Archive

Archive for the ‘Chief Executive’ Category

Engagement is Key to Meeting Strategic (and, therefore Financial) Goals

August 6th, 2009 Comments off

Throughout the course of Acct 320, we come back time and again to the Balanced Scorecard model and the idea that improvements internally in things like employee relations and internal business processes eventually “bubble up” to improve the customer experience and the financial measures of a company.  Reinforcing that concept is a great piece that I found today at chiefexecutive.net that focuses on employee engagement and the impact that improving it can have on a company’s bottom line.  The article specifically mentions Best Buy in an example of this concept.

Best Buy was able to demonstrate that an increase in engagement among its store employees of 0.1 percent on a 5 point scale resulted in an annual profit increase of $100,000 for their store. If you really believe that your employees are the lifeblood of your company then your employees are an integral part of your brand equity.

In fact, employee engagement can be a piece of the puzzle in terms of differentiating your company/product from that of others.  As I have mentioned in class, with the vast amounts of information available to us as consumers via the internet, nearly every product trends toward becoming a commodity.  Something needs to be done to stand out in this environment so that you are able to charge the premium necessary to have brick-and-mortar operations when companies operating in the virtual world obviously have lower costs…employee engagement can help with that.

Aren’t you interested in growing the value of your customers, and in so doing increasing profitability? Engaged employees make a positive contribution to the bottom line. Disengaged employees with no emotional connection to the business or the customers negatively impact profitability.

The internet has created a global marketplace where much of what businesses produce can be commoditized. Today customers are just a click away from access to a number of alternatives if they are unhappy with a brand experience. In addition, social networks and blogs allow unhappy customers the ability to broadcast their unhappy experiences to consumers around the world.

Read more of this excellent piece including some discussion about aligning compensation with strategy at the link below:

The CEO’s New Strategic Imperative – Engagement