1. Executive
Dialogue
Featuring Don Peppers and Martha Rogers, Ph.D.
STRATEGIC FOCUS: Engagement
To Spur Success
Engage and Enable
Employees
Having a clear and concise understanding of engagement is
essential when seeking to improve business performance
Don Peppers
Recognized for over a decade as one
Don/Martha
of the leading authorities on customer-
t here is no lack of buzz around “engagement.” Business pundits are pitching employee
engagement as a cure for all that ails a company. The trouble, however, is that they’re not
all talking about the same thing. A good place to start, therefore, is at the beginning: getting
clarity around what is (and isn’t) engagement. We need a common understanding so that prac-
focused business strategy, Don Peppers
is an acclaimed author and a founding titioners will know the end in mind, will understand the tactics that are tightly aligned with the
partner of Peppers & Rogers Group,
the world's premier customer-centric
goal of enhancing employee engagement, and will be able to track progress against that goal.
management consulting firm that Engagement manifests itself through changes in employee attitudes, such as an increase
provides clients with world-class cus-
in passion toward the job—but, it isn’t just an attitude. Engagement is also indicated by
tomer strategy, flawlessly executed,
for bottom-line impact. improvements in business outcomes, such as reduced turnover—but, it isn’t the same as
those outcomes. Engagement is also sometimes discussed from an organizational perspec-
tive, emphasizing the alignment of the company’s objectives with the
employees’ skill sets—yet, there’s more to it.
“Engagement
Defining Engagement is positive,
“We see engagement—for both customers as well as employees—as proactive
positive, proactive involvement,” explains Don Peppers, founding part-
involvement.”
—Don Peppers
ner of Peppers & Rogers Group. When an individual is engaged with a
company, she or he is involved. Interactions occur, information is
exchanged, operational friction is reduced, and the cost of switching increases over time. At its
highest level, involvement creates interdependency and inextricably intertwined interests; at its
Fay Beauchine lowest level, it fosters independence of a transactional nature.
Fay Beauchine is President of Carlson Involvement is necessary, but isn't sufficient by itself to indicate engagement, on the
Marketing's Engagement & Events part of an employee or customer. For involvement to rise to a state of engagement it must
business. She also serves the industry
as a member of the Executive Com- also be proactive—namely, the individual must be self-motivated and must be the one ini-
mittee of the Enterprise Engagement tiating the participation, setting in motion a sequence of events. A proactively involved
Alliance, President of the National
Business Travel Association Found-
customer may recommend the company’s products to friends or colleagues and take a
ation and Vice President of the SITE personal interest in the company’s success or failure. A proactively involved employee
Foundation (Society of Incentive
won’t wait for management to explain that a problem needs to be fixed—she or he will see
Travel Executives).
the need and solve it now. Involvement with a company by a customer which is largely in
response to a company’s action (e.g., registering for a promotion) is typically beneficial—
but, it isn’t engagement if it isn’t proactive.

2. STRATEGIC FOCUS: Engagement
Finally, the proactive involvement must be of a positive nature—constructive, benefi-
cial, and helpful. The intent of the proactive involvement must be to foster the ongoing
development of the relationship. An employee who is proactively involved in a negative
sense is someone we would classify as "actively disengaged."
“When the two pieces are present—positive, and proactive involvement—customers
and employees are more than satisfied and more than loyal: They are engaged,”
notes Peppers.
Benefiting by Engagement
Engagement is like “potential energy”—it’s energy that is stored in the employee, and is
ready to be used. To convert it into “kinetic energy,” it’s necessary to accelerate from a
state of rest to motion. Achieving that velocity occurs when engaged employees are
enabled—namely, when they have the tools, the training, and the authority to act in the
best interest of the company, without the need to wait for direction from management.
Engaging employees without enabling them will engender frustration,” explains
Peppers, “and enabling them without engaging them runs
Engaged Employees Impact
the risk of having employees who solve the wrong prob-
Most engaged employees see themselves as having the ability to lems (or, the right problems in the wrong way). You must
positively impact critical facets of the business, including quality, have both to realize a business benefit.”
customer satisfaction, profitability, and innovation. “Organizations in the future will be increasingly decen-
% of respondents agreeing with statement tralized, distributed, and dynamic. In this environment, suc-
cess will require heightened levels of agility that can only
Quality of our work/products/services
be obtained through employees who are engaged.
