Stop looking out of the window and start looking in the mirror (2014)

IPA Excellence Diploma – Final Assignment
“I believe that the future of brands, brand communications or brand communications agencies…”
Candidate number: 4023
Word count (excluding the abstract, footnotes and bibliography): 7,262
Abstract (100 words):
Stop looking out of the window and start looking in the mirror
Our economy has a productivity problem. The solution is to address our engagement deficit and I
believe that marketers are best placed to lead this.
However, marketing professionals have traditionally concerned themselves with external demand-
side growth from customers rather than internal supply-side performance from employees. This has
to change.
If marketers can embrace this opportunity, they will not only help themselves in their quests to
become the business leaders of tomorrow; they will also improve their organisations’ performance
and contribute to the wider health of the UK economy.

Stop looking out of the window and start looking in the mirror
In a free market economy, success or failure is determined by delicately balancing supply and
demand. Supply and demand is the basis for all decisions regarding investment, production and
distribution1
. This is applicable to government economists, one-man bands and every single
organisation in between, be they large or small. No business can avoid this balancing act.
Why is this important when considering the future of brands, brand communications, brand
communications agencies or indeed the wider discipline of marketing?
In a free market economy, I believe marketers should be the makers of markets. In other words,
they should be the intermediaries between the internal supply capability of their organisations and
the external demand creation of their customers. I believe they should have a vested interest in
both sides of the balance. However, I do not believe that they do.
The Chartered Institute of Marketing (CIM) defines marketing as “the management process
responsible for identifying, anticipating and satisfying customer requirements profitably.”2
Use of
the adverb ‘profitably’ implies an understanding of the relationship between demand-side gain and
supply-side cost, but this definition really just serves to exemplify my point. Marketers worship at
the high altar of the customer. Their focus is outside their organisations and little time is given to
internal considerations.
But internal considerations have never been more important. And by internal considerations, I really
mean employees, people. We live in a people economy. In 2012, the service sector accounted for
79% of total UK economic output and for 83% of jobs3
. Since mid-2009, when UK growth resumed
after the financial crisis, services industries have been the main engine of growth. And the growth of
services output accounts for the entire cumulative rise in UK GDP of 5% in just over four years of
recovery so far4
. But while GDP growth is healthy, productivity is actually in decline – we have a
problem on the supply side. I believe we, as marketing professionals, have a responsibility to do
something about this.
Customers are important people, but I believe employees are even more important. Marketing
professionals have long spoken about the importance of engaging customers and consumers
without addressing what I believe is the more pressing need – engaging employees. Jan Gooding,
Aviva’s group brand director, has written that “there is a wonderful correlation between employee
engagement and customer satisfaction”5
and the real pay-off is that satisfied customers create
sustainable profits and growth for businesses. Marketers must retain a healthy eye on demand
creation, but I believe the time has come for a change in focus – towards the prioritisation of
employees. Taking responsibility for both sides of the balance will give them the opportunity to
transform their roles and become the true market makers and indeed business leaders of the future.
1
Gregory, P. & Stuart, R., Comparing Economic Systems in the Twenty-First Century (7th edition)
2
The CIM, 2009, Marketing and the 7Ps – a brief summary of marketing and how it works
3
Office for National Statistics, March 2014, Workforce Jobs
4
Kupelian, B., November 2013, How the services sector is rebalancing Britain’s economy, PwC
5
Cited in ‘Building a brand from the inside out’ in Marketing Magazine, June 2011

The UK ‘productivity gap’ is a problem
Figures released earlier this year by the Office for National Statistics show that the UK economy
experienced its strongest growth since 2007 in 2013.
Figure 1 – UK GDP
growth, quarter on
previous quarter6
Demand is picking up post-recession and consumer confidence reached its highest point since early
2008 at the start of 2014.
Figure 2 – UK
consumer confidence7
However, while demand is strengthening, supply-side productivity decreased by 0.3% in the third
quarter of 2013 based on output per hour8
. And analysis suggests that UK productivity is stagnating
at best.
Figure 3 – Output per
worker index versus
20109
6
Office for National Statistics, Q4 2013, Gross Domestic Product Preliminary Estimate
7
GfK NOP UK
8
Office for National Statistics, Q3 2013, Labour Productivity
9
Economics Help, www.economicshelp.org

