Part 2: Stakeholder Engagement--The Need for a New Type of Agency
As outlined in Part 1 of this series on the need for a new type of engagement agency (See ESM: Part 1: Stakeholder Engagement—Profile of an Emerging Critical Discipline), very few companies in the advertising, marketing, or human resources advisory fields specialize in measurable strategies and tactics to engage all stakeholders in the organization’s purpose, mission, values, and goals. If indeed human capital is the last bastion of value creation, as many investors believe, then there is clearly a business opportunity for an agency or advisory service that can measurably demonstrate to organizations how they can turn their payroll, human resources, and marketing costs into profit centers, instead of fixed, sunk costs.
Because few in management learn in school that the return-on-investment of many marketing and human capital investments can be measured and correlated with bottom-line results, there remains a general tendency to view such programs as necessary evils or “sunk costs” along the lines of the famous quote attributed to the 20th century retail legend John Wanamaker, “I know that half of my advertising works, I just don’t know which half.”
Today, it’s now possible to easily track key internal and external human capital metrics that can have a clear impact on earnings and risks, including:
• Human capital ROI
—a calculation of the return of your company’s investment in people.
• Revenues, costs, turnover, referrals, or willingness to refer of employees—a measure of talent productivity and quality.
• Revenues, costs, turnover, referrals, or willingness to refer of customers—a measure of customer engagement, productivity, and quality.
Diversity, equity, and inclusion—a measure of the organization’s effectiveness in attracting and retaining talent, customers, supply chain and distribution partners across all sectors of its marketplace or community.
to use this free, confidential human capital calculator from HCMoneyBall for your organization.
If your organization is not tracking or managing to these metrics, chances are you are leaving growth and profits on the table.
A New Type of Agency or Advisory Firm Required
Most advertising and marketing agencies focus on helping organizations attract customers or employees; almost none get involved with promise delivery or retention or fostering loyalty or a willingness to refer. Likewise, many human resources advisory firms provide employee coaching, learning, culture, and related engagement services, but few focus on connecting external and internal marketing toward a common purpose. A multi-billion-dollar market of Incentive, Recognition, and Reward (IRR) companies help companies motivate and recognize sales and non-sales employees and channel partners, but rarely are these programs aligned with corporate goals with clear return-on-investment measures. Very few advisory firms help organizations develop strategic stakeholder engagement solutions across the enterprise aligned with the purpose, values, culture, financial and non-financial objectives of the organization—the only means of reaping the sustainable rewards of human capital.
A strategic approach to stakeholder engagement across the enterprise involves:
• Purpose, culture and brand alignment of all stakeholders.
• Assessment and feedback: the voice of the employee, customer, or other stakeholders.
• Human capital analytics and reporting involving all stakeholders.
• Communications in every medium—digital, print, face-to-face, three dimensional—aligned across external and internal audiences.
• Learning on every platform based on the needs of each audience.
• Job design to make work more meaningful.
• Collaboration and innovation.
• Meaningful benefits to address fundamental needs.
• Three-dimensional loyalty.
Does your advertising, marketing, incentive, or human resources advisory firm provide a strategic approach to these tactics aligned with organizational purpose and goals?
The EEA’s EEXAdvisors.com
marketplace includes a complete guide for the different types of engagement solution providers seeking to help companies turn human resources and marketing into profit centers instead of sunk costs. Click here
for a detailed report on the different types of tactics and solution providers.
The No. 1 requirement from an engagement agency is demonstrable expertise in program or process design and measurement and of course the ability to create and communicate solutions that challenge organizations to rethink current practices to make them more effective and streamlined while optimizing experiences for all stakeholders.
Because of the availability of so many already-existing technologies and services, there is almost no financial investment required for an existing agency or advisory firm to develop a complete collection of expert solutions based on client needs—without having to onboard multiple full-time employees. The key is developing a business model based on value added—that is, helping clients achieve measurable goals by managing the process on a holistic basis, much like the general contractor for a new home.
In fact, a sole entrepreneurial solution provider, with the right expertise in program design, measurement, implementation, and reporting, can provide a highly competitive solution with clearly measurable results by putting together a network of experts in different areas of engagement.
Even many of the largest advertising, marketing and management consulting firms outsource significant tasks to third-party partners or have purchased companies that provide these services independently of the parent company.
The Optimal Business Model—Pay for Performance, Time, and Materials
The No. 1 benefit of incentive and recognition programs is that when properly structured they are largely funded out of incremental sales, profits, productivity, quality, safety, wellness, etc. To establish the budget, the No. 1 criteria should start with the potential bottom-line benefit to the organization; i.e., what is the minimum it is worth to the organization if people achieve the desired goals or consistently support through their actions the organization’s purpose and values? There must be some value to the organization, otherwise these programs wouldn’t be considered. The next question is, what is the organization willing to share of that incremental gain in terms of expressing the appropriate level of appreciation and gratitude that will resonate with individuals and colleagues?
