The Emerging Field of Enterprise Engagement: Implications for HR
by Bruce Bolger, Managing Director, Enterprise Engagement Alliance

The term “engagement” has become increasingly popular in human resources, talent management and marketing circles. Dozens of professional conferences have focused on the topic over the past few years produced by organizations as diverse as Marcus Evans, Human Capital Institute, and the Conference Board.. The term is being used in reference to employees, customers, training, and communications and, most recently, in social networking circles. The emergence of engagement presents both opportunities and challenges for the human resources profession.

While it is has always been possible to implement the principles of engagement at the tactical levels of human resources and marketing, what is changing is the increasing number of CEOs committed to implementing engagement at the strategic level. Organizations as diverse as McDonald’s, AstraZeneca, Hewlett-Packard, Best Buy and Nationwide Insurance are all in various stages of undertaking strategic engagement initiatives designed to align their brands across all of their audiences to maximize loyalty, engagement and performance.

Moreover, a growing number of leading corporations now have executives and managers with “engagement” in their title. Engagement has become the subject of a growing number of blogs, and companies like EGR International, JWT INSIDE (a division of JTW Worldwide) and StratAchieve now market themselves as “full-service engagement agencies.”

Why Now
Engagement has emerged as a growing executive priority because it is now increasingly possible to measure the financial impact of engagement on an organization’s performance and brand equity. And it has, therefore, become a human resources priority as well.

Today, the financial benefits of engagement are too compelling too ignore:
• Average three-year revenue growth for “high-performing companies” (e.g., those that effectively manage employee engagement) was more than twice that of industry peers; engaged employees are more likely to stay with their employer than those with a lower level of engagement; and the more engaged employees are, the lower the inventory “shrink.”(1)
• When workers were asked how they would describe relationships 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.(2)
• High-engagement firms experienced an earnings-per-share (EPS) growth rate of 28%, compared with an 11.2% decline for firms with low levels of engagement.(3)
• Public organizations ranking in the top quartile of employee engagement had earnings per share (EPS) more than two-and-a-half times greater than organizations that were below average.(4)
• Beyond the research, the popular CBS television series “Undercover Boss” has in its own way contributed to the growing awareness that there is a direct connection between a company’s leadership, employees and impact with customers.

The Center of Gravity
Engagement has the potential to do for human resources what talent management helped accomplish in the last decade: continue to move human resources up the organizational value chain from “cost center” to “profit center.” When organizations view their employees as critical to their brand, it raises both the opportunities and stakes for those in charge of internal communications and engagement. True “enterprise-wide” engagement, like that practiced by the companies mentioned above, includes a cross-functional team of top management representing all parts of the company to ensure alignment of the core message with communications, training, rewards and other key components.

The question is, who should drive implementation? Because enterprise engagement involves customers and channel partners as well as employees, the answer isn’t always so simple. Whoever leads the charge has to carefully bridge two critical areas of business that don’t have a great overall track record of communication and cooperation – HR and marketing. Engagement leaders must have a firm grasp of a wide array of engagement tactics and how they need to be carefully woven together to address each particular situation.

From Strategic to Tactical
Of course, the human resources manager doesn’t have to wait for corporate leaders to embrace enterprise engagement in order to profit from the basic premises. The principles of enterprise engagement apply equally to such tactical initiatives as wellness, incentives, recognition and innovation programs and this is where HR managers and executives can shine.

At a recent Marcus Evans conference on Open Innovation held in Philadelphia, Sarah Coulter, Group Manager of Home Care Product Development for Clorox, spoke about how engagement is used to foster idea generation. “We want to move from the old, serial way of getting ideas to a more global way of collaborating,” she said. “Yes there are issues around intellectual property, confidentiality, privacy, change, cultural norms, control and more, but there is also an emotional side that shouldn’t be ignored.” Her organization’s engagement efforts deploy the same elements as those of her counterparts who spoke about such ideas at a similar conference on Internal Branding and Engagement: communication, learning, rewards & recognition and measurement.

In other words, whether or not your organization embraces engagement at the strategic level, all managers – particularly human resources and talent managers - can benefit from understanding engagement and how its various tactics can most effectively address specific issues such as increasing sales, boost productivity, improve quality, heighten retention, encourage referrals and more.

Reality and Challenges
In reality, it’s easier to apply enterprise engagement at the tactical rather than organizational level, where there are a number of serious obstacles, especially in larger organizations:
• Research suggests that enterprise engagement only works over the long haul; it’s of little use to executives seeking a short-term fix;
• Today’s organizational structures are based on silos that obstruct enterprise engagement – it takes a leader committed to cross-functional implementation to get the job done;
• Enterprise engagement does not make a company immune to economic swings or poor financial management;
• Many organizations have decades of labor mistrust that may sour the climate for engagement; and,
• Companies often lack the research and documentation as to the merits of various types of engagement tactics and the best ways to deploy them.

In case study after case study, one hears management use the word “journey” to describe the deployment of their organizations’ strategic engagement efforts because they are operating in uncharted waters. They know the potential rewards in terms of earnings and even share price over time; what they don’t know are the best deployment practices. “A strategic effort starts with building engagement into the brand architecture and that very much includes people,” says Jeff Grisamore, President of EGR International.

Bruce Bolger, Managing Director of the Enterprise Engagement Alliance (www.enterpriseengagement.org), was an early proponent of integrated, targeted communication, marketing and sales programs to better engage customers and employees. He helped found the Forum for People Performance Management and Measurement at Northwestern University’s Medill School of Journalism and was one of the founders of the EEA, which is creating a formal curriculum and certification program on enterprise engagement. Mr. Bolger is also the author of two books, Principles of Results-Based Incentive Program Design and Strategic Incentive Program Design: Critical Steps to Ensure an Effective Performance Improvement System.

Notes:
1. CLC-Genesee and the Corporate Executive Board; 2009
2. Gallup Management Journal; 2009
3. Towers Perrin survey; July 2008
4. Gallup Management Journal survey; 1/12/06