38%
88% Employees who emanate positive, proactive involvement
Customer satisfaction will be required because the rate of change won’t tolerate
42% anything else.” Making it happen begins with a culture that
85% exhibits purpose.
Profitability of my organization
20% The Criticality of Culture
63% “Culture is what employees do when no one is looking,”
Innovation of products/services explains Peppers, “and is founded upon an understanding of
13% the company’s purpose.” When that purpose transcends the
60%
Disengaged basics of business (e.g., ”Become a $125 billion company by
Revenue growth Engaged the year 2000” for Wal-Mart in 1990) to encompass a more
17%
significant transcendent rationale, (“To preserve and improve
59%
human life” for Merck), the ground is fertile for employee
Costs
20% engagement to grow and prosper.
56% “The successful companies of the future will be guided
by a culture which has purpose,” notes Peppers, “because
Source: Closing the Engagement Gap, a Towers Perrin Global Workforce Study (2007-2008) the successful companies of the past have all had this one
overriding characteristic.” In the book Built to Last, authors
Collins and Porras showed that durably successful companies
all possessed a strong culture embodying a sense of purpose. “To achieve that end, begin
by creating a culture based upon earning the trust of customers. How? By treating the
customers the way you would want to be treated,” notes Peppers.
When employees work within a culture having purpose, they know it. At the Coca-Cola
Company, it’s “to refresh the world… to inspire moments of optimism and happiness;”
at ADM, it’s “to unlock the potential of nature to improve the quality of life;” and at Nike
it’s “to bring inspiration and innovation to every athlete in the world.” It takes employees
who are both engaged and empowered to build and sustain these cultures, which
become the firm’s most critical operating asset.
2 © 2009 Peppers & Rogers Group. All rights reserved. 1to1 Media is a division of Peppers & Rogers Group.

3. In this 1to1 Executive Dialogue, Don Peppers, founding partner of Peppers & Rogers
Group; and Fay Beauchine, president Engagement & Events at Carlson Marketing,
discuss the top issues and trends in the discipline of engagement today.
What are the most common misunder- and that they can make a difference in measurement approach can not only miti-
standings about engagement? business today. Companies want to retain gate angst among leaders, but stimulate
their best employees to take care of busi- enthusiasm for employee engagement
DON PEPPERS: People believe that any-
ness. When the economy improves, and its benefits.
thing positive represents engagement
employees who feel disengaged will jump
(e.g., a positive attitude or customer loyal- What are the top trends in the discipline
ship the first chance they get, leaving their
ty). If you have engaged employees and of employee engagement?
employers struggling to maintain an effec-
customers, you’ll get those outcomes—
tive workforce. FB: One trend is the ongoing challenge of
but, that is not what engagement means.
finding impactful, meaningful ways to
FAY BEAUCHINE: It’s commonly believed show appreciation that are budget-con-
that engagement is meaningless jargon scious and socially acceptable. Companies
“Engagement impacts every have to be aware of outside opinion and
and can’t be measured. Both are false.
Employees engaged in their work experi- employee in every department. influences. Another trend is the expanded
ence a strong connection that taps into To be most effective, the use of technology to achieve engagement
emotional and rational efforts, their hearts engagement solution needs goals—through vehicles like social media
and minds. These efforts lead to greater to be designed to best suit and virtual meetings.
results measured by traditional metrics each audience.” — Fay Beauchine
(productivity, retention), as well as differ- And, looking back, what is the single
ent approaches (macro rather than micro, most important change in the discipline
delayed rather than immediate effect). that has occurred over the last five years?
Creating, maintaining and enhancing FB: The most important change is all the
What are the most effective ways in which employee engagement isn’t necessarily research that proves how critical engaged
companies are making the business case easy. What are the top challenges or employees are to an organization’s bottom
for investments in employee engagement? obstacles that most often inhibit success? line. We recognize that technology, process-
DP: It’s difficult to convince a CEO to give DP: First, it’s short-termism—the malady es, and machines are all commodities.
up $1 of quarterly earnings per share for that causes businesses to place an undue Employees are not.
some unspecified benefit in shareholder emphasis upon today at the expense of
value later. But, if you realize that cus- tomorrow by harvesting customer equity What role does technology play in making
tomers are the key asset creator then for immediate gain without considering an employee engagement solution
creating value today as well as value how to replenish and grow that asset. successful?
tomorrow through changes in their like- Second, it’s the belief that we can buy
FB: With the right strategy and the right
lihood to repurchase and recommend— employee loyalty. In fact, the most impor-
tools, technology can be helpful and even
it makes it easier to overcome the crisis tant things for the best employees are
critical in many business situations. This is
of short-termism that plagues too many intrinsic in nature.
especially true for large-scale efforts
companies today.