On top of this, changes in productivity following our most recent recession are tracking significantly
behind those seen following the recessions of 1973, 1979 and 1990.
Figure 4 – Output per
worker during UK
recessions, seasonally
adjusted10
The Office for Budget Responsibility has warned that Britain’s recovery could come off the rails if
labour productivity and wage growth do not rally in the second half of the year11
. Our ‘productivity
gap’ is a problem. Fixing it must be a priority. And I believe marketing can play a pivotal role in
achieving this.
Fixing the productivity gap will have widespread benefits
The benefits of productivity growth can be distributed in a number of different ways at an individual,
business or industry level:
 to the workforce through better wages and conditions;
 to shareholders through increased profits and dividend distributions;
 to customers through lower prices;
 to the environment through more stringent environmental protection;
 to governments through increases in tax payments (to fund social or environmental programs).
Productivity growth is important to businesses because it means that they can meet their obligations
to workers, shareholders, and governments and still remain competitive or even improve their
competitiveness in the market place.
And at the national level, productivity growth raises living standards because more real income
improves people’s ability to purchase goods and services, enjoy leisure, improve housing and
education and contribute to social and environmental programs.12
“Over long periods of time, small differences in rates of productivity growth compound, like interest
in a bank account, and can make an enormous difference to a society’s prosperity. Nothing
contributes more to the reduction of poverty, to increases in leisure, and to the country’s ability to
finance education, public health, environment and the arts.”13
10
ONS, October 2012, The Productivity Conundrum, Explanations and Preliminary Analysis
11
Office for Budget Responsibility, March 2014, Economic and fiscal outlook
12
Parham, D., Definition, importance and determinants of productivity
13
Blinder, A. & Baumol, W., 1993, Economics: Principles and Policy

Employee engagement holds the key
The MacLeod Report to government, published in July 2009, defines employee engagement “as a
workplace approach designed to ensure that employees are committed to their organisation’s goals
and values, motivated to contribute to organisational success and are able at the same time to
enhance their own sense of well-being.”14
The report argued that employee engagement is the
difference that makes the difference. The then Secretary of State for Business, Innovation and Skills,
Lord Mandelson, said that “this timely report sets out for the first time the evidence that underpins
what we all know intuitively, which is that only organisations that truly engage and inspire their
employees produce world class levels of innovation, productivity and performance.”
The Chartered Institute for Personnel and Development (CIPD) has identified employee engagement
as one of the three main drivers of sustainable organisational performance15
.
The UK Commission for Employment and Skills’ (UKCES) produced a report in 200916
reviewing all
the evidence over many years surrounding the central question of why some firms have substantially
better labour productivity than others. UKCES defines high performance working (HPW) as “a
general approach to managing organisations that aims to stimulate more effective employee
involvement and commitment in order to achieve high levels of performance”. They go on to say
that “importantly, the HPW approach is specifically designed to enhance the discretionary effort
employees put into their work, and to fully utilise and further develop the skills that they possess […]
HPW is concerned with the efficient and effective use of the workforce but with an emphasis on
creating good quality work, rather than simply focussing on making employees work harder.”
This is the central premise of employee engagement17
.
Why employee engagement should be on the agenda
The Corporate Leadership Council (CLC) has recently shown that 70% of business leaders now
believe that engagement is critical for their businesses18
, and some argue that employee
engagement is a key element to the success of any organisation19
.
However, despite the strength of advocacy behind this issue, the UK still lags behind other large
economies. A 2012 survey by Towers Watson showed that just 27% of employees in the UK are
‘highly engaged’, with an equivalent proportion of employees being ‘disengaged’. These
engagement levels compare unfavourably to a global average of 35% ‘highly engaged’20
. This lack of
engagement by UK employees has been demonstrated by research for over a decade.
14
MacLeod, D. & Clarke, N., 2009, Engaging for Success: enhancing performance through employee
engagement. A report to Government. London, Department for Business, Innovation and Skills.
15
CIPD, 2011, Shaping the Future
16
UKCES, 2009, High Performance Working: A synthesis of key literature
17
ACAS Policy Discussion Papers, 2010, Building employee engagement
18
Corporate Leadership Council, 2011, Building Capital Engagement
19
Hayward, S., 2010, ‘Engaging employees though whole leadership,’ Strategic HR Review 9
20
Towers Watson, 2012, Global Workforce Study

