Enterprise engagement

Last updated March 03, 2024

Enterprise engagement is a sub-discipline of marketing and management that focuses on achieving long-term financial results by strategically fostering the proactive involvement and alignment of customers, distribution partners, salespeople, and all human capital outside and inside of an organization. Enterprise engagement is distinct from the traditional sub-disciplines of financial management, marketing, sales, operations, and human resources in that it seeks to achieve long-term success by integrating these various traditional business disciplines to consistently focus the organization on identifying and meeting target audience needs.^[1] Enterprise Engagement is related to brand engagement, a term developed in Great Britain in the 2000s to describe an integrated external and internal marketing approach to achieving long-term success for a brand. Enterprise Engagement applies similar principals to the achievement of an organization's overall financial objectives.

Organizations run on the basis of enterprise engagement work collaboratively across departments and divisions to collectively find the best way to achieve long-term financial results by maximizing all human capital, from customers and distributors, agents, or other value-added resellers, to salespeople, employees, and even vendors and shareholders.^[2] This approach unifies the organization around a brand and mission that continually seeks to find better ways to help the end-user customer, enhance the relationship with channel partners, suppliers, and employees and ultimately create new opportunities for the business,^[3] rather than simply finding ways to improve processes. It looks at human capital in an integrated fashion, rather than separating customer and distribution partner engagement from sales or employee engagement.

Traditional organizations have a siloed approach, in which each business area often works quite independently from the other. Each business unit may or may not be directed to have specific goals related directly or indirectly to improving value or service to their audience – whether that be employees, channel partners, vendors or customers. The silos have a tendency to focus on maintaining and improving processes in order to promote their influence and share of resources.^[4] This is demonstrated in the willingness of many companies to sacrifice customer satisfaction to save money on automated telephone answering systems; in this case they have determined that the cost savings of eliminating customer service employees outweighs the benefits of creating a more satisfying customer experience. It is easy to measure the cost savings involved with this decision, but not so easy to measure the impact on customer engagement over time.

While enterprise engagement is related to the field of integrated marketing and has part of its roots there, it is more related to Management in that it requires an integration of all business disciplines across the organization, and therefore cannot be easily organized under one specific sub-discipline of management or another.

History

Enterprise engagement has its roots in research conducted in the 1990s connecting financial results in Sears stores to the engagement of employees.^[5]

In their 1993 book, The One to One Future, Don Peppers and Martha Rogers were among the early proponents of customer-focused rather than product- and process-focused marketing,^[6] and identified the necessity to address the human element of relationships between customers and an organization.

Additional research on the connection between customer and employee engagement began to emerge in 1999, when Gallup published its ground-breaking book First, Break All the Rules by Buckingham and Coffman which was based on a meta-analysis of decades of employee and business outcomes data from over 100,000 employees and a wide range of industries.^[7] They also began publishing studies on the cost of disengaged workers. [see: Would You Fire Your Boss, Gallup Management Journal, Sept. 2007.].^[8] In 2002, a study was released in Great Britain demonstrating a financial link between customer and employee engagement.^[9]

In 1998, A.J. Rucci, S.P. Kim, and R.T. Quinn, authors of "The Employee–Customer Profit Chain at Sears" (Harvard Business Review, 1998), identified a direct connection between employee engagement and profitability in Sears stores.

Separately, in the July–August 2005 issue of the Harvard Business Review, the concept of linking customer and employee engagement that is the distinctive element of enterprise engagement was articulated in an article by John H. Fleming, Curt Coffman, and James K. Harter, entitled "Manage Your Human Sigma.^[9]" The authors wrote, "It’s possible to arrive at a single measure of effectiveness for the employee-customer encounter, this measure has a high correlation with financial performance." Fleming along with co-author

In 2011, David Cameron, then Prime Minister of Great Britain, created the Employee Engagement Task Force "to launch a national conversation about employee engagement right across the private, public and other sectors, with a view to improving the U.K. economy."^[10]

In the meantime, the technical committee responsible for the management of ISO 9000 quality process management issued Quality Management Principles and formal standards 10018 for the quality management of people involvement and competence. The principles and standards include the concept of an enterprise approach to engagement; i.e., a consideration of the need to address customers, employees, vendors, distribution partners, etc., in an integrated way to ensure alignment of priorities and expectations.

