The links between employee engagement, leadership and increased sales
By Deb Calvert
Every sales organization shares the same challenges: Keeping high-performing and high-potential sales people on the team, finding ways to boost sales productivity, retaining customers and keeping them satisfied in a competitive marketplace and driving top line revenue for bottom line growth.
Sales enablement and a host of quick fix solutions promise to do it all. However, they often disappoint, not coming through as the “cure all” that was anticipated. That’s because those fixes are too small and can’t be sustained. There’s only one magic bullet that, according to reams of research, actually delivers in all those important areas.
Sadly, this true solution is often overlooked. It may seem too lofty, too theoretical, too much of a luxury. It’s none of these. The true solution is concrete, within reach and a business imperative. It’s employee engagement.
In the average company, up to 80 per cent of employees are moderately engaged or actively disengaged. That means only two out 10 employees are actively engaged in their work. That’s why business results suffer and there seems to be a revolving door of employees coming and going. It is why customers are dissatisfied and why sellers struggle mightily to attain their quotas.
What is employee engagement?
According to a CEB report:
- Employee engagement is, “a heightened emotional connection that the employee feels for his/her organization, that, in turn, influences him/her to apply additional discretionary effort to his/her work.”
- “Emotional commitment drives effort. Emotional commitment is four times as valuable as rational commitment in producing discretionary effort. Indeed, the search for a high-performing workforce is synonymous with the search for emotional commitment.”
The emotional commitment triggers a domino effect of business benefits. Here’s how it works:
- Emotionally connected employees stick around, they are less likely to leave. “Engagement is the key to performance and retention. Highly committed employees are 87 per cent less likely to leave than employees with low levels of commitment,” the CEB report stated.
- The emotional connection results in additional discretionary effort, too. The outcome? Significantly higher rates of productivity. More output. Less downtime, absenteeism and tardiness. Higher quality, less rework. More work getting done in less time. Research from Jim Kouzes and Barry Posner in Great Leadership Creates Great Workplaces demonstrates that, “The best leaders elicit three times the amount of talent, energy, commitment and motivation from employees compared to their counterparts.”
- With employees who stick around and improvements in productivity, the next natural result of employee engagement is a boost in customer satisfaction. A report from Gallup stated, “Organizations with above-average levels of employee engagement reap 50 per cent higher customer loyalty levels.”
- More customer loyalty produces higher top line revenue. “Employee engagement scores were 21 per cent higher in double digit versus single digit growth companies.” When sales people stay in their jobs, they maintain customer relationships and secure more repeat business. This, too, helps with revenue growth.
- It’s not just top line, the bottom line is also favourably impacted by increases in employee engagement. The revenue growth plus expense reductions (from less money spent on recruiting, hiring, onboarding and fewer errors, less overtime and less customer churn) result in stronger profit margins. The Gallup Q12 Meta-Analysis reported that in one study of 23,910 business units, when the top quartile and bottom quartile engagement scores were compared, those in the top quartile averaged 12 per cent higher profitability.
Customer satisfaction and loyalty are directly linked to employee engagement, especially the engagement of sales professionals. This domino effect all begins with employee engagement. In fact, DDI’s white paper Employee Engagement: The Key to Realizing Competitive Advantage stated that, “engagement is the primary enabler of successful execution of any business strategy.”
What’s the secret to increasing employee engagement?
If a business can get all these benefits by simply boosting employee engagement, the question is: How can an organization boost employee engagement?
The best way to boost employee engagement is by developing leaders and managers. According to The Corporate Leadership Council, “The manager has tremendous impact on employees’ levels of emotional commitment to the team, organization and job.”
No other factor matters more. Kouzes and Posner measured ten demographic variables (age, country, job title, etc.) and found that no demographic variable made a significant impact on the level of engagement. They also measured thirty discrete behaviours of leaders and found that each of these behaviours, alone, could have a double-digit impact on improving engagement.
Clearly, the attributes and activities of a manager have a direct correlation to an employee’s emotional commitment and this translates into business results. According to Gallup, companies that increase their number of talented/trained managers (versus untrained) and double the rate of employee engagement because of it achieve, on average, 14.7 per cent higher earnings per share than their competition.
According to Kouzes and Posner, this strongly suggests that sales organizations will be more successful when sales managers participate in leadership development programs and learn the behaviours of leaders, like those found in the evidence-based framework of leadership known as The Five Practices of Exemplary Leadership®.
The Five Practices are directly linked to employee engagement which, in turn, unleashes that domino effect of business benefits. For sales teams that want to retain their top talent, improve sales productivity rates, decrease customer churn and experience both top-line revenue growth and improved profitability, this is a true magic bullet. It all starts with leadership development for sales managers, a small investment that yields huge and long-term dividends for the entire organization.
One more link that matters
The benefits of employee engagement are unleashed by leadership development. This happens inside an organization, most notably in the way supervisors interact with their direct reports.
New research shows that additional benefits occur when sellers more frequently exhibit leadership behaviours as they interact with their buyers. In a panel study commissioned by Santa Clara University, 530 business-to-business buyers said they would be more likely to meet with and more likely to buy from sellers who demonstrated these thirty leadership behaviours.
Sellers who know how to engage buyers in these ways report higher levels of success and satisfaction in their work. In over 500 stories from sellers about their own “personal best” sales, leadership behaviours were apparent over 90 per cent of the time. However, sellers did not attribute their success to these behaviours. Instead, they believe their success is the result of persistence, luck and selling skills.
In other words, buyers are looking for and responding to something that successful sellers aren’t even aware they are doing well. The gap is even more pronounced where sellers are under-performing and have no awareness that leadership behaviours would make a difference.
This is why leadership at every level is critically important. Developing leaders – in management and in front line sales – is the pathway to organizational success.
Deb Calvert is the president of People First Productivity Solutions. Attend Calvert’s presentation, “5 Ways You Can Boost Company Sales,” on Feb. 1 at 10 a.m.