In the past few blog entries, I have alluded to a gargantuan project that has monopolized my attention for the past several weeks. I am finally done and am well on the way to recuperating (in case anyone needed to know).
As I take off my scientist hat and put on my marketing bonnet (please tell me that’s a funny visual), I find myself reflecting on the things I have learned as a result of this experience. Since the nature of my self-enrichment is congruent with the topics I discuss on this blog, I thought I would share them with my trillions (yes, trillions) of readers.
Though I cannot go into the details at this point, I can say I was privileged with the opportunity to swim in the ocean of data provided by one of our prized clients. I was able to probe databases containing employee attitudes, customer satisfaction, employee behavior and financial performance. As is often the case, the analysis raised more questions than it answered. However, one result I am very confident in talking about is the link between employee attitudes and customer satisfaction. Mirroring the results reported in recent research (check out my blog entry about the link between job satisfaction and customer satisfaction on my other blog), results demonstrated that business units with greater proportions of satisfied and engaged employees have higher levels of customer satisfaction.
I know this makes intuitive sense. I do not accept, however, that intuition or (or many years of experience) should take the place of hard, verifiable numbers. When a bank extends a loan to a business, they do so on the basis of verifiable revenue projections, not because the underwriter had a “good feeling” about the name of the business. Similarly, when an organization considers a new product line, it uses the best data available to predict market share, price elasticity, projected revenues over the life of the product, etc. The decision to launch one product over the other should be based on these data, not on an executive’s gut feelings.
The world of human capital should be no different. Sadly, too often we use the “common sense” standard to make decisions in this realm. Introducing a new human resources intervention, pay structure, bonus plan or training regimen means the organization is investing capital (both financial and human). It makes sense to try to determine what return it can expect on its investment.
The report I just finished compiling for my client contained a number of instances where their common sense predictions were not borne out by the data. I am confident that the results of my analysis will help my client reallocate their resources. In my experience, too many organizations make human capital decisions without the due diligence they would extend to virtually any other investment. Organizational interventions are not about common sense; sometimes they feel like it, and other times they don’t. Humans seldom notice when decisions they make on the basis of common sense didn’t work out as expected; common sense is not correctable and is usually only accurate in “predicting” things that have already happened.
Here’s the bottom line: Organizations can make human capital decisions in one of two ways (yes, this is an artificial dichotomy). We can guess what things we can do to boost productivity, customer satisfaction, margin per transaction or revenue per FTE. Or, we can be a bit more responsible and analytically determine what aspects of employee attitudes are most likely to have a positive impact on the outcomes you need enhanced. This is particularly the case in a shaky (if recovering) economy. If it makes you more comfortable, don’t call it research, don’t call it psychology. Don’t even call it science. Call it due diligence, but do it.
I applaud my client on the path they have chosen. I am grateful they have selected me to guide them. It is not an easy path to tread, but it is one with tangible returns. We owe it to our shareholders and all the other stakeholders that count on the quality of our decisions. For those of you out there who are curious about how to perform this due diligence for your organization, keep reading this blog. Better yet, have your people call my people =)