In August 2019, the Business Roundtable changed its definition of the corporation to focus on the need to benefit all stakeholders – customers, employees, suppliers, communities and shareholders.^[11]

In fall of 2020, the World Economic Forum issues recommendations for Stakeholder Capitalism metrics.^[12]

In November 2020, the Securities & Exchange Commission requires publicly held companies in the US to report on their human capital practices to the extent they are material to their businesses.^[13] In June 2021, the SEC announced that it would begin the process to enhance human capital disclosures to require more detailed information.^[14]

Benefits

The emergence of enterprise engagement is based on the growing ability of organizations to measure the long-term benefits of engagement in a way that has drawn increasing attention to the subject from leading investors in public companies.

Happy employees are better equipped to handle workplace relationships, stress and change, according to the latest Gallup Management Journal survey. When respondents were asked how they would characterize their interactions with their coworkers, 86% of engaged employees said their interactions were always positive or mostly positive, vs. 72% of unengaged workers and just 45% of actively disengaged workers. (Gallup Management Journal, 2009)
Research by CLC-Genesee and its parent, the Corporate Executive Board, shows that average three-year revenue growth for "high-performing companies" – meaning, in part, those that effectively manage employee engagement – was more than twice that of their industry peers. Other key findings: Engaged employees are more likely to stay with their employer than those who have a lower level of engagement, and the more engaged employees are, the lower the inventory "shrink." (CLC-Genesee/Corporate Executive Board, 2009)
Towers Perrin found that high-engagement firms experienced an earnings-per-share (EPS) growth rate of 28%, compared with an 11.2% decline for low-engagement firms. (Towers Perrin survey, July 2008)
Gallup research indicates that public organizations ranking in the top quartile of employee engagement had EPS growth more than two-and-a-half times greater than organizations that were below average. (Gallup Management Journal survey, 1/12/06)
A 2008 BlessingWhite study found that there's a clear correlation between engagement and retention, with 85% of engaged employees indicating that they plan to stay with their employer for at least the next 10 months. (BlessingWhite State of Engagement 2008 report, April/May 2008)
Data from Best Buy show that stores where employee engagement increased by a tenth of a point (on a five-point scale) experienced a $100,000 increase in annual sales. (CFO magazine, ‘Measuring Up,’ June 26, 2007)
JC Penney has found that store with top-quartile engagement scores generate roughly 10% more in sales per square foot than average and 36% more operating income than similar-sized stores in the lowest quartile. (JC Penney 8-K SEC Filing, April 4, 2007)
A Manpower survey of call center customers and employees revealed that centers with high employee satisfaction also have high customer satisfaction, whereas centers with low employee satisfaction have low customer satisfaction.^[15] (Manpower/SQM Group survey, September 2006)
A report by the Society for Human Resource Management (SHRM) estimates that by strengthening engagement, MolsonCoors saved more than $1.7 million in one year (SHRM ‘Employee Engagement and Commitment,’ 2006)
Gallup research has also shown that engaged employees are more productive, profitable, safer, create stronger customer relationships and stay longer with their company than less engaged employees. (Gallup Management Journal survey, January 12, 2006).
In their 2008 book, Rules to Break and Laws to Follow, authors Don Peppers and Martha Rogers observed that the shift of the balance of power to the consumer will cause organizations to place greater importance on building trust with customers. "The advent of the Internet has shifted the balance of power to consumers, who can move away from a company with a click of the mouse," they wrote.^[16]

Drawbacks

Because of the lack of an agreed-upon nomenclature, framework, and implementation process for engagement, organizations tend to focus on tactical approaches such as "employee experience"; management "civility"; or recognition, benefits, or work-life policies, etc., rather than address engagement on a strategic basis linked to the brand and organizational goals.
Much of the above-cited research suggests that enterprise engagement requires a strategic approach that focuses on yielding long-term results; it is not a business strategy likely to produce a short-term bounce.
Today's organizational structures emphasizing silos and the lack of any place in an organization for a "chief people officer" spanning all audiences – other than the chief executive officer – makes it difficult to get started unless the CEO leads the way.
Enterprise engagement requires the commitment of the chief executive officer and alignment of communications across the organization.^[16]
Enterprise engagement requires leadership, not only at the senior level but also at the branch and departmental level.^[16]
Enterprise engagement is not presently taught in schools or written about in business journals, limiting the number of managers and executives exposed to it.
An organization run on enterprise engagement principles is not immune to the deleterious effects of changing market forces or poor financial management that could undermine an organization with otherwise engaged customers and employees.
There is currently a lack of research documentation as to the relative merits of various types of engagement tactics, or the best ways to deploy them.

