What employee engagement looks like at a company that depends on digital technology excellence
In a recent interview with the technology head of such a company, I uncovered some nuggets that the not-so-digitally-inclined can learn from and use to improve employee engagement and profits.
I recently talked with Jim MacLennan, SVP and Chief Information Officer of IDEX Corporation, a $2.5 billion industrial manufacturing company. Though not a household name, IDEX has likely impacted your life or community because they manufacture a broad array of components used in larger, better-known products. For example, they manufacture about 60% of the components on a fire truck, plus the electronic core of the truck that ties it all together. And they make other products ranging from clamps that hold airbags in place to components used in DNA sequencing. Very sophisticated parts, very complex designs, and very information-rich solutions that save their customers tons of time and money.
Delighting customers through digital expertise
IDEX has a number of business units where digital expertise is highly valued and is an integral part of their culture as well as their strategy. With their digital expertise, they design and manufacture components and infuse them with information technology that acts together as an intelligent system. Their technology expertise matters to the external world, so they take special care to hire, train, and retain highly-skilled digital experts.
From an external perspective, the company strives to use technology to do obvious things like making connections to customers and enhance products with digital information. But amped-up technology is also a huge part of IDEX’s internal workings.
Applying digital expertise for better employee engagement
As counterintuitive as it may sound, having a deeply digital workplace relies ultimately on your people. Engaged employees will provide a lot more value – at far less cost — than employees who are only moderately engaged, or even disengaged.
Jim presents four practical ways to improve employee engagement through the use of digital technology:
- Knowledge dissemination: Don’t just rely on those one or two experts who have the really deep product or customer knowledge. Use digital technology to make that valuable information available to the many, not just to the few. Online forums, digitized lessons learned, and other electronic resources help employees satisfy strong human drives for learning and achievement.
- Skill-building: An often overlooked benefit of digital technology is to help build complex skill sets in novices as well as experts. Train multiple people in the skills that make disruption and change possible. Get people up to speed with new complex products. Digitized training for selected, appropriate topics can bring large numbers of people up to speed quicker than old classroom methods of instruction that relied on a single expert at the front of the room, and her availability and ability to teach!
- Process streamlining: Employees who come to work and feel they got a LOT done in a day feel much more motivated than those who just feel they got a little accomplished in a day. Use digital technology to remove human, error-prone tasks, and also make decisions based on tried and true algorithms, versus agonizing over an analysis that a computer could do flawlessly in nanoseconds.
- Values and culture shaping: A clearly defined culture with its associated values and behaviors provide guidelines and not-so-subtle expectations about how employees should act during the course of the day. Technology can provide guidelines and guardrails for key culture aspects such as the expected amount of collaboration and inclusion of diverse viewpoints.
Obviously, these are all good ways to keep costs lower than the competition. But really smart companies like IDEX capitalize on these in a nuanced implementation beyond addressing just the cost part of the financial equation – they look for ways to apply them to increase employee engagement.
How to justify the cost of employee engagement efforts
IDEX is a company that prides itself on having a performance-based culture. In the industrial sector, it’s important to have a healthy return on investment to ensure long-term survival. In Don’t Think So Much, Jim’s landmark book on digital transformation, he makes a huge point of coaching IT professionals to cost-justify their projects. Hard dollars and cents. Without a comparison of costs and benefits, he cautions IT managers should not even think about presenting a project to senior management for consideration.
When I asked how IDEX cost-justifies its employee engagement efforts, I was surprised at Jim’s response. I expected he might fall back on one of the historical justifications, such as engagement. Such as:
- The cost of replacing front-line employees is 75% of their annual salary.
- The cost of replacing a manager to senior manager can range from 1.5 to 2 times their annual salary.
- Gallup’s reporting work units in the top quartile of employee engagement outperform those in the lower quartile by 21% in terms of productivity.
- An engaged workforce reduces the cost of poor quality.
But Jim didn’t mention any of those. He shocked me by saying that they don’t cost-justify employee engagement efforts. Not at all. He said that as part of the culture, they “buy into the fact that engaged employees will perform better, pay attention to the customer, and focus on the highest impact for their effort.” Wow. What an amazing perspective. And what an advanced corporate culture.
How to make sure you’re on track with employee engagement
Just because a company doesn’t cost-justify the benefits of spending money on employee engagement doesn’t mean measurement is not involved. Especially with a self-proclaimed performance culture like IDEX’s. IDEX does track employee engagement levels to make sure they stay in the top quartile of performance. If there’s some slippage, they catch it and take corrective action because they’re measuring it.
And with a shifting labor force, this tracking is important. Jim, who is a frequent speaker at IT conferences and symposia, mentioned that just four years ago millennials comprised 30% of the workforce, while today they make up just slightly over 50%. One big issue is that for firms in the industrial sector like IDEX, decisions are often made at a much slower pace than millennials are accustomed to from their college and other life experiences. In order to keep that young, diverse, tech-savvy group in their workforce and actively contributing, a company must make other aspects of the workforce very desirable, and tracking employee engagement is one key way to ensure that demographic is not viewing IDEX’s competing hiring managers with a roving eye.
Leadership acts enhanced by digital technology
Just as employees perform differently in a highly engaged workplace, leaders act differently in one. Jim talks about three important leader tasks to enhance employee engagement, and the fact that even these heavily-based human behaviors can be enhanced by digital technology:
- Vision creation: Inputs to the vision from many sources can be achieved (in 2006 IBM conducted an “innovation jam” that collected new ideas for bringing IBM products to market faster from more than 150,000 IBM employees, stakeholders, and vendors). After a vision has been developed, a final vision can be cost-efficiently spread to enroll people using digital means.
- Great employee interactions with their manager: Confidential feedback for both manager and employee can be provided through digital means, and help the development and performance of both.
- Employees having the tools they need to do their job: think about what simple electronic tools might be provided, or training might be provided to enable more to get done on a daily basis. (In the course of a single day how many work hours of people fumbling through Excel might be perceived by experts as a gross waste of time? With some automated training, much of this waste could be eliminated in your company.)
So, is it possible to inject some digital juice into your employee engagement efforts, even if you’re not a highly advanced player in the digital field?
Apply this employee engagement approach to your efforts
In conclusion, any organization can use these tips to amplify its employee engagement efforts. Equip leaders with additional digital capabilities for vision creation, manager interactions, and giving employees the right tools will help your organization to become a force to be reckoned with in your industry.