Why Employee Experience (EX) trumps Customer Experience (CX):

Superior employee experience is the cause of excellent customer experience. After 17-years of doing retail mystery shops and training Customer Experience (CX), Ian Rheeder shares the human science behind great Customer Experience Management (CEM or CXM). In this article, he shares an avalanche of brain-science that demonstrates why employee experience (EX) is more important than customer experience (CX).

Introduction

There are just two things that are important to our businesses—a clear strategy and great customer experience (CX). From advertising to every interaction, CX is the overall customer experience (or accumulative perception) of our companies. Service is just part of CX. The critical question is “What comes before great CX happens?”

The definition of Customer Experience Management (CEM or CXM) is an integrated system of marketing strategies (supported by digital platforms), which focusses on employee and customer engagement. Why both employees and customers? Because great employee experience (CX) results in superior customer experience (CX), which results in customer satisfaction (and loyalty), which finally results in growth and profitability.[i] There is a firm link between employee loyalty (retention & productivity) and customer loyalty (retention & repeat sales).

Pick n Pay was so devastated by Woolworth’s & Checker’s EX & CX, that in 2024 PnP South Africa was insolvent. Sean Summers (age 70) was called back from retirement to fix PnP[i]. The first three steps in his “get back to basics” strategy were: 1) Employee Experience (EX) first: “Our People Make The Difference”, 2) Segmentation: Close down the wrong stores, rebrand lower LSM stores Boxer, improve the right stores EX and CX, 3) Customer Experience (CX): Note, EX was put before CX (although CX was the real issue, EX precedes CX). “Happy spouse happy house”; then happy kids; then happy pets.

Employee Engagement is the way employees think, feel and act at work. If on Sunday night (for example) you feel terrible about Monday morning (i.e. work is a threat), will you enthusiastically invest your energy at work? Probably not. And what’s worse, your body language will be an emotional contagion that negatively infects everyone in your department too. Employees have the power to use their energy at their discretion.[ii] [iii] Engagement is more than just motivation; it’s about helping colleagues, and is something that employees have to offer, at their own discretion.[iv] This means employees hold unrestricted power over CX.

When employees are engaged, then the brain is in a happy state. Neuroscientists call this a reward state.[v] ?Amazingly, a happy brain even has a wider physical perceptual view.[vi] So it’s no wonder happy employees solve customers’ problems better and faster than disengaged employees. Unfortunately, most leader-managers focus only on peoples’ actions at work, but feelings matter just as much.[vii] Get the right feeling to flow, and great CX happens, which improves your profitability.[viii]

In short, happy staff are much more capable of making decisions and helping customers. An engaged service assistant on the retail floor will have good levels of dopamine in their reward circuitry of their brain, which is released directly into the prefrontal cortex, positively affecting thoughts, feelings and actions. Aon's multinational study (2015) demonstrated a 5% increase in employee engagement correlated with a 3% increase in a company’s sales. Gallup has also calculated that the top quartile of engaged business units is 21% more profitable (and 17% more productive) than the bottom quartile. In addition to this there is 41% less absenteeism.[ix]

Leadership is Key

A massive 70% of an employee’s engagement is correlated with their relationship with their boss. And across every industry, the number one reason for resignation is “my boss”. This means leader-managers have a huge responsibility for influencing and inspiring their team. In fact, employee engagement can be thought of as the average level of reward experienced (by the brain) at work. Likewise, a disengaged employee’s brain feels threatened at work (less reward and more threat), and decreases the brain’s effectiveness and efficiency.[x] Using fear on an employee is only effective short term.[xi] Thankfully Gallup have devised twelve questions (Q12) to gauge employee engagement. Their Q12 study in South Africa revealed that only 9% were motivated at work, whilst 45% hated their jobs so much that they wanted to “sabotage” their businesses.[xii] The study revealed a lack of trust in leadership was the main cause of employee disengagement South Africa.

With this background, let’s now look at how we can use the below ten EX-levers, spawned by neuroscience, to improve the world of employee engagement (EX). Each EX-lever is broken up into a Human section, Digital section and a few ideas for your EX Service Charter.

