we ask them to describe engagement as a tool they can utilise to improve business performance.
“What impact can your people have and what are the behaviours that will help you realise these tangible business outcomes?”
Think harder about people metrics, customer experience, financial targets, and societal impact.
A Webinar with our long-serving client, Sara Gomez, Chief People Officer at Lloyd's of London
To hear Sara Gomez, Chief People Officer at Lloyd’s of London, explain how she helped to redefine engagement as a strategic tool that improved business performance, submit the form below. Learn how she managed to rebuild leadership confidence in engagement as something worth investing in and how she utilised the predictive insights from ENGAGE to translate directly into business success.
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Just to be clear, when the team here at ENGAGE talk about engagement, what we are actually talking about is performance. Not just people performance; but business performance.
Why do some leaders fail to see the relationship between engagement and performance? Is it because engagement is thought of as synonymous with a handful of generic, bland survey questions? Is it because the focus on employee surveys (and the industry that has grown up around the software and tools that support these) has caused people to stop asking about the business value of engagement? It is taken as a generic metric that organisations must track but is rarely unpicked in terms of its alignment with what the organisation is trying to achieve.
From a business perspective, this is an opportunity wasted. Business leaders report engagement scores to their stakeholders and invested parties but where is the challenge to engagement as a tangible concept that translates into shareholder value?
From an employee perspective, it is just as bad, if not worse. Individuals want to know how they can contribute and make a difference. They want to feel invested. Defining engagement as a people performance metric that actually brings to life and does justice to what it means to be “playing my part” creates a virtuous circle of contribution, recognition, and shared success.
Here at ENGAGE, we really don’t think this is rocket science. You just need to ask the right questions and apply smart analytics in the way you interpret the answers.
1. Engagement for what?
How do we create better alignment between the way we understand engagement and the business strategy and ambition we are pursuing?
2. Engagement with what?
How can we define and measure the right employee behaviours and mindset in your organisation that captures for leaders and employees what it means to be playing their part?
3. Engagement through what?
How can we better understand the drivers of engagement through a more holistic understanding of the employee experience that encompasses both the strategic and tactical enablers?
The key to realising the value here is the use of smart, integrated, predictive analytics on the data you have – both on the outcomes you are trying to drive, and the employee experience that enables these. If you really want engagement to be a leadership and business priority, rather than just an HR one, you need to apply the type of predictive modelling used elsewhere in the business. It is all about the power of foresight, not just insight. This empowers decision-makers to make informed choices and demonstrates the ROI of equipping people to play their part on harder business performance metrics.
Please do not hesitate to get in touch if you would like to speak to ENGAGE about unlocking the strategic value of engagement as a driver of business performance. Contact [email protected]