At companies with highly aligned operations, there are no additional costs for communications, learning, collaboration, assessment, and feedback, etc. that go into a successful engagement process. Regrettably, many large companies do not have such alignment, which can stand in the away of rapid action. This is where an engagement agency and/or enterprise engagement technology can help—by creating a platform that aligns all engagement tactics on a single platform without having to involve other departments--from assessment and feedback, analytics, communications and learning to rewards, recognition and reporting, etc.
The additional costs of program design, management and monitoring, measurement, reporting and continuous improvement processes generally represent a small percentage of overall costs assuming some of the goals are achieved. The ideal business model for all concerned includes:
Complimentary high-level evaluation to demonstrate solution provider capabilities as part of the evaluation process for both parties.
Fixed fee for the program business plan, return on-investment, set up and any time and materials involved based on the requirements.
Managed outsourcing fees—using a model similar to that of major consulting firms, receive transparent fees for the selection and management of third-party solution providers to ensure alignment and results.
Pay upon points issuance—this compensates the solution provider every time a participant earns points for achieving a goal or performing the designated behavior based on a percentage of a conservatively estimated value to or return on investment to the organization. When properly structured, the organization only pays for what it achieves in results; i.e. the desired outcomes or behaviors.
Pay upon award or experience—this compensates whomever provides the rewards and experiences for which people redeem the points, which might include personalization, customization, customer service, or other elements to surprise and delight.
The New Engagement Agency: How Big an Opportunity?
There are about 220,000 US companies with sales of over $10 million a year, not to mention not-for-profits and federal, state, and local agencies, that can benefit from a strategic and systematic approach to human capital management and reporting across the enterprise. Only a small percentage of them currently benefit from a strategic and systematic approach to people management—similar to the percentage of manufacturers in the 1980s with a formal approach to total quality management. Today, there are more than 1 million companies worldwide that follow ISO 9001 quality standards in manufacturing. In the meantime, there are only four that publish human capital reports conforming with ISO 30414 Human Capital standards and verified by an independent human capital auditor, over three years since the standards were first published. See ESM: Allianz is Fourth Company to Publish ISO 30414 Human Capital Report by Audit
There may be no more than a few dozen organizations at most that help organizatiions engage all their stakeholders in a strategic and consistent manner or who assist in the creation and implementation of human capital management strategics, metrics, and reporting connected to financial results. Assuming that boards and CEOs respond to the growing pressure from investors, talent, and customers for more transparent and meaningful human capital management practices and reporting, there is every reason to believe that strategic people management will track the evolution quality management in terms of potential growth. It also took several years for ISO 9000 quality management standards
to gain traction after they were published in 1987. According to an article in Wikipedia, there are over 1 million organizations in the world with ISO 9001 certification (the number was updated since the original version), about 33,000 in the US.
Solution providers or professionals with the best chances of success in this new field generally have management experience and relationships with management in marketing, human resources, finance, and with CEOs and boards, and are open to learning about the processes of human capital management, metrics, reporting and stakeholder engagement. In the best of cases, they have worked with many of the key engagement tools outlined above, from culture and brand alignment, to rewards and recognition and human capital analytics.
Build a New Toolkit Through Partnerships
Very few of even the largest advertising or consulting businesses handle all business with in-house employees; most have some degree of managed outsourcing business based on building established relationships in key sectors.
One of the key services of the Enterprise Engagement Alliance at TheEEA.org
is to help organizations build new businesses to profit from the new focus on stakeholder engagement by obtaining the expertise, business relationships, and marketing support to build a new business or division aligned with their capabilities, expertise, relationships, and passions.
Contact the Enterprise Engagement Alliance at Bolger@TheEEA.org
for a complimentary concierge service to help you find the appropriate solutions for your needs.
Here is just a sampling of the types of services your engagement agency or advisory service can bring to clients or from which your organization can potentially benefit. These are among many different types of solution providers who can help address each of the issues of stakeholder engagement, but without a qualified internal or external “general contractor” these programs independently often produce little to no measurable results.
Stakeholder Engagement and Human Capital Education and Certification
The Enterprise Engagement Alliance
is the only organization focusing specifically on stakeholder engagement implementation and human capital management, metrics, and reporting across the enterprise. Annual individual and corporate membership includes two books and a series of training videos, along with an optional customized live video or in-person program customized to your organization’s needs, and other professional or business marketing benefits.
BCAT Brand Alignment
provides the foundation for effective stakeholder engagement: a consensus. It provides a strategic, time-efficient process to establish an enterprise brand and define what each person looks like on their best day in terms of focus and spirit—the foundation of any recognition or engagement effort.
