Happy employees make happy customers? Think again

Conventional wisdom in the business world preaches happy employees make happy customers. But is it really true? Does great employee experience (EX) unquestionably lead to exceptional customer experience (CX)?

I never doubted this credo until I read Business Insider’s 25 happiest companies in America report recently. I was surprised that none of the businesses widely known for their superior customer service made it onto this merry list.

Curious, I looked up Forrester’s 2014 CXi online to validate; it was quite shocking to see that, indeed, the highest CX ranked associations (Amazon, with a score of 91 out of 100, Courtyard Marriott with 90, and Old Navy with 90, for example) are not among the 25 happiest organizations. A second source, the 2014 Temkin experience ratings, reconfirmed the disparity.

I also realized after reviewing these studies from the opposite direction that the 25 happiest companies are not ranked high at all in these CX rating lists.

Troubling: EX and CX do not possitively correlate

Isn’t it counter-intuitive that top CX rated entities did not make the happiest EX list and vice versa? To make sure that the 2014 CX and EX findings were not outcomes of a statistical anomaly and hence skewed the discoveries, I extended my inspections to previous years, and those earlier data led to the same diagnosis. Simply put, EX and CX do not naturally match up with each other well.

According to a 2013 Business News Daily survey, the leading aspects for employee satisfaction are: task variation, self-autonomy, recognition, break time, job security, and salary to a certain extent. And an employee engagement article in Qualtrics a few months ago showed talent utilization, belief in corporate mission, work recognition, and sense of career path as the primary employee engagement stimulators.

These two explorations show crucial elements that boost EX, but none of these ingredients directly upsurge CX drivers, which, according to general consensus, result from a mixture of service, quality, value, communication, and courtesy. Would components in the EX tool box bring about beneficial effects to CX or vice versa? Not usually.

Worse, they could correlate negatively

Wait, what does it mean when a firm is good in one (CX or EX) but poor in the other? Could this be that some EX incentives hamper CX results? And could some CX operations bruise EX? We do not need to scrutinize too deep because we can easily demonstrate the existence of adverse interactions between the two through the following deductions.

1. EX improvement objectives with unfavorable CX impacts:
* Raising salaries will make employees happier, but if the increased cost is partially financed by elevating product prices, then customer satisfaction could fall.
* Increasing company-paid vacations will raise employee satisfaction, but this initiative will cost firms more on production and services. If a portion of the increased expense is recouped by hiking prices or reducing services, then customer gratification might drop.

2. CX development actions with negative EX effects:
* Prolonging support hours could cheer more customers, but this lengthens work time of service staff if institutions do not cover the additional work hours by growing the service team. Longer work shifts could hurt employee goodwill.
* Practice makes perfect. Experienced staffs usually churn out better product and service quality, which pumps up CX. But if this is carried out to a point that hinders job variation, employee satisfaction might tumble.

How to balance the two

CX strategist and executives should be cognizant of potential EX impairments on every CX initiative they engineer and conduct. Perceived CX benefits must be weighed against their induced EX afflictions before deciding if the intended CX influencers should be carried out, and EX specialists must be involved to prepare for and to lessen the corresponding EX disturbances if at all possible. In other words, CX operations must be calculated to avoid or minimize the blow to employee satisfaction because no corporation can repeat its CX gains by continually chipping away at its employee happiness in the long run. When employees have to sacrifice to bring up customer satisfaction, that suffering must be compensated one way or another to prevent long term EX breakdown.

CX strategists and executives must connect with their EX counterparts when they architect CX instruments so that minimum EX impact is a design goal on par with CX improvement targets. This coordination should give EX professional enough lead time and knowledge to prepare for harm absorption and diversion if possible.

Chi-Pong Wong is Supply Chain Strategy Development Manager at Hewlett-Packard and previously worked at Arrow Electronics, IBM, STMicroelectronics, and NEC Electronics. He has published a number of articles on customer experience, marketing, branding, retail, supply chain, program and project management.