I’ve been playing with metrics for the last week, trying to find ways to measure the link between leadership and growth in a company. This article by Bain and Company shows one clear part of the link and demonstrates a powerful metric to be used in measuring client engagement.
The first part of the success formula is good leadership. Good employee leadership at a company creates strong employee engagement. I’ve harped on that before so won’t go into how this works. What is important is what happens as a result of employee engagement.
According to the article: “Frontline employees are central to every high-performing go-to-market system, the linchpin that makes it all work.In our survey, frontline engagement was the No. 1 factor separating leaders from laggards— which means, in effect, that if you don’t get the frontline part right, you are failing to get the system right. As it turns out, nearly every one of the go-to-market leaders we studied engages the front line as the embodiment of its go-to-market system.”
That is the second part of the formula. Engaged frontline employees create customer engagement.
The study points out further that: “Just 9 percent of the 2300 companies in their study companies actually averaged annual revenue and profit growth of at least 5.5 percent over the 11-year period from 2000 to 2010.Nearly all of them have a different relationship with their customers. Far more than other companies, their customers are loyal, passionate advocates—the kind of buyer who loves doing business with a company. Far fewer customers are dissatisfied. The average Net Promoter® score of the growers is 30, compared with just 13 for other companies. (A metric widely used by customer-focused companies, the Net Promoter score, or NPS®, is based on the question, On a zero-to-10 scale, how likely are you to recommend the company to a colleague or friend? A company’s NPS is the percentage of promoters— those responding with scores of 9 or 10—minus the percentage of detractors—those giving scores of zero to 6.)”
So that finally, Engaged customers create growth and profit.