Companies investing in making work better: Outliers or Trendsetters?

Over the last few years, I’ve noticed something unusual: some of of my clients are starting significant efforts to improve the work experience of their employees - and they don’t even ask for a business case documenting the return on investment.?

The first one was a global healthcare company. Highly educated scientists in its R&D function wasted precious time filling out paper logs, tracking down equipment, and digging for data. Clearly, digitizing some of this low value work would generate tangible benefits not only for the company but also for its employees. But the team raising the issue with senior leadership was not hopeful that their project proposal would be accepted. As always, there were plenty of other projects asking for funding, and nobody could remember a project like this ever being funded. They were shocked when the executives provided a multi-million-dollar budget to fund the project. When we started working with the team, I assumed that they had to justify the investment by quantifying how much time the project would save. Shockingly, the project sponsor insisted that was unnecessary. “We know that we will save a lot of time, but that is not the most important thing. We are hiring very smart people, and it just does not make sense to waste their time performing manual tasks. Getting rid of this work will allow us to get more done and get to market faster.”?

Back then, I shrugged this off as an outlier. In twenty-five years as a consultant, I have worked on many projects where improving the employee experience was one of the goals, although I’d never seen it being the primary reason for doing the project.?But funding a project squarely aimed at improving the employee experience and not requiring a detailed accounting of the return on investment was quite extraordinary.?

Yet, it happened again. This time it was a marketing agency looking to reengineer its entire service delivery process. The company had witnessed rapid growth, but productivity was starting to decline. Interviews with employees identified numerous pain points and inefficiencies: workflows were highly manual and redundant, systems did not talk to each other, and turnover was increasing. The client was looking for a partner to not only make the process more efficient but also to improve the job design. And again, there was no need to build a detailed business case. This is how the client explained it: “This is not a money-making scheme. If we could do the same work we're doing but have it cost less, I'd be thrilled. We're trying to find ways to make what we're doing quicker, faster, more efficient, but we also want to improve retention and become more attractive as an employer.”?

Now, two data points don’t make a trend, but in conversations with clients I began to notice that many were worried about engagement and retention. One of them, a leader in a large technology organization, exclaimed: “Our engagement scores are tanking - and so is productivity. We have a tremendous opportunity to drive top-line growth, but our product development teams are frustrated by the bureaucracy!”?

These issues are not only a concern for mid-level managers. As one non-executive director put it, “as long as I can recall, turnover was never a topic at our board meetings, but now it seems we talk about it all the time.”??

Almost everybody agreed that the opportunity was enormous. “Having less than a third of employees engaged is the equivalent of driving in second gear on a highway,” was how one executive articulated it, “if we could double that number, we would be crushing it.”??

If most agree that there’s a big problem and an even larger opportunity, that explains why some companies are taking action. But what holds back the others??

I think there are four possibilities why companies fail to take action:?

1. They consider low levels of engagement not a defect or bug but a feature of the work product. They recognize the problem, but there’s nothing that can be done.?
2. They see the problem as fixable, but there’s a no consensus about what to do so nothing gets done.??
3. They see the problem as fixable and agree on what to do, but there’s insufficient capacity and capability to take action so nothing gets done.
4. They see the problem as fixable, agree on what to do, and have sufficient capacity and capability, but there’s no compelling business case that offers a strong return on investment so nothing gets done.??

In my view, the fourth option is the most tragic: Everyone agrees there is a problem and what should be done. However, quantifying the problem in a way that convinces the finance folks to loosen their purse strings is a real challenge. Most leaders readily agree that engaged employees are far more productive than disengaged employees, which countless studies confirm. Experts estimate the true cost for replacing a knowledge worker between 70-120% of their annual salary. But if you think a 40% increase in turnover would prompt your average CFO to take action, you are sadly mistaken.?There is no separate P&L line item for the cost of poor work design.?

It's encouraging to see some companies that get it. I don’t think they are outliers. I believe they are trendsetters and that more companies will follow their example and invest in better work design to make work more productive and meaningful.?