FB: The question points out an excellent where technology provides the infrastruc-
FB: Companies understand that they need reason for working with experts in the area ture for efficient execution. Online or web-
employees to take care of their customers of employee engagement—it’s not easy based recognition programs (peer-to-peer,
and that engaged employees take care of and it’s good to have a solid coach in your manager-to-peer), incentive program com-
their customers better. Consequently, they corner. The biggest challenge to overcome munications and tracking, and virtual
are investing in employee engagement as is leadership’s lack of understanding and meetings for recognition all benefit from
a remedy to the issues facing most com- commitment to the value of engaged the marvels of technology. Every year we
panies today—the economy, layoffs, and employees. That’s followed by short-term see refinements in capabilities within the
doing more work with fewer people. It thinking and the unfamiliar territory of technology realm, as well as acceptance of
serves as a reminder to employees that engagement measurement. A long-term new approaches and tools within the
they and their contributions are valued success strategy buoyed by a well-defined workforce.
3

4. STRATEGIC FOCUS: Engagement
Is employee engagement applicable to fully engaged? It would be valuable to
all organizational functions—or, is it best know how to hire employees who are
to limit its focus to customer-facing not only engaged themselves, but have a
departments? propensity to get other employees fully
engaged, too.
DP: Employee engagement is applicable to
all organizational functions. In many com- FB: The most important unanswered ques-
panies, only a small minority of employees tions are how various elements of an
Result are actually customer-facing. They are,
however, supported by a majority of inter-
engagement program (training, communi-
cation, recognition, incentives, etc.) affect
Rundowns nal colleagues. Only when a strong culture
of engagement runs throughout the entire
the outcome and what is their cumulative
effect. We’ve made great headway in the
company can it be sustained.
• Adding learning opportunities decision sciences (analytics) area in isolating
into a program doubles the level the variables and we can tell for a specific
FB: Engagement impacts every employee
of engaged participants. program what works and what doesn’t.
in every department. To be most effective,
We’re constantly analyzing data to gain
the engagement solution needs to be
• When a manager is engaged and designed to best suit each audience. Front-
insights that will allow us to predict, in any
recognized, there is a 75 percent situation, what elements and at what cost
line employees have different goals than
increase in participant engagement. will provide the greatest impact. I
support staff; sales people have different
expectations than others in the organiza-
• By improving engagement with
tion. Employees in different countries are
employees in an automotive
company, customer satisfaction motivated differently. This all should be
“The biggest challenge to
was increased by 5 percent. factored into an engagement program
strategy and design. overcome is leadership’s
Source: Carlson Marketing lack of understanding and
What’s the single most important
commitment to the value
unanswered question about employee
engagement today? of engaged employees.”
— Fay Beauchine
DP: Is there a way to identify individuals
who are most susceptible to becoming
Carlson Marketing is the world’s leading relationship building company. As the largest inde-
pendent agency in the U.S. and the 13th largest marketing company in the world, Carlson
Marketing designs and delivers loyalty and engagement programs for some of the world’s best
known brands. Carlson Marketing’s two global service offerings—Engagement & Events and
Brand Loyalty—are supported by six core capabilities: Strategy & Brand Planning; Creative and
Visit www.carlsonmarketing.com
Communications; Decision Sciences; Award Services; Technology Services and Customer Service.
Carlson Marketing employs 2,500 marketing professionals in 45 cities across 16 countries.
Peppers & Rogers Group is dedicated to helping its clients improve business performance by
acquiring, retaining, and growing profitable customers. As products become commodities and
globalization picks up speed, customers have become the scarcest resource in business. They hold
the keys to higher profit today and stronger enterprise value tomorrow. We help clients achieve
Visit peppersandrogersgroup.com these goals by building the right relationships with the right customers over the right channels.
We earn our keep by solving the business problems of our clients. By delivering a superior 1to1
Strategy, we remove the operational and organizational barriers that stand in the way of profitable
customer relationships. We show clients where to focus customer-facing resources to improve the
performance of their marketing, sales and service initiatives. To continue the conversation with Don,
visit his blog: www.peppersandrogersgroup.com/blog/
4 © 2009 Peppers & Rogers Group. All rights reserved. 1to1 Media is a division of Peppers & Rogers Group.