 A 2001 Gallup study21
found that 63% of the UK workforce was non-engaged; 17% were
engaged; and 20% were actively disengaged.
 A survey by Flade showed that 80% of the UK workforce lacked any real commitment to their
jobs22
.
 A 2004 study by the CLC found that just 24% of employees were highly engaged23
.
 Truss et al found that just over one in three employees (35%) were actively engaged. They also
reported that less than one in five employees (18%) were engaged on a daily basis, with 59%
reporting engagement once a week, with the remainder reporting engagement less frequently24
.
 Kenexa compared UK engagement levels to those in other large world economies in 2009, and
the UK ranked 9th amongst the 12 largest economies as measured by GDP25
.
 The CIPD reported in 2010 that only 8% of employees were strongly engaged26
.
Employee engagement is not just an emotional concern though. Reducing the engagement deficit in
the UK would have a significant positive effect on business growth. Analysis indicates that were the
UK to move its engagement levels to the middle of the top quartile of the leading 27 economies in
the world (accounting for 80% of global GDP in 2011) such as that for the Netherlands this would be
associated with a £25.8bn increase in GDP27
. Researchers at Gallup using different methodologies
have produced even larger estimates28
.
Establishing the link between employee engagement and productivity
Improvements in business performance will arise through increased productivity, and there is a
strong evidence base that links employee engagement to this business outcome. Research
sponsored by the CIPD demonstrated that the impact of employee engagement on productivity
arose, at least in part, because engaged employees were more involved and socially connected with
their work, allowing them to develop better solutions29
. Further analysis of data from that project
identified a 0.41 correlation between employee engagement and task performance amongst UK
employees. A focus on engagement is also likely to be associated with the positive exercise of
discretion in the workplace30
and a reduction in counterproductive behaviour31
.
21
Buckingham, M., 2001, ‘What a waste’, People Management
22
Flade, P., 2003, ‘Great Britain’s workforce lacks inspiration’, The Gallup Management Journal
23
Corporate Leadership Council, 2004, Driving Performance and Retention Through Employee Engagement
24
Truss, K., Soane, E., Edwards, C., Wisdom, K., Croll, A. & Burnett, J., 2006, Working life: employee
attitudes and engagement, CIPD
25
Wiley, J., Herman, A., Kowske, B., 2012, ‘Developing and Validating a Global Model of Employee
Engagement,’ Handbook of Employee Engagement: Perspectives, Issues, Research and Practice
26
Alfes, K., Truss, C., Soane, E., Rees, C. & Gatenby, M., 2010, Creating an engaged workforce: findings from
the Kingston employee engagement consortium project, CIPD
27
Rayton, B., 2012, Engage for Success, University of Bath School of Management, data supplied by Kenexa
28
Cited in Fairhurst, D., 2008, ‘Am I ‘bovvered’?: Driving a Performance Culture through to the Front
Line,’ Human Resource Management Journal, 18
29
Alfes, K., Truss, C., Soane, E., Rees, C. & Gatenby, M., 2010, Creating an engaged workforce: findings from
the Kingston employee engagement consortium project, CIPD
30
Rich, B. L., Lepine, J. A., and Crawford, E. R., 2010, 'Job Engagement: Antecedents and Effects on Job
Performance,' Academy of Management Journal, 53
31
Sulea, C., Virga, D., Maricutoiu, L.P., Schaufeli, W., Dumitru, C.Z., Sava, F.A., 2012,’Work engagement as
mediator between job characteristics and positive and negative extra-role behaviours’, Career Development
International, Vol. 17 Issue 3

