Employee empowerment is a powerful strategy. Used properly it can energize a company’s culture, increase profitability, and positively impact the customer experience. Yet, far too many organizations fail to empower their employees adequately, leading to frustrated teams and even more frustrated customers.
So, what is employee empowerment and how can it have a positive impact on organizational culture?
At its core, empowerment is about giving employees the freedom and authority to adapt and respond in real-time with solutions that help the customer. Empowerment requires organizational decision-makers to share information, resources, and power so that employees make decisions and solve problems on the spot.
Many of the greatest customer experience brands are known for their empowerment. Ritz-Carlton famously empowers its employees to spend up to $2,000 to make a customer happy, and you’ll likely never find a Starbucks barista who’s not empowered to give you a free drink or coupon if you have a service issue.
These companies understand their customer’s lifetime value. They know that the risk that a strategically empowered employee might give away too much pales in comparison to the potential loss of a customer.
These organizations also understand the internal impact that empowering employees can have on a customer-centric culture. Here are a few ways empowerment impacts organizational culture:
Empowerment Makes for More Loyal Customers
If your company ethos is centered on providing value for your customers (and why wouldn’t it be?), then it makes perfect sense to give your employees all of the tools and authority they need to make that happen.
A study by the Gallup Organization found “that organizations that empower employees experience 50% higher customer loyalty.”
Empowerment Makes Experiences Hassle Free
No customer is happy when a frontline rep says, “Unfortunately, I can’t do that for you. I’ll need to check with…” Customers today are more rushed and stressed than ever. They want effortless, hassle-free experiences and will seek out organizations that are easy to do business with.
Every time an organization has to call someone back, transfer someone, or tell a customer “no” simply because an employee is not empowered, that organization is damaging the customer’s experience as well as its relationship with the customer.
Empowered Organizations Are More Profitable
Pepperdine University identified 40 of the most empowered companies and compared their financial performance across over a dozen categories to S&P 500 averages; their results clearly indicated that empowerment correlates with financial success.
But what does profitability have to do with culture?
While being profitable is certainly no guarantee of an empowering, positive culture, being unprofitable virtually always guarantees a disempowering, unpleasant culture. Budget cutbacks, staff layoffs, and people jumping ship generally don’t make for very empowering environments.
Empowered Employees Are More Satisfied
One study surveyed 1,168 employees from 31 different foundations and found that “foundation staff members are most satisfied in their jobs when they feel empowered in their day-to-day experiences at work.”
Employees don’t want to work handcuffed; they don’t want to have to tell customers “no.” Empowering employees gives them more autonomy and tells them that they are trusted to make decisions, which leads to more satisfaction.
Empowered People Have Pride In Their Work
When you endow your employees with trust and authority it contributes to an increased feeling of pride in their work and in their workplace. Workers who are proud of their company report feeling more engaged and satisfied with their jobs, meaning that employee engagement is a path to all of the benefits that tend to follow a highly-satisfied workforce: less turnover, better teamwork, increased productivity, etc.
Think of the organization as a community. When residents are proud of where they live, they are more likely to keep areas clean, socialize together, and work toward improving things for the neighborhood as a whole.
Instilling a culture of empowerment requires dedication from every level of leadership; if those at the top don’t believe in it, there’s no way to get buy-in throughout the organization.
Like everything, empowerment has its limits and should be applied strategically and with an eye toward risk and reward; but if you can empower more employees to help deliver your customer experience, you’ll find that your culture and your customers will both benefit.
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