Tools of engagement

Engagement involves a broad range of disciplines and tactics. A comprehensive study of what motivates people in business conducted in 2002 by the International Society of Performance Improvement for the Incentive Research Foundation identified the following key factors:

Leadership and culture– the ability of the organization to articulate a culture and vision with benefits to all its constituents.
Communication – the ability of the organization to convey its vision to its constituents.
Capability – the ability of an organization's constituents to do what is asked of them.
Buy-in – the willingness of an organization's constituents to do what is asked of them.
Support – the degree to which people feel recognized by the organization.
Emotion – the state of mind people have related to their work or relationship with the organization.
Measurement and feedback – the degree to which constituents receive feedback for their contribution and to which the organization analyzes results and adjusts accordingly.^[17]

Businesses use a wide array of tactics to address the above issues, including:

Leadership recruitment, training and coaching
Communications, i.e., print, direct mail, and electronic communications, media, meetings, and promotional products
Job design to create variety, flexibility, opportunity
Diversity, Equity, Inclusion (DEI) to maximize the market for customers, talent, supply chains, distribution partners, and communities
Benefits, wellness, and work-life balance strategies
Community and social networking activities
Training and professional development
Recognition, reward, and incentive programs
Statistical process controls and analytics

The expertise, products, and services related to these various practices comprise the emerging field of Enterprise Engagement. Bottom line: Much more research is needed to better understand how these various elements affect customer and employee engagement, and financial results.

Related Research Articles

Customer relationship management (CRM) is a process in which a business or other organization administers its interactions with customers, typically using data analysis to study large amounts of information.

Marketing management is the strategic organizational discipline which focuses on the practical application of marketing orientation, techniques and methods inside enterprises and organizations and on the management of a firm's marketing resources and activities.

Relationship marketing is a form of marketing developed from direct response marketing campaigns that emphasizes customer retention and satisfaction rather than sales transactions. It differentiates from other forms of marketing in that it recognises the long-term value of customer relationships and extends communication beyond intrusive advertising and sales promotional messages. With the growth of the Internet and mobile platforms, relationship marketing has continued to evolve as technology opens more collaborative and social communication channels such as tools for managing relationships with customers that go beyond demographics and customer service data collection. Relationship marketing extends to include inbound marketing, a combination of search optimization and strategic content, public relations, social media and application development.

The loyalty business model is a business model used in strategic management in which company resources are employed so as to increase the loyalty of customers and other stakeholders in the expectation that corporate objectives will be met or surpassed. A typical example of this type of model is: quality of product or service leads to customer satisfaction, which leads to customer loyalty, which leads to profitability.

Organizational behavior or organisational behaviour is the: "study of human behavior in organizational settings, the interface between human behavior and the organization, and the organization itself". Organizational behavioral research can be categorized in at least three ways:

A performance indicator or key performance indicator (KPI) is a type of performance measurement. KPIs evaluate the success of an organization or of a particular activity in which it engages. KPIs provide a focus for strategic and operational improvement, create an analytical basis for decision making and help focus attention on what matters most.

Shareholder value is a business term, sometimes phrased as shareholder value maximization. It became prominent during the 1980s and 1990s along with the management principle value-based management or "managing for value".

In management, business value is an informal term that includes all forms of value that determine the health and well-being of the firm in the long run. Business value expands concept of value of the firm beyond economic value to include other forms of value such as employee value, customer value, supplier value, channel partner value, alliance partner value, managerial value, and societal value. Many of these forms of value are not directly measured in monetary terms. According to the Project Management Institute, business value is the "net quantifiable benefit derived from a business endeavor that may be tangible, intangible, or both."

Employee engagement is a fundamental concept in the effort to understand and describe, both qualitatively and quantitatively, the nature of the relationship between an organization and its employees. An "engaged employee" is defined as one who is fully absorbed by and enthusiastic about their work and so takes positive action to further the organization's reputation and interests. An engaged employee has a positive attitude towards the organization and its values. In contrast, a disengaged employee may range from someone doing the bare minimum at work, up to an employee who is actively damaging the company's work output and reputation.

Brand engagement is the process of forming an emotional or rational attachment between a consumer and a brand. It comprises one aspect of brand management. Brand engagement will impact brand attachment and has a positive influence on customer purchase intentions. Brands can form these attachments through different strategies that will promote their brand and overall customer satisfaction.

Customer engagement is an interaction between an external consumer/customer and an organization through various online or offline channels. According to Hollebeek, Srivastava and Chen S-D logic-Definition of customer engagement is "a customer’s motivationally driven, volitional investment of operant resources, and operand resources into brand interactions," which applies to online and offline engagement.