Gallup data from 23,910 business units demonstrated that those units with engagement scores in
the top quartile averaged 18% higher productivity than those units in the bottom quartile32
. The CLC
analysed the engagement of 50,000 employees in 59 organisations from 27 countries and found that
71% of companies with above average employee engagement achieved company performance
above their sector average while only 40% of companies with below average employee engagement
achieved above average company performance. The CLC concludes that “by increasing employees’
engagement levels, organizations can expect an increase in performance of up to 20 percentile
points and an 87% reduction in employees’ probability of departure.”33
One mechanism for increasing the overall productivity of an organisation is the enhancement of the
workforce’s desire to exceed performance expectations. Instilling a sustained culture of high
performance within a workforce is the key aspiration of many leadership teams, and employee
engagement can play a central role in achieving this goal. Research from the Hay Group linking
employee survey data to performance ratings showed that highly engaged employees were 10%
more likely to exceed performance expectations34
. Similarly, Towers Watson reported that the
highly engaged were more than twice as likely to be top performers, with almost 60% of them
exceeding or far-exceeding performance expectations35
.
Why this matters now
We live in a people economy. The total contribution of services to UK gross value-added has risen
from around 55% in 1970 to nearly 80% in 2012.
Figure 5 – Long-term
shift towards services
in the UK36
The services sector has been the main engine of employment growth, since the mopst recent
recession began, resulting in the creation of around one million extra jobs in the UK, despite
cutbacks in the public sector. And the rebalancing of the UK economy appears to be taking place
primarily within the services sector.
32
Harter, J.K., Schmidt, F.L., Killham, E.A. & Agrawal, S., 2012, Q12® Meta-Analysis: The
Relationship Between Engagement at Work and Organizational Outcomes. Gallup Organization
33
Corporate Leadership Council, 2004, Driving Performance and Retention Through Employee
Engagement
34
Royal, M. & Yoon, J., 2009, ‘Engagement and Enablement: the key to higher levels of individual
and organisational performance’, Journal of Compensation and Benefits 25
35
Wyatt, W., 2008 –2009, ‘Continuous Engagement: The Key to Unlocking the Value of Your People During
Tough Times’, Work Europe Survey
36
Cited in Sentance, A., How the services sector is rebalancing Britain’s economy, PwC

Figure 6 – Services are
driving the UK
recovery37
In a services context, the most important organisational resource will almost always be staff. Failing
to acknowledge this and the vitally important role they play in producing and delivering the service
will damage the brands, for which they are the physical manifestation38
. With 83% of all UK
employees working in the services sector and with this figure set to increase further as the economy
orients itself even more towards services, it has never been more critical to engage the people who
will make the difference.
What has this all got to do with ‘me’?
That is a very reasonable question for a marketer or an agency bod to ask.
Workforce productivity is not a priority for marketers. IBM’s 2012 Global Chief Marketing Officer
Study implies this through the conspicuous absence of any internal considerations in the list of
recommended improvements made by CMO respondents:
1. Understand and deliver value to empowered customers;
2. Create lasting relationships with those customers;
3. Measure marketing’s contribution to the business in relevant, quantifiable terms39
.
Reviewing the reading list for this diploma, which includes many of the core marketing textbooks of
recent years, reveals how few make any reference at all to employees. By way of example, two
highly regarded works have become staples in agencies and no doubt marketing departments
around the country but contain nothing on supply-side considerations.
Byron Sharp’s book, How Brands Grow, is hugely respected and was voted best summer book of
2013 by readers of Advertising Age. You cannot grow brands without a productive and therefore
engaged workforce, as we have seen, and yet it contains no mention of employees. Another ‘bible’
of brand communications specialists is Les Binet’s and Peter Field’s Marketing in the Era of
Accountability. Two significant and memorable points that I took from their work are the
importance of a balanced scorecard and the importance of prioritising penetration over loyalty,
something that Sharp echoed. However, their balanced scorecard makes no reference to employees
and effectiveness is only defined in the context of consumers.
37
Cited in Sentance, A., How the services sector is rebalancing Britain’s economy, PwC
38
De Chernatony, L. & McDonald, M., ‘Service brands’, Creating Powerful Brands
39
IBM Global CMO Study, From Stretched to Strengthened