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1.????The human brain is not a business organ; it’s a social-organ:

Human: The single biggest breakthrough is customer-centricity is start with employee-centricity or improve the employee experience (EX). This is because “When you love your work, then customers will love your work”. Or “Happy spouse, happy house.” The benefits of a brain in a reward state are huge: every single part of the brain works better; blue collar workers operate 27% faster, innovation increases by 300%, call centre sales staff sell 400% more and ordinary sales people sell 37% more.[xiii] This is also why bosses need to be approachable and likeable (think Putin vs. Zelensky). For instance, Gallup’s studies show that if you have a good friend at work, you are 700% more likely to be engaged (motivated). Dr Mathew Lieberman’s studies[xiv] show that only 0.8% of leaders focus on both “results” and “social” needs. Results only leaders have only a 12% chance of being rated great. But as soon as a leader focuses on “social” and “results”, their chance of being rated great, skyrockets to 75% (again, think Putin vs. Zelensky). This is also why working alone at home hurts collaboration and innovation; people solve customer journey problems face-to-face with colleagues – not huddled over a keyboard.

Digital: Due to the Digital Transformation of the workplace, software (infused with AI) must be developed to compliment the employee end-to-end journey—from recruitment, onboarding and career development. Digital tools should make the average employee look like a genius, and therefore improve employee engagement. In other words, employees need the right hardware and software to do their work right—especially in a hybrid work-from-anywhere (WFA) office.

Service Charter Ideas (Internal): Would you recommend your job to friends (Internal NPS)? Do you have a good friend at work? Implement and rate induction training during the first two weeks of a new hire? Implement a Leadership 360. I have the tools to do my job properly (rate)?

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2.????Plan Serendipitous Collisions Over Coffee:

The best innovative ideas and problem-solving discussions, come from the accidental corridor and canteen chats. Researchers have learned that face-to-face interactions are by far the most important activity in an office. When collisions occur, regardless of their content, improvement in strategy and operations typically follow.[xv] We are 400% more likely to communicate regularly with someone sitting six feet away from us vs. 60 feet away.[xvi] For example, when a salesperson increased their interactions with co-workers by 10%, their sales also grew by 10%. Another study of supplying free coffee to employees increased sales by 20%.[xvii] Stopping subsidised coffee and banning social interactions is therefore a terrible idea. Workplace design must support relationships.[xviii] [xix]

Digital: Face-to-face using MS Teams and Zoom is still very powerful way to collide. Use it deliberately and frequently.

Service Charter Ideas: Workspace design should factor in collaborative spaces and private spaces to interact with colleagues. Some companies (3M) ask employees to innovate as part of their day; this requires deliberate time-out to reflect. Incentivise, recognise and celebrate.?

3.????Happiness boosts innovation, productivity & sales:

Human: The “science of happiness” has exposed dozens of advantages when an employee’s brain is happy. Why is this? Because due to the energy enhancing dopamine and serotonin released when happy, every single part of the brain works better. Leaders think people are rational; but the rational human does not exist. Humans are driven by feelings; feelings then drive performance. Rene Descartes (1596-1650) was wrong when he said “I think therefore I am”, which is not nearly as accurate as “I feel therefore I am”. Feelings make us act; thoughts merely guide us. Hope, faith, love and trust are feelings – not thoughts. Leaders need to realise that they are managers of energy or feelings. It was Napoleon who realised that to win a war peoples’ morale is 300% more important than equipment.

Digital: Yet, because of the new digital way of doing work, digital software can easily improve real-time collaboration and thus performance, reducing employee burnout.

Service Charter Ideas: Managers need to check-in formally with the staff at least twice a year. Managers need to factor in “social” and not just manage people using cold objectives. Incentivise, recognise and celebrate.?

4.????We have Mirror Neurons:

Human: It’s now proven using brain scanners that if someone smiles at you (or does a single-eyebrow-flash), it feels like you are actually smiling. The impact of this is huge because the service provider or leader literally creates serotonin in the person’s blood stream, which unconsciously biases them towards enjoying the EX or CX. In summary, positive energy is contagious, but negative energy (i.e. indifference) will spread through our mirror neurons 300% faster.