An incentive program is a formal scheme used to promote or encourage specific actions or behavior by a specific group of people during a defined period of time. Incentive programs are particularly used in business management to motivate employees and in sales to attract and retain customers. Scientific literature also refers to this concept as pay for performance.

Customer retention refers to the ability of a company or product to retain its customers over some specified period. High customer retention means customers of the product or business tend to return to, continue to buy or in some other way not defect to another product or business, or to non-use entirely. Selling organizations generally attempt to reduce customer defections. Customer retention starts with the first contact an organization has with a customer and continues throughout the entire lifetime of a relationship and successful retention efforts take this entire lifecycle into account. A company's ability to attract and retain new customers is related not only to its product or services, but also to the way it services its existing customers, the value the customers actually perceive as a result of utilizing the solutions, and the reputation it creates within and across the marketplace.

Service Climate has been embedded in the research of social climate which relates to the overall group influence of individuals who partake in certain within-group activities. The group aspect of service climate has been compared to atmospheric climate in a way to illustrate its inner distinctive characteristics between different groups of individuals. The social environment has also been related to entrepreneurial leadership within business management and how organizing a group of people can be done to achieve a common goal. Evidence also leads to a rise in research beginning with early social experiments in the 1960s.

A management control system (MCS) is a system which gathers and uses information to evaluate the performance of different organizational resources like human, physical, financial and also the organization as a whole in light of the organizational strategies pursued.

Financial intelligence is a type of business intelligence constituted of the knowledge and skills gained from understanding finance and accounting principles in the business world and understanding how money is being used. Although a fairly new term, financial intelligence has its roots in organizational development research, mostly in the field of employee participation. Financial intelligence has emerged as a best practice and core competency in many organizations leading to improved financial results, increased employee morale, and reduced employee turnover. Many organizations include financial intelligence programs in their leadership development curriculum. Financial intelligence is not an innate skill, rather it is a learned set of skills that can be developed at all levels.

Employer brand is branding and marketing the entirety of the employment experience. It describes an employer's reputation as a place to work, and their employee value proposition, as opposed to the more general corporate brand reputation and value proposition to customers. The term was first used in the early 1990s, and has since become widely adopted by the global management community. Minchington describes employer brand as "the image of your organization as a 'great place to work' in the mind of current employees and key stakeholders in the external market. The art and science of employer branding is therefore concerned with the attraction, engagement and retention initiatives targeted at enhancing your company's employer brand."

Business relations are connections between stakeholders in the process of businesses, such as employer–employee relationships, managers as well as outsourced business partners. The association of businesses began relationships that have been constructed through communication channels such as the likes of telephones, personal contacts, and e-mails. These types of contacts are maintained and deepened through similar channels in internal businesses and organizations.

Employee morale or workspace morale is the morale of employees in workspace environment. It is proven to have a direct effect on productivity.

A social employee is a worker operating within a social business model. Following an organization's social computing guidelines, social employees use social media tools both for internal workflow and collaboration purposes and for external engagement with customers, prospects and stakeholders through a combination of social media marketing, content marketing, social marketing, and social selling. Social employee programs are considered to be as much about culture and engagement as they are about business processes and best practices. In addition to increased leads and sales, social employee best practices are said to improve business outcomes important to social media marketing, such as increased connections and web traffic, improved brand identification and "chatter", and better customer advocacy.

