Design Thinking for the Employee Experience

How might we produce the most meaningful & valuable work experience for our employees?

That is the question we have facing us as an employer of many thousands of people. That is a question so many of our clients face.

Why does this matter?

Our employees control the company. The vast majority of day to day decisions in a company are not made by owners, but are made by employees on the front lines. The vast majority of raw and unfiltered information about our operations, our customer experiences, and our opportunities for improvement sits in real time with our front lines, only getting to management and owners when it is significant enough to get into reports and other communications. At the end of the day, so much our organization’s success or failure, our customers’ experiences, and our efficiency comes down to the choices and attitude of our employees.

Economics describes this scenario in Agency Theory, which tells us we have two main problems to overcome so that employees and shareholders share the same interests:

1. Reduce information asymmetry
2. Align the interests of employees and shareholders

Among the various typical ways to align the best interests of the organization and the interests of employees include: pay, contracts, bonus structures, and metrics… all of which have some pretty tremendous limitations to actually speak to the human interests of our employees.

All attempt to control for behavior through extrinsic motivators. Pay can be outbid, contracts can be oppressive and encourage people to leave, bonus structures can demotivate when they change or don’t work, and metrics can promote the wrong, unintentional outcomes as much as the intended outcomes.

I argue that the best possible approach is to design for an employee experience that means something to your employees. In researching this space, you would quickly come across the concept of “job crafting.” Born out of a Yale research effort into how people in tough job environments were able to cope with “devalued work,” job crafting refers to employees modifying their work in a way that makes it more meaningful to them. I recently interviewed retail workers to talk about their work experience. I didn’t hear about their tasks and their pay, I heard about how they help someone achieve the goals they came into the store with. I heard about the moment someone walks up to the register with something they are excited about and how the employee likes being part of making that a happy moment. I heard about employees in a clothing store helping people find clothes that make them feel good about themselves. They pay and the tasks certainly matter, but they were not the source of happiness and fulfillment for those employees.

What do we do about it?

Our design thinking for employee experience tends to look like this:

1. Discover what your employees really care about and who they are. For a larger operational environment, the very best way to do this is through ethnographic research. Surveys are fraught with biases and limitations, town hall meetings are contaminated by hierarchy and social dynamics, and crowd-sourcing ideas from your employees will bring in a lot of bias towards the way things work now, the way employees think you want things to work, and the long wish list of “wouldn’t it be nice” items that might not actually allow you to determine what they will value in the end. Ethnography allows you to take an objective team, gather a lot of data, and analyze it with a mix of scientific acumen and business grounding.
2. Envision the future based on what your employees care about. Establish a common vision of where you are heading. From that vision, select where to start, build your roadmap, and start investing in the experience you want to see.
3. Design for the experience. Based on your vision, you need to prioritize the most valuable place to invest in the experience. It might be about the journey, it might be your policies, it might be your messaging or employee brand, but it can’t start as everything all at once or you will quickly run out of capacity. If you can pick one area to start with, you have a big picture vision and a lot of insights about your employees, and now you are safe to generate some ideas, build some prototypes, and start testing new pieces of the experience. There are a number of ways to dig into the design process around the employee experience. Design sprints and pop-up design studios lend themselves very well to co-creation with employees, allowing you to build a concept inside an existing office and get almost immediate feedback from colleagues on their lunch breaks. At the other end of the spectrum, you could be considering a new model of employment or a new built environment that needs to follow a longer, traditional design cycle outside of your operating environment. Whatever the highest value starting point, the key is to start taking action as soon as possible.

Investing in the employee experience will almost never be the most pressing emergency situation requiring attention to be solved. Unless operations have ground to a halt or you’ve reached an unsustainably short average employee tenure, the formal investment in employee experience will have to be a strategic decision.

What do I get from this investment?

The best outcome from investing in employee experience is creating an organization where the work is rewarding and meaningful. As employers, we do need to take responsibility for our piece of the human experience.

But aside from our caring for the fellow humans we work with, there are some measurable business impacts.

1. Longer average tenure of employees reduces the costs of attrition. Retaining employees means you are spending less on recruiting and training, you are building skills and keeping talent in-house, and you are maintaining some continuity in know-how.
2. Higher alignment of interests between employees and employers means reduced “agency costs.” Agency costs come in the form of improved productive efficiency, higher levels of compliance, reduced absenteeism/presenteeism, and generally well-intentioned behavior.
3. Employer brand comes across both as the culture or tone of the office as well as the reputation you get in the labor market. The better employee brands have current and past employees who would recommend others to go work there. Employer brand and reputation has an impact on recruiting costs and recruit quality equally.