So, the question is what has employee engagement and productivity got to do with ‘me’, when my
priority is customers, current and prospective? And the answer is the most customer-centric
organisations are the most employee-centric ones.
‘Employees first, customers second’ is a management philosophy established by Vineet Nayar, the
chief executive of HCL Technologies, the India-based global information technology services
company. The idea is very simple. “We create value in one very specific place: the interface
between our HCL employees and our customers. We call this the ‘value zone’. Every employee who
works in the value zone is capable of creating more or less value. The whole intent of Employees
First is to do everything we can to enable those employees to create the most possible value.”40
A similar concept is that of the ‘promise’, which Colin Mitchell has written about in the context of
emerging company-based brand strategies. Promises are made to customers. Promises are
delivered by employees. He states that “one of the main advantages of the company-based brand
strategy is that it works as powerfully in galvanising internal audiences as it does in persuading
external audiences”41
.
Marketers will face operational and cultural challenges in adopting and implementing an
‘employees-first’ or ‘company-based’ strategy though. Change requires a long-term view, but the
average tenure of a CMO is only 18 months42
and the prevailing business perspective is one of short-
termism43
. Organisations are also bedevilled by rational strategies, when more emotional humanity
would serve them better.44
I believe that the successful marketers of the future will be those market makers, who manage the
totality of the ‘value zone’ or the ‘promise’, caring not just about generating demand but also
improving productivity by engaging the workforce. This will transform their roles from discipline-
specific practitioners to value-adding business leaders.
Towards a new model
In our people economy, workers and customers need to be the centre of management concern.
Successful organisations pay attention to the factors that drive profitability in this new service
paradigm: investment in people, technology that supports frontline workers, revamped recruiting
and training practices, and compensation linked to performance for employees at every level.
The service-profit chain, developed from analyses of successful service organisations, puts ‘hard’
values on ‘soft’ measures. It helps managers target new investments to develop service and
satisfaction levels for maximum competitive advantage, widening the gap between service leaders
and their merely good competitors.
40
Naheer, V., 2010, ‘Why I Put My Employees Ahead Of My Customers’, Forbes
41
Mitchell, C., ‘The company brand: looking inside for the vision’, in Brand New Brand Thinking, ed. Baskin, M.
& Earls, M.
42
Hughes, M, 2012, ‘5 things chief marketing officers need to do to stay on top of their game’, Business Insider
43
Cox, G., 2013, Overcoming short-termism within British business – the key to sustained economic growth
44
Cited by Robert Rowland Smith in relation to his concept of ennovation

The service-profit chain establishes relationships between profitability, customer loyalty, and
employee satisfaction, loyalty and productivity. The links in the chain are as follows. Profit and
growth are stimulated primarily by customer loyalty. Loyalty is a direct result of customer
satisfaction. Satisfaction is largely influenced by the value of services provided to customers. Value
is created by satisfied, loyal, and productive employees. Employee satisfaction, in turn, results
primarily from high-quality support services and policies that enable employees to deliver results to
customers.
Figure 7 – Links in the service-profit chain45
The service-profit chain is also defined by a special kind of leadership. CEOs of exemplary service
companies emphasise the importance of each employee and customer. For these CEOs, the focus
on customers and employees is no empty claim drafted for an annual management meeting. This
heralds the importance of servant-leadership but also brand purpose, vision, culture and values to
attract the right employees and indeed the right customers.
Attracting, engaging and retaining talent is, therefore, vital to creating customer engagement and, in
turn, driving profitability, growth and shareholder return.
Figure 8 – The new model for marketing-led growth46
“Marketing is the root source of shareholder value,”47
therefore I believe marketers are the people
best placed to deliver this new model. However, this will require change – operational, attitudinal
and behavioural.
45
Heskett, J.L., Jones, T.O., Loveman, G.W., Sasser, Jr., W.E. & Schlesinger, L.A., 2008, ‘Putting the Service-
Profit Chain to Work’, Harvard Business Review
46
Brown, A., 2010, ‘Modernising employee engagement measurement’, Research Live