References

↑ "Going One to One: The New Rules of Engagement; Incentive Performance Center at incentivecentral.org, 2007". Archived from the original on 2009-05-23. Retrieved 2009-04-30.
↑ "Manage Your Human Sigma", John H. Fleming, Curt Coffman, James K. Harter, The Harvard Business Review, July–August 2005.
↑ Testing the Internal Marketing Model: An Empirical Analysis of the Relationship between Employee Attitudes, Customer Attitudes and Customer Spending, Don Schultz, Heidi Schultz, Frank Mulhern and Robert Passikoff, department of Integrated Marketing Communications at the Medill School of Journalism for the Forum for People Performance Management and Measurement 2005.
↑ Linking Performance Strategies to Financial Outcomes – The Interaction between Marketing & Human Resources and Employee Measurement & Incentives, Prof. Frank Mulhern and Patricia Whalen of Northwestern University 2004, for the Forum for People Performance Management and Measurement.
↑ Rucci, A.,J., Kim, S. P., and Quinn, R.T., "The Employee–Customer Profit Chain at Sears," Harvard Business Review, 1998, 76 (1), 83-97.
↑ Rogers, Martha; Peppers, Don, The One to One Future, Currency and Doubleday, 1993.
↑ Gallup
↑ Gallup
1 2 Chimhanzi, J., and Morgan, R.E. "Explanations from the Marketing/HR Dyad for Market Competitiveness: A Perspective on Marketing Strategy Implementation Effectiveness and Market Performance in Service Firms," presented at the 2002 American Marketing Association Winter Educator’s Conference
↑ "Our History/Achievements - Engage for Success". Engage for Success. Retrieved 2017-10-08.
↑ Primacy, Updated Statement Moves Away from Shareholder; Stakeholders, Includes Commitment to All. "Business Roundtable Redefines the Purpose of a Corporation to Promote 'An Economy That Serves All Americans'". www.businessroundtable.org. Retrieved 2021-07-04.{{cite web}}: |first1= has generic name (help)
↑ "Measuring Stakeholder Capitalism". World Economic Forum. Retrieved 2021-07-04.
↑ "SEC.gov | SEC Adopts Rule Amendments to Modernize Disclosures of Business, Legal Proceedings, and Risk Factors Under Regulation S-K". www.sec.gov. Retrieved 2021-07-04.
↑ SEC. "View Rule".
↑ SQM Group - Employee Satisfaction for FCR Effectiveness
1 2 3 Rules to Break, Laws to Follow, Don Peppers, Martha Rogers, John Wiley 2008.
↑ Incentive, Rewards, and Workplace Motivation, Harold D. Stolovitch, Richard E. Clark, and Steven J. Condly, University of Southern California 2002, for the International Society of Performance Improvement.

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[1] "Going One to One: The New Rules of Engagement; Incentive Performance Center at incentivecentral.org, 2007". Archived from the original on 2009-05-23. Retrieved 2009-04-30.

[2] "Manage Your Human Sigma", John H. Fleming, Curt Coffman, James K. Harter, The Harvard Business Review, July–August 2005.

[3] Testing the Internal Marketing Model: An Empirical Analysis of the Relationship between Employee Attitudes, Customer Attitudes and Customer Spending, Don Schultz, Heidi Schultz, Frank Mulhern and Robert Passikoff, department of Integrated Marketing Communications at the Medill School of Journalism for the Forum for People Performance Management and Measurement 2005.

[4] Linking Performance Strategies to Financial Outcomes – The Interaction between Marketing & Human Resources and Employee Measurement & Incentives, Prof. Frank Mulhern and Patricia Whalen of Northwestern University 2004, for the Forum for People Performance Management and Measurement.

[5] Rucci, A.,J., Kim, S. P., and Quinn, R.T., "The Employee–Customer Profit Chain at Sears," Harvard Business Review, 1998, 76 (1), 83-97.

[6] Rogers, Martha; Peppers, Don, The One to One Future, Currency and Doubleday, 1993.

[7] Gallup

[8] Gallup

[ReferenceA-9] 1 2 Chimhanzi, J., and Morgan, R.E. "Explanations from the Marketing/HR Dyad for Market Competitiveness: A Perspective on Marketing Strategy Implementation Effectiveness and Market Performance in Service Firms," presented at the 2002 American Marketing Association Winter Educator’s Conference

[10] "Our History/Achievements - Engage for Success". Engage for Success. Retrieved 2017-10-08.

[11] Primacy, Updated Statement Moves Away from Shareholder; Stakeholders, Includes Commitment to All. "Business Roundtable Redefines the Purpose of a Corporation to Promote 'An Economy That Serves All Americans'". www.businessroundtable.org. Retrieved 2021-07-04.{{cite web}}: |first1= has generic name (help)

[12] "Measuring Stakeholder Capitalism". World Economic Forum. Retrieved 2021-07-04.

[13] "SEC.gov | SEC Adopts Rule Amendments to Modernize Disclosures of Business, Legal Proceedings, and Risk Factors Under Regulation S-K". www.sec.gov. Retrieved 2021-07-04.

[14] SEC. "View Rule".

[15] SQM Group - Employee Satisfaction for FCR Effectiveness

[Break_2008-16] 1 2 3 Rules to Break, Laws to Follow, Don Peppers, Martha Rogers, John Wiley 2008.

[17] Incentive, Rewards, and Workplace Motivation, Harold D. Stolovitch, Richard E. Clark, and Steven J. Condly, University of Southern California 2002, for the International Society of Performance Improvement.

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