By making employees feel valued, “The 10/5-Way” is an elegant solution to solving the internal mood or climate of a business. At 10m leaders need to smile at each employee, and at 5m they need to greet employees.

Digital: Don’t forget, an online meeting with your HD camera on, exposes your body language in high definition. Zoom type platforms are very powerful for engaging with your staff.

Service Charter Ideas: We will use “The 10/5 Way” daily. Implement a Leadership 360 that rates approachability, transparency.

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5.????Humans are switched off (unconscious), but still ‘notice’ what’s going on:

Human: Our brain does 400 billion calculations per second (bits/second), but we are only conscious of 40 bits/second. This means that the world of EX & CX is an unconscious one. But an unconscious level we are still sipping in smells, sounds, body language and colour, which means that customers and employees are often unaware of why they love or hate the environment.

Digital: Again, don’t forget, an online meeting, reveals your facial body language in high definition. Work on your online image. Get the best graphic designers involved in the UX (User Experience) and UI (User Interface).

Service Charter Ideas: Have in-depth discussions with you staff regarding what works and what does not. Be transparent with why we do things this way around here. Focus on workplace tools and office design that supports employee productivity.

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6.????The Opposite Emotion of Trust is Disgust:

Human: Trust has a massive 77% correlation[xx] whether someone enjoys your presence. One of the best ways to influence is to build trust by demonstrating empathy. Trust produces oxytocin, which is the platform for starting new relationships—the cornerstone of both EX & CX. One of the fastest ways to build trust is to be the first to do a small favour (servant leadership or servant CX). Smile warmly, do a single eyebrow-flash during the handshake and show genuine sincerity when greeting (for example, by asking relevant questions with a caring tone). It’s difficult to fake sincerity because we pick up on the unconscious micro-signals that warn us. Secondly, did you now that the opposite emotion of trust is disgust? What’s more is there is no emotion between trust and disgust. Customers and employees either trust you or they have disgust for you. It’s just the way our brains work—brains have to choose between “are you for me or are you against me.” Trust produces oxytocin, prompting generosity and cooperation.?Yet trust is like a squeeze tube – once it’s squeezed out, it’s difficult to push back in. And what’s worse, with minimal cues, our brain’s amygdala makes its mind up in 50-milliseconds whether it’s “Us vs. Them”. So train yourself up in key cultural differences and understand the norms and unwritten-ground-rules of your diverse audiences; things like handshakes and “meet & greet” norms. One of the fastest ways to build trust is to be the first to do a small favour, which triggers reciprocal altruism.

Digital: With improved Customer Relationship Management data quality, CRM software can assist by prompting relevant EX and CX at every touchpoint, and of course improve Time To Resolution (TTR). Simultaneously, by empowering employees, CRM improves the Employee Experience (EX) and reduces burnout. Remember EX is the secret behind great CX.

Service Charter Ideas: Check-in for weekly feedback session. Do Leadership 360 degree surveys. Do a formal performance appraisal at least twice a year. Agree on objectives and plan (KPIs). Ask the right questions. Incentivise, recognise and celebrate.

7.????The Opposite Emotion of Love is Indifference:

Human: The opposite emotion of love is not hate; it’s indifference. We see others as indifferent until proven loving; especially when they don’t look like us. 34% of women murdered in the USA are murdered by the man who loves them. This means that love and hate go together. Indifference (lukewarmness) is the real EX & CX killer. We sense through tone-of-voice and body language, that service providers or bosses just don’t care. Studies show that about 70% of all customers are put off by just one employee’s indifference. The question is how do we solve this? The answer is: leaders need to give employees a “why” to improve CX and make the workplace a fun place to be. If a boss is indifferent to you, there’s a high chance you will be indifferent towards customers. Remember, we are more sociable than any other species, and indifference is a social killer. So armed with this self-awareness, how do we combat this potential split-second biasing in business? How do we swiftly come across as a kind person? How do we prevent a disturbing “Us vs. Them” situation from developing? The answer comes from neuroscience: We treat people like relatives when they feel like relatives. Would you be more inclined to risk donating one kidney to a relative or a stranger? Well, it depends on how they make you feel; right?

Digital: With better data quality (employee and customer), CRM software can support the service provider by making them more relevant at every touchpoint. Quality data can be used for segmentation, defection warnings and automatically scripting relevant outgoing messages.

