The case for more 'Employee Research' at ESOMAR Congress
ESOMAR's events consistently offer exceptional opportunities for gaining a deeper understanding of the market research industry and its core challenges. With over 1,000 delegates in attendance, the 2023 Congress, which concluded last week, was no exception.
At the heart of this global conference are knowledge-sharing experiences, an area where ESOMAR truly excels. I had anticipated discussions on how Artificial Intelligence (AI) will reshape the industry or how to address one of its most pressing challenges related to respondent engagement. However, what truly captured my attention was a session on employee engagement. During the Research Effectiveness Awards 2023 track, -sponsored by Alpha-Diver -, Garreth Chandler and Ben Griffiths from The Evolved Group , along with Laurie Hibbs from Judo Bank , delved into how listening to employees has enhanced the Australian neo-bank. This led me to ponder whether we, as market researchers, should allocate more time to understanding and listening to our client's employees to foster their business growth.
Managing employees' willingness to work is a strategic activity
美国哈佛商学院 professor Felix Oberholzer-Gee champions the idea that value creation lies at the core of a company's strategy. According to his perspective, a company's competitive advantage stems from its ability to generate value for its stakeholders by managing two distinct elements:
The greater the WTP or the lower the WTS, the more value is created.
It's essential to note that 'Price' and 'Cost' should not be confused with WTP and WTS, respectively. Mere adjustments to the Price or Cost will not directly impact the overall value a company creates. In other words, you can reduce costs by negotiating with suppliers for better rates (capturing more value at the suppliers' expense) or charge a premium for your product or service (capturing more value from customers). However, it's important to note that these practices do not inherently create new value; instead, they shift value from one party to another. They are more tactical in nature and, ultimately, have their limitations; you cannot charge more than what a customer is willing to pay (WTP) or pay less than what suppliers are willing to accept (WTS).
A robust, long-term strategy aimed at building a sustainable advantage should prioritize widening the gap between WTP and WTS, thereby creating value, rather than solely pursuing short-term profitability or margins.
In the context of the services and information economy, employees are the most critical suppliers. Managing their WTS, or 'willingness to work for your company,' is one of the fundamental aspects of value creation and strategy.
While market research industry conferences typically address clients' WTP, the same attention is not often given to suppliers' WTS. Some might argue that this topic belongs to other forums, such as Human Resources conferences. However, as I'll explain since WTS is intrinsically tied to value creation and strategic choices, these aspects are interdependent and mutually reinforcing. Your choices regarding WTS will impact WTP and vice versa.
An illustrative example is Judo Bank, an Australian neo-bank focused on small and medium-sized enterprise lending and consumer term deposits.
The Judo Bank’s case: Dare to be different. ?
As famously stated by Michael Porter , the starting point of any strategic discussion is establishing whether you aim to be a differentiator or a lower-cost player. This distinction highlights the challenge of ?'Strategic Convergence;' when companies appear identical in customers' eyes (meaning WTP is the same), they often engage in fierce price competition. To paraphrase Porter's words, your options are to either reduce your WTS (focus on differentiation) or pay more and still be efficient.?
Crafting better jobs simultaneously reduces WTS while increasing WTP
Judo Bank's strategy leans towards differentiation. Employee WTS is influenced by various factors, including the cost of living, demand for their services, bargaining power, and the regulatory framework. These aspects can be seen as external or contextual. However, many other internal aspects within the company's control can be strategically managed and defined. These include training, promotion, visibility, flexibility, autonomy, organizational structure, colleagues, the company's social purpose, innovation culture, financial goals and horizons, etc. Measuring and effectively managing these internal aspects is a crucial endeavor for senior managers.?
Instead of relying on off-the-shelf engagement surveys, Judo Bank held a strong belief that “large-scale annual or intermittent surveys don't genuinely inform decisions or provide real insights into the ebbs and flows of employee experiences at work”. In 2019, they implemented a program called the Judo Employee Delight Index (JEDI) with the following characteristics:
Moreover, as mentioned earlier, sound strategic choices are interdependent and mutually reinforcing. JEDI's feedback is sophisticatedly linked with the voice of consumer surveys and feedback, evaluating leading and lagging indicators to understand key influences on employee attrition, well-being, financial performance, and customer outcomes. In other words, there is a compelling concept here: crafting better jobs via JEDI simultaneously reduces WTS while increasing WTP.
With that said, it's evident that JEDI's system and, by extension, Judo Bank are not suited for everyone, and that's by design. This aligns perfectly with a differentiation strategy's goal. The key is not to try to cater to everyone since people have diverse preferences in their relationship with work. A recent Gallup study among U.S. workers revealed a 50% split between two work-related preferences: 'Splitters,' who thrive with clear boundaries and personal time, and 'Blenders,' who prefer to merge work and personal life seamlessly. If you're pursuing a differentiation strategy... which half are you aiming for?
In conclusion
While some of the employee engagement activities may appear lighthearted on the surface, they play a pivotal role in creating value for employees and reducing their willingness to sell. These strategic initiatives transcend superficial perks like ping-pong tables or arcades and can serve as sources of challenging-to-replicate competitive advantages. The Market Research Industry cannot afford to be detached from this reality. There is still a substantial amount of research to be conducted, particularly in the post-pandemic era, where the notion of 'being present' and people's expectations regarding their relationship with work have been redefined. Our skill set remains invaluable in navigating these evolving dynamics.