Saturday, October 1, 2011

You've been disintermediated (on the coming rise of of the alienated employee)

More than a decade ago, in May 2000, Married To The Brand author and Gallup researcher William McEwen argued in "It's The People, Stupid!" that marketers were getting behind the times in their reliance on the four "P"s - product, price, promotion, and place (distribution). 

As we moved from a product economy to a service economy, McEwen found, there was a fifth P that was getting neglected: People!

"People represent the Brand and people, on behalf of the Brand, touch the customer in any number of ways. These individuals...may well be the most powerful marketing resource available to build brand differentiation and enhance customer commitment."

McEwen's conclusions were based on objective research by Gallup; he wasn't an employee communicator advocating for people out of the kindness of his heart.

Gallup conducted a study at that time of 6,000+ consumers to find out how important each of the five "P's" was to them. As it turned out, the most important factor in driving brand loyalty was the employees themselves. Not the ads, not the discounts, not the availability of the product - people. And this held true whether they looked at hamburgers or cars or electronics or airlines or banks. Products you would think would be heavily price- and promotion-driven, ultimately had enduring value because people liked interacting with their employees.

A couple of years later, never having read McEwen's article, I wrote an article by the exact same name about the exact same subject, published on Allaboutbranding.com. At the time I was working for The Brand Consultancy in Washington, D.C., which specializes in helping organizations align their external and internal brands. In fact we spent a lot of time thinking and talking about the critical role that employees played in building the brand. But very few companies, in my experience, really got the message, prompting me to write this;

"Despite the existence of many books about branding, not to mention numerous firms that sell it, the disappointing reality is that branding initiatives often fail. According to a recent survey of 700 business professionals conducted by Tom Peters, more than 90% said they did not understand how to effectively represent their company's brand; 75% don't support their company's branding initiatives; and over 50% say they don't even know what a brand means....


"All of this points to an unexamined 'failure factor' in branding as it is practiced today. Although companies are well-aware of the need to project the right brand image, they have paid little or no attention to gaining employee commitment to the brand at all levels....


"The conventional view is that branding is about creating 'image,' changing 'perceptions,' driving 'marketing and sales.' The emerging, more people-centric view, is that branding is about creating loyalty, motivation, and even missionary zeal among customers and employees alike.


Now comes the cover story of Forbes, September 26, 2011, "Social Power and the Coming Corporate Revolution."  It describes what has happened now that employees, in whom the power of brand is invested, have seized the reins away from their clueless bosses (sometimes "horrible bosses"). They are taking advantage of any and every technology at hand to connect in new ways. (The article's focus is on customers and employees alike, but for the purpose of this post the focus is only on employees.)


If you read the Forbes article carefully, you see that the changed economy, together with social media tools, have handed employees far more power than they ever had in the past - and how organizations disregard this power at their peril.


Here are some quotes from this excellent article, available online for free, which highlight the changes taking place right now:


1. "People are changing faster than companies...The elites--or managers in companies--no longer control the conversation."


2. "In this new world of business, companies and leaders will have to show authenticity, fairness, transparency and good faith. If they don't, customers and employees may come to distrust them, to potentially disastrous effect."


3. "Prospective employees don't have to take your word for what life is like at your company--they can find out from people who already work there."

4. "Longtime loyal employees now have more options to launch their own, more fleet-footed startups, which could become your fiercest competitors in the future." 

5. "Trust is built by sharing vulnerability....It's not about the top executive dictating what needs to be done and when, it's about providing individuals with the power to connect." (John Hagel, cochair, Deloitte's Center for the Edge, quoted in article)

6. "Many of your company's most valued employees now have CVs out on the street fulltime (on LinkedIn)--searchable by millions, including your competitor's recruiters. Do you want to take a chance mistreating or ignoring such people?"

7. "In 2009 one (YouTube video) appeared showing a Domino's Pizza worker putting cheese in his nose while making a sandwich, among other abominations. Its stock dropped 10% in short order. One employee's bad judgment damaged an entire company's reputation." 

8. "With the old way, all information flowed via e-mail. Now store managers and support staff all over the country can post on Yammer what they're doing, what they're proud of, or say, ‘Hey, I've got a problem. Does anyone know how to fix it?' "

9. "A little Toronto startup called Rypple applies social thinking in a different way--for internal employee management. Its social evaluation tool lets everyone in a company rate everyone else and gives people continuous realtime feedback. It taps social and peer pressure to make job evaluation more effective at driving future performance."

10. "What many companies get wrong when they think of ‘social' is they think of it as a marketing ploy, rather than as just a way of extending what you already really are as a company or a brand,"she says."If you do care about your employees and your customers, it allows you to show it and extend your reach." (Gen Y author Nadira Hira)

The change we are seeing today toward the empowered employee, in charge of the brand, weaves together trends in the economy, technology, culture and psychology. It may look like there are no jobs and that employees are at the mercy of their organizations. But actually nothing could be further from the truth. What is true is that employees are looking around at the landscape and making choices. If companies look around and change the social contract at work, there will be a basis for renewed bonds and the corporation can go forward as we know it today. If not, employees will leave their companies, probably with friends, and start new organizations together to compete with them.

And that, in the end, could change absolutely everything.

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Copyright 2016 by Dannielle Blumenthal, Ph.D. All opinions are the author's own. Powered by Blogger.