Service Charter Ideas: Factor in that humans have feelings and need weekly feedback. Focus on Gallup’s Q12. Organise social events. Show appreciation weekly.

8.????STOP Trying to Delight Your Internal & External Customers:

Human: This advice is confusing to employees, because it’s impossible to delight unless you first get the basics right (at all touch-points). The neuroscience backs this up too. Our brain registers the emotion of bad service 300% larger than good service. Or “bad” is 300% bigger than “good”. Our brains are just hardwired to lookout more for painful touch-points vs. delightful touchpoints. What’s more, our brains need three delightful touchpoints to cancel out one bad touch-point (i.e., a 3:1 ratio). Which means delightful gets expensive if you have one bad touchpoint. So, forget the delight factors initially, and focus on meeting basic employee and customer needs first. Then if you have an EX & CX budget leftover, work on meeting wants too.

Digital: Digital has become the new basic or foot-in-the-door of EX & CX. AI software can help employees get the basics right, in real-time, by reminding them to do relevant CX things. Helping manager, AI will reduce 69% of the manager’s workload by 2024, allowing managers to focus on EX & CX. [xxi]

Service Charter Ideas: Map out the employee journey map, and get the basics right at every touch-point. Give informal feedback weekly. Give formal feedback at least twice a year. Manage the touch-points.

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9.????Leaders can actually motivate people (ask the right questions)

Because motivation is something that employees must internally arrive at themselves, psychologists suggest we?cannot motivate others. However, leaders can?influence?and?inspire?people by giving them a?reason?to change their behaviour. Whether conscious of it or not, we are swayed by extrinsic and intrinsic desires, including our attitudes and personal values. Examples of extrinsic “outside” rewards are money, fame and power – Napoleon realised people would die for medals. It is important to note that not everyone is motivated the same way; some really do love money. The key to “motivating”, coaching and mentoring others is to ask questions to get the right feelings flowing – an inside-out approach. If you want to be engaging, rather ask questions as this has a desired neurobiological effect, getting people to think and feel deeply about what?they really want?(intrinsic motivation). Asking questions, with the right tone and body language, is now proven to really build trust. Asking questions also demonstrates that you are an empathetic problem solver. Imagine being asked these questions: “What’s important to you about buying an SUV?” or “What is the one thing I should do to make things better for you?” or “What is the one big reason you come to work every day?”

Service Charter Ideas: Spend time getting to know your people. Ask for feedback. Coach and mentor weekly. Managers must have intimate knowledge of work, and must understand what it takes to accomplish their staff’s KPIs, and what makes work meaningful?to them. Don’t rely on the annual performance review! Incentivise, recognise and celebrate.

10.?The SCARF Model

Dr David Rock's 2008 neuroscience model called SCARF (Status, Certainty, Autonomy, Relatedness and Fairness) explains the basic needs of the human race, offering the leader a great tool. Following Rock’s model, we can focus on five key areas of to influence and inspire people:

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Status: Always be polite, alert and relevant to employees. Hurting a person’s status makes them angry. Force passengers to walk through first class when boarding an aeroplane and there’s an 800% higher chance of “air rage” in the economy class section. In Africa the Power Distance Index (PDI) between races and genders is too high. When there is a PDI between two people (e.g. a doctor’s high status vs. a nurse), the fearful one loses blood in their prefrontal cortex. This “PDI stress” in the cockpit of Korean Air caused 1700% more accidents than American Airlines. Why? The lower ranking crew were too scared to think clearly and also too timid to offer their higher ranking pilot advice! The solution? By just getting onto first name terms dropped the PDI and got them working as a team.

Certainty: The drain on the brain of the unknown (uncertainty) increases decision-making fatigue. For example, employees want to know if their job is secure, or is there a career path; or if I work much harder will I earn more?

Autonomy: People have a craving for options to choose from. Millennials (born 1982 - 2002) especially love the concept of choosing to work from home. However, too many options hurt ‘certainty’. (Note, every company has a different set of circumstances regards working remotely.)

Relatedness: Being liked is important. Be sure to make relevant small talk, genuinely smile, give a single-eyebrow-flash when saying hello, pay genuine compliments and be the first to concede on something small (i.e. be a servant leader).