Organising for success
The end goal of this model is profit and growth, so are we really just dressing up shareholder interest
in new clothes? Back in the 1970s, Milton Friedman stated that “there is one and only one social
responsibility of business – to use its resources and engage in activities to increase its profits.”48
Is
this model any different? I believe it is. Employee engagement will fail, if employers use it simply to
make people work harder rather than creating good-quality work49
. The new model needs a new
way of working.
The successful businesses of the future will become more people-focused, recognise the importance
and value of human relationships and adjust their behaviours to allow more sharing,
interdependence, alliances and collaboration50
. I follow Sisodia et al, who propose a change from an
operational structure, only serving the needs of the shareholder, to a stakeholder one51
, where the
shareholder is one of three equals with customers and employees – “no stakeholder group benefits
at the expense of any other stakeholder group, and each prospers as the others do”52
.
Collaboration will be imperative. And one of the most critical collaborations will be between
marketing and human resources (HR)53
. Companies are increasingly realising that for brand and
business strategies to be aligned, the brand can no longer be driven solely by the work of the
marketing department. A corporate culture that is on-brand, on-strategy and more effective at
delivering results is essential. Equally, marketing needs to be confident that employees will deliver
on their promises, making a strong partnership with HR a necessity. This has recently joined the
agenda of the UK marketing community. One of the pillars of the Marketing Society’s Manifesto for
Marketing is “mobilise the organisation to deliver” and the benefits for both parties – marketing and
human resources – are clear. However, the majority of marketers still fail to collaborate with HR54
.
Marketing can learn from HR.
HR’s primary constituents are the company’s employees. Since a brand’s strength lies in its delivery,
not just communication of its promises, HR can be extremely effective in creating a brand-based
culture through training programmes, new employee orientations and performance evaluations. HR
can play a key role in helping marketing to develop internal communications that demonstrate how
employees should ‘live’ the brand. David Aaker emphasises a company’s need for ‘change agents’,
who embody and live the ideals of the brand55
. By identifying these individuals and aligning their
messages and behaviours, organisations can create a very powerful force of internal role models for
employees to emulate. HR is the function most capable of identifying and encouraging these
employees to participate.
47
Doyle, P., 2008, Value-based marketing
48
Friedman, M., ‘The Social Responsibility of Business is to Increase its Profits’, New York Times
49
50
Gordon, W. & Valentine, V., The 21st Century Consumer – A new model of thinking
51
Sisodia, R., Wolfe, D. and Sheth, J., Firms of Endearment (original theory by R. Edward Freeman)
52
Averell, M., 2013, ‘CSR IS business’, Admap
53
AMA, 2010, Interesting bedfellows: why a teaming of HR and marketing makes sense
54
26% of over-performing businesses can lay claim to marketing working closely with HR versus 14% of under-
performing businesses – cited in Precourt, G., February 2014, Preparing for 2020: Five best practices for
marketers, IAB Annual Leadership Meeting
55
Aaker, D., Aaker on Branding: 20 Principles that Drive Success

And HR can learn from marketing.
By positioning and keeping promises to prospective customers, who might also be future employees,
marketing can bolster HR’s ability to attract and retain employees, who believe in advancing the
company’s brand and business strategies. Marketing can play an expanding role in teaching HR how
to leverage ‘brand’ to attract the best talent and establish behaviours in the workplace that are
aligned to the brand’s values, vision and purpose. Marketing can also apply their expertise in
segmentation, insight, proposition development, channel selection, message delivery and
measurement learnt from years of crafting external consumer and customer communications to
internal communication programmes.
Marketing has the opportunity to transform itself into a discipline with a genuine strategic voice and
the time has come for marketers to team up with HR for even greater business performance56
. Both
teams will reap the benefits57
and such a partnership will represent true organisational innovation58
,
which can make the difference between under-performance and over-performance59
.
Goldman Sachs has made a very conscious effort to integrate marketing and HR
from strategy development to implementation. Their brand is at the core of the
company’s culture, lived by each employee. This is a key differentiator and one
reason for their industry leadership. Internally, marketing employees talk about
cultural practices, not branding programmes. Externally, marketing highlights
the elements of the Goldman Sachs culture that are most important to targeted
customers. Brand and business alignment underscore the intense new-hire
training programme for all new Goldman Sachs employees by, among other
things, explaining how the company’s culture and values relate to customer
experience. And continuous employee research ensures that company initiatives
always meet employee and customer expectations.
Understanding the drivers of employee engagement
Consensus does not exist between academics and practitioners about the drivers of engagement
with different research highlighting different drivers. Truss et al argue that management has the
most significant impact60
, whereas Blizzard suggests that direct relationships with line managers are
more important61
. Cufaude proposes a servant-leadership philosophy62
and others claim that
offering employees empowerment is critical63
. Holbeche and Springett claim that culture and
56
Nazametz, P. & Ruch, W., HR and Marketing: Power Partners
57
Brooksbank, H., 2012, ‘Brand of Brothers – uniting HR and marketing’, HR Magazine
58
Speak, K.D., 2009, Internal brand building: leveraging an innovative collaboration between marketing and HR
59
26% of over-performing businesses can lay claim to marketing working closely with HR versus 14% of under-
performing businesses – cited in Precourt, G., February 2014, Preparing for 2020: Five best practices for
marketers, IAB Annual Leadership Meeting
60
61
Blizzard, R., 2003, ‘Employee engagement: Where do hospitals begin?’ The Gallup Poll Tuesday Briefing
62
Cufaude, J., 2004, in Lanphear, S., 2004, ‘Are Your Employees Highly Engaged?’ Credit Union Executive
Newsletter, 19
63
Lloyd, J., 2004, ‘Offer empowerment to encourage engagement’, Triangle Business Journal, Vol 