“Internal stakeholders” refers to employees. A lot of companies tend to focus most of their attention on external stakeholders, which would typically include customers and potentially investors. There is nothing wrong with that approach, per se. You obviously want to pay a lot of attention to the people who buy your product/service (customers) and the people who help you have money to do it better (investors, if you have any). But when companies focus almost all their attention there, they start to lose a degree of competitiveness. Why? Because you also need to focus on internal stakeholders, i.e. your employees.
Simplest way to put this forward: if your employees aren’t invested in the work, eventually they will leave. Turnover and attrition harm businesses. There is a bottom-line cost, yes. But there are also dozens of intangible costs, such as the bond between employees (now somewhat frayed), or knowledge. We’ve all worked in offices where only person seems to know certain codes or where the copy paper is. Those seem like very small things, and perhaps they are — but when that person leaves, that office is often in chaos for 1-3 weeks. Those are the costs we don’t see.
The unfortunate aspect is that many (not all) people have an attitude of “If they leave, we’ll replace them.” I completely understand this attitude. When you open new headcount and post a new job, usually 50+ (if not 3-4x that) applications roll in. So, clearly there are people out there who have the skills to do the jobs in your company. That’s good. Hiring, recruiting, on-boarding, and training are all costs, however.
That’s the final piece of this puzzle: companies tend to be cost-averse. (Again, completely logical and nothing wrong with that.) When you combine all the elements above around pre-existing attitudes on employees and not wanting to be cost-heavy, many concepts fall to the background. A good example would be employee engagement. Many people claim they’re doing it or have some program/software around it, but they’re not really doing it. It’s predominantly lip service. When you treat internal stakeholders that way, they don’t want to stay and they don’t work as hard. Neither benefits your growth.
So, are there cost-effective (or free) ways we can build employee morale for our internal stakeholders? Yes! Here are three.
Community of strategy model: This is from a Harvard Business Review article on employee efforts at the New York Public Library; it’s also summarized here. In the spring of 2014, NYPL allowed anyone on the staff to propose a strategic discussion with a senior leader. It didn’t matter where you were in the reporting structure, etc. Anyone could drive strategy forward if the idea covered all the bases. The main takeaway:
Staff was energized by the opportunity to shape how the library worked. As a core team member put it, “We entered the process with the perspective of employees and came out with the perspective of leaders.” They were deeply appreciative of the chance to interact with, and learn from, peers across NYPL, something that rarely happened otherwise. They were excited to master new skills and knowledge relevant to librarians such as sophisticated data collection and analysis.
Bear in mind: this was completely free. They just created an internal program whereby people could more easily propose and discuss ideas. And it drove all key metrics for employees, which helped NYPL overall.
Storytelling: Nothing resonates with the human brain more than stories. From an interview on Wharton’s website, here’s something the Ritz-Carlton chain does now:
They’ve been doing storytelling forever. What they did – and this is what I try to tell other companies to copy, because it’s free — in a Ritz-Carlton hotel, every day, every department meets for 15 minutes. It’s a group meeting. And instead of just going over the day’s events, here’s what the housekeepers need to know about this floor, or whatever, they start telling stories. And they ask the question of the employees: “Is there a great customer experience that you’ve been a part of, that you can share with the rest of us?” I was part of one of these. I checked it out. It was really fun. They start sharing stories with one another, and then they start competing for who has better stories. They get recognized publicly. That was the key. The president of the Ritz-Carlton said, “The key is, you are recognized publicly for being the hero of your customer’s story.”
Stories are free. And it drives the engagement of internal stakeholders, while also referencing customers. How easy is this?
“Keystone moments:” Consider this, from a Forbes case study:
- Aviva ’s continual challenge is to figure out how to be more efficient. However, a few years ago, they were finding that whatever they tried to improve their service resulted in things getting worse. Therefore, they decided they had to try something different and started using a ‘systems thinking’ approach. This allowed them to focus on what matters to customers and remove any ‘work’ that wasn’t of value to customers. Doing so has meant they have been able to increase efficiency, improve satisfaction, reduce complaints, reduce the number of customers calling back, reduce resource requirements, improve satisfaction and provide the customers with a better deal and service. Meanwhile, where this approach has been implemented, customer satisfaction has improved significantly and is now in the region of 80-90%, whereas employee engagement is now 70% where before it was below 50%. Finally, by focusing on doing the right sort of ‘work’, this approach has also allowed them to save tens of millions of pounds every year in operational costs.
This was essentially a change in thinking. It may have involved some operational costs, yes — but look at the benefits. Customers and internal stakeholders are improving! And it’s basically free or an overhead cost.
The other big one here is “respect” and “face-to-face communication,” of course. Teach your front-line managers about that and you’ll have much more engaged internal stakeholders. Don’t let your managers hide in platforms and programs and not talk to people.
What else would you add about motivating internal stakeholders?