Fairness: By eavesdropping on the brain, neuroscience also illuminates why, when we lead people, we need to make them feel like they are liked and being treated fairly. Mention ‘win-win’, do a favour or concede on something small. Studying current hunter-gatherers, the second biggest causes for murdering someone is refusal to share meat fairly.[xxii]

Service Charter Ideas: Career path analysis. More 1:1 feedback meetings. Be a servant leader, coach and mentor--weekly. Incentivise, recognise and celebrate.?

Summary

Fortunately, neuroscience has simplified the topic of EX & CX, allowing us to focus on a much tighter range of proven levers.?Secondly, in systems thinking, attempting to focus on dozens of things is not as powerful as focussing on just the ten EX-levers above. Lastly, we need to genuinely want to help others by putting them first; show warmth (trust) before displaying competence. Only then will employees want to work with you.

[i] https://www.bizcommunity.com/article/pick-n-pay-reveals-strategy-to-restore-its-business-128216a

[i] Heskett, Jones, Loveman, Sasser & Schlesinger (1994. 2008, p.120). The Service Profit Chain. Harvard Business Review.

[ii] Rock, D & Tang, Y (2009). Neuroscience of Engagement. Neuroleadership Journal. Issue 2.

[iii] Conference Board, (2006). Employee Engagement, A Review of Current Research and Its Implications. New York: The Conference Board.

[iv] CIPD, (2008). Employee Engagement A CIPD Factsheet (2007). London: The Chartered Institute of Personnel Development.

[v] Elliot, A. (Ed.) (2008). Handbook of Approach and Avoidance Motivation. Psychology Press.

[vi] Schmitz, T. W., De Rosa, E., & Anderson, A. K. (2009). Opposing influences of affective state valence on visual cortical encoding. Journal of Neuroscience, 29(22), 7199-7207.

[vii] Barsade, B and O’Neill, O.A. (2016). Manage Your Emotional Culture. Harvard Business Review. Vol. 94. Issue 1-2.

[viii] Barsade, B and O’Neill, O.A. (2016:61). Manage Your Emotional Culture. Harvard Business Review. Vol. 94. Issue 1-2.

[ix] Gallup (2017:38-39), State of The Global Workplace

[x] Rock, D & Tang, Y (2009). Neuroscience of Engagement. Neuroleadership Journal. Issue 2.

[xi] Tang, Y. Y., & Posner, M. I. (2009). Attention Training and Attention State training. Trends in Cognitive Sciences, 13, 222-227.

[xii] Gallup (2014): State of The Global Workplace Report

[xiii] Spreitzer, G, & Porath, C. (Jan-Feb, 2012). The Value of Happiness. Harvard Business Review. p.96, and p.102.

[xiv] Lieberman, M. (2013). Social. Why our brains are wired to connect.

[xv] Waber, B., Magnolfi, J. & Lindsay, G. (2014). Workspaces That Move People. Harvard Business Review. Vol. 92, Issue 10. (pp.70-72).

[xvi] Waber, B., Magnolfi, J. & Lindsay, G. (2014:73). Workspaces That Move People. Harvard Business Review. Vol. 92, Issue 10.

[xvii] Waber, B., Magnolfi, J. & Lindsay, G. (2014). Workspaces That Move People. Harvard Business Review. Vol. 92, Issue 10.

[xviii] Congdon, C., Flynn, D. & Redman, M. (2014). Balancing “We and Me”. Harvard Business Review, 92(10), p.56.

[xix] Pentland, A. (2012, April). The New Science of Building Great Teams. Harvard Business Review.

[xx] Zak, J.P. (2017). The Neuroscience of Trust. Managing Behaviors That Foster Employee Engagement. Harvard Business Review. Vol . 95, No. 1.

[xxi] World Intelligence Congress (2022).

[xxii] Sapolsky, R. (2017:323-324). Behave. Humans at their best and worst.

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Ian Rheeder facilitates CX at the Gordon Institute of Business Science (GIBS). He’s a Chartered Marketer and hold an MSc in The Management of Technology and Innovation (MOTI). [email protected] .