JoyFX: We Are Wrong About Employee and Customer Engagement
Updated 10.30.22
Experts use the concept and term of engagement to address the relationship between a stakeholder and an organization. Employee engagement is an employee’s emotional commitment to the employer’s strategic goals. Similarly, customer engagement is the emotional connection between a customer and a brand. Ultimately, the goal is to motivate the employee and customer to go above and beyond for the company.
After three decades of entrepreneurship, management, and consulting, I’ve concluded we’ve gotten it all wrong regarding employee and customer engagement. Furthermore, it’s spurned me to deconstruct my mental models and how I help organizations.
The journey to this conclusion started with the global pandemic, which catalyzed a trendy acronym: VUCA. VUCA is short for volatility, uncertainty, complexity, and ambiguity. And VUCA has become a fancy way of triggering questions and conversations as we ask, “What the heck is going on?” and “How do we figure out what to do about it?”
VUCA is much more complex in application than its popular usage today. But one thing is certain: nobody predicted the full magnitude of how volatile, uncertain, complex, and ambiguous the world would become. From the Great Resignation (employment), the Great Dropout (academics), and the Great Reset (economics), companies have no choice but to change or face dire consequences. The “everything bubble” has burst. Look at soaring inflation, rising interest rates, and initial public offerings sinking to the lowest rates since the Great Recession in 2008.
Despite the doom and gloom, some companies thrive while their counterparts barely survive. I’ve met founders of innovative startups with contrarian views, growing revenue, and investor funding. Certain established companies are winning the talent war with a different approach to their employees, while other employers are paying exorbitant recruiter fees, only to see a downward trend in performance, retention, and engagement, especially amongst Gen Z.
What makes these thriving organizations go against the grain and buck the trend differently? After research and reflection, I have three investment theses to challenge where we’re wrong about customer and employee engagement.
Investment Thesis 1: Customer and Employee Engagement Must Become One Brand Strategy
To succeed, it’s not enough to get customers to fall in love with your brand—employees must live your brand at the same time. If your employees don’t exemplify your brand promise and personality at every touchpoint and step of the organizational process, then it doesn’t matter how hard you try with customers.
To up the ante, marketing and HR should form one strategic organization development department (HR administration should merge with accounting). Instead of a distinction between the customer brand and employer brand, they should consolidate into one overarching brand strategy. By keeping them segregated, as most organizations do, the right hand has no clue what the left hand is doing, with both eventually handcuffed by mediocrity.
When an employee loves your brand like the ideal customer, and the customer owns your brand like a super employee, the entire organization becomes more than a bunch of workers delivering a product or service in exchange for a customer or client’s money.
How is this thesis remotely possible? This strategy will fail in my experience (believe me, I’ve tried). To ensure success, you need two more investments.
Investment Thesis 2: Organizations Must Shift from Diagnostic-First to Dialogic-First
A diagnostic approach is like going to the doctor to fix a health problem. Similarly, organizations hire expert consultants to diagnose an issue and then recommend a best practice. In other words, they’ll figure out what/why/how something is “bad” and help you make it “good” based on their promised (self-promoted) expertise. But while a diagnostic approach may work with technical problems, today’s VUCA challenges, especially with employees and customers, are far too complex and adaptive.
After spending a decade touting diagnostic methodologies and tools (I even built software to diagnose employee motivation and organizational culture), I was introduced to the field practice of organization development, which distinguishes between diagnostic and dialogic. At first, dialogic completely contradicted my diagnostic ways, but I was immediately hooked once I got over myself. This new approach became the “Yin to my Yang,” with profound results in my professional and personal life.
Without boring you with theory, I define dialogic as it sounds: finding logic in a dialog. In other words, a dialogic practitioner believes how we speak about something determines our reality. One of my mentors always tells me, “Ed, we live in our words.” And as you can imagine, everybody speaks about the same things (often drastically) differently. Therefore, to change something, such as within an adaptive challenge in an organization, we must first change how we speak about it.
Returning to our doctor analogy, instead of a diagnostic expert telling you that you’re unhealthy, the dialogic approach would be asking how you define health first. From there, the doctor and patient could co-create an approach that works for everyone. You may think that a doctor is paid to diagnose a patient accurately without necessarily needing conversation, and you’re right. But we’re talking about change.
The truth is that even after an accurate medical diagnosis such as obesity, most people are not motivated toward sustainable change because the conversations around body image are widely different. Perception creates reality regardless of what may or may not be considered the scientific “truth.” And perception is a dealmaker or breaker when it comes to change.
The technical act of diagnosis is not the issue. The adaptive way we approach the necessary steps of change has become an adaptive issue for the organization. Moving to a dialogic-first approach is the answer.
When coaching startups, we teach a process called idea validation and customer discovery rooted in a dialogic approach. A founder interviews potential customers and listens openly before assuming a particular solution will work. This step happens before anybody invests and builds a solution because initial assumptions about the problem and potential solution are usually wrong. And that’s how startups become disruptive by creating innovations that change customer behaviors, even creating entirely new business categories.
Despite the proven success of the startup way, many established (entrenched) companies take the opposite diagnostic approach. They start with their opinions and assumptions of what’s good or bad for customer engagement—usually driven by shareholders and the stock price—only to be proven wrong as product initiatives faceplant their way to market failure. But even worse, this diagnostic mindset spills into employee engagement. Traditionally, the employer sets the standard of good or bad, diagnosing and managing each employee accordingly.
The days where employee performance is diagnosed, with the top tier promoted and the bottom fired, ala Jack Welch’s “rank and yank” model, are obsolete. The Great Resignation results from millions of employees having different conversations about why they work for certain companies. And, coming full circle, customers are doing the same regarding their buying decisions.
But for a dialogic process to succeed, we need one important emotion.
Investment Thesis 3: Joy Will Become a Secret Advantage
While many executives and managers may balk at forming one strategic department for employee and customer engagement, a few more, especially the “experts,” can’t seem to turn the corner of moving from diagnostic to dialogic. But when I get started on the emotion of joy, I often receive some perplexed looks and pushback.
Take a risk with me for a moment here.
If the optimal strategic outcome is an emotional commitment from our employees and customers—motivating them to go above and beyond—there’s one critical question: which emotion works best?
Unfortunately, organizations have recognized that fear and anger are the best emotional motivations, at least for short-term results. Even more troubling is that as competition grows, fear and anger are amplified to terror and outrage as a tactic to cut through the noise. Consider for a moment the intentionally polarized and divisive nature behind how politics have become pop culture. This terror and outrage have slowly spread to customers and employees.
Again, however, companies and brands are thriving. These unique organizations trend in the opposite direction of the market, using joy internally with employees and externally with customers.
Let’s first address the emotion of joy. Joy is not about happiness alone. Organizations have spent millions trying to make happier employees to no avail. The current qualitative and quantitative data on the mental health of today’s workforce tell a grim story. The same goes for customers. No matter how hard you try, there’s no way to make everybody happy.
Beyond the traditional definition, joy is the motivation to be with you in strength but especially weakness. Joy is a relational investment that requires empathy, authenticity, and vulnerability with appropriate levels of transparency. Therefore, a reciprocal investment of joy between an organization, its employees, and customers—an emotional bond of three under the banner of your brand—creates a competitive advantage that I call Joy Effects or JoyFX for short.
Furthermore, joy is the currency that fuels my first and second investment thesis for substantial returns. If your brand strategy for customers and employees is based on joy, you will win. If your organization embraces a dialogic process for joy, you will thrive. Joy is the antidote and potent substitute for fear/terror and anger/outrage. Joy will motivate all stakeholders to go above and beyond to meet your organization's goals.
Joy is the ultimate secret competitive advantage in today’s VUCA landscape. Why do I consider it a secret? It’s because very few organizations, regardless of their lip service in the spirit of Nike, will “just do it.” And competitors won't know the difference between those radical leaders and organizations that succeed in doing it. To their detriment, they’ll assume you’re somehow more competent or even lucky.
Over the coming decades, brands and their companies that lack joy, internally and externally, regardless of size or historical performance, will fail. The incumbents will experience disruption, not from the acceleration of innovation, but by companies with JoyFX. It’s happening already, and I’ll present the evidence to confirm it.