Appreciation at Work
provides a simple, easy-to-implement process to authentically and sustainably develop and promote an organization’s purpose, values, or other mission. The process starts with identifying the organization’s purpose and the actions and attitudes that will help fulfill it, and then educates all management and employees on how to express appreciation appropriately to their associates in a consistent manner.
Business Operating Systems
Catalyst Performance Group
helps organizations implement the foundation of any successful human capital management plan: a system for developing and managing a business plan across the enterprise, establishing priorities, measuring, and sharing results, and continually improving. Catalyst Performance Group guides companies of all sizes on the creation and maintenance of a process designed to keep people focused on consensus-based goals in a manner that saves time, improves the chances of success, and enhances stakeholder experiences by reducing “fire drills.”
Human Capital Management, Reporting, and Analytics
The Engagement Agency
is an advisory service for organizations shifting to a profit-center oriented approach to people management, including formal ISO 30414 Human Capital Management-based human capital management and ISO 10018 People Engagement enterprise engagement plan, gap analyses, metrics, reporting strategies designed to support organizational goals, and analyses for investors. A business development and training service for engagement solution providers seeking to enter or expand into this new field.
is a ground-breaking analytics firm that can help clients rapidly develop and track critical human capital metrics connected to financial results with reports aligned with ISO 30414 Human Capital management standards.
helps enhance a sense of financial safety to employees by providing a powerful human resources support system that includes a monthly scheduled appointment with employees each month and a comprehensive approach to helping them cope with financial, health, or other issues, including cash flow challenges.
Incentives, Rewards, Recognition, Motivational Events and Gifting
is a division of the Enterprise Engagement Alliance dedicated to help organizations and their solution providers achieve optimal results from the use of incentives, recognition, rewards, gifting, loyalty, and promotional events. It was founded to help educate organizations about effective practices, measurability, and availability of solution providers that can help develop and implement more effective programs.
Enterprise Engagement Technologies
provides a comprehensive platform to support employee engagement and ESG (Environmental, Social, Governance) by powering stakeholder engagement as well as the environment through a tree gifting program. Solutions include the ability for small to medium-size businesses to quickly set up and maintain SaaS employee engagement platforms. Larger enterprises use the robust Power2Motivate enterprise engagement technology to manage assessment and feedback performance, communications, learning, collaboration, recognition, analytics, on a single platform touching every type of stakeholder. Both are powered by its Global Rewards solution serving 185 countries.
is a simple to deploy and manage smart phone recognition application specifically designed for the health care industry but able to support any organization. They system can be set up rapidly and when used in conjunction with a properly designed recognition program has been demonstrated to help reduce staff turnover.
Fire Light Group
. Creators of highly customized experiences for all types of organizations, including incentive programs, conferences, association meetings, led by a team with decades of experience and involvement with industry research.
Lorandus Meetings & Communications.
A specialist in designing and choreographing every manner of business events to accomplish concrete goals through a thorough understanding of the objectives, audiences, the budget, and the best platforms for accomplishing communications, learning, or other goals that build community and common purpose.
. A boutique business experience company with decades of experience creating carefully crafted events for demanding audiences and now supporting 360-degree engagement strategies and technologies.
Channel and Sales Engagement
HMI Performance Incentives
. A full-service performance improvement company focused on the channel, sales, and customer support engagement initiatives, based on developing clear goals and addressing the key levers needed for success, including appropriate rules, communications, learning reinforcement, events tied when appropriately to meaningful corporate social responsibility experiences, and communications.
Enterprise Engagement and Communications
. A full-service incentive, motivational event, and engagement agency experienced with engaging customers, employees, supply chain and distribution partner through multi-media communications, learning, incentives, experiences, motivational events.
Human Capital Reporting Certification
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Master the “S” of Environmental, Social, Governance (ESG), A.k.a. Stakeholder Capitalism
The Enterprise Engagement Alliance at TheEEA.org
is the world’s first and only organization that focuses on outreach, certification and training, and advisory services to help organizations achieve their goals by fostering the proactive involvement of all stakeholders. This includes customers, employees, distribution and supply chain partners, and communities, or anyone connected to an organization’s success.
Training and Thought Leadership
Engagement Digital Media and Marketplaces
Enterprise Engagement Advisory Services
Organizations of all types develop strategic Stakeholder Capitalism and Enterprise Engagement processes and human capital management and reporting strategies; conduct human capital gap analyses; design and implement strategic human capital management and reporting plans that address DEI (Diversity, Equity, and Inclusion), and assist with managed outsourcing of engagement products and services.
Human resources, sales and marketing solution providers profit from the emerging discipline of human capital management and ROI of engagement through training and marketing services.
Investors make sense of human capital reporting by public companies.
Buyers and sellers of companies in the engagement space or business owners or buyers who seek to account for human capital in their mergers and acquistions.
For more information:
Contact Bruce Bolger at Bolger@TheICEE.org
or call 914-591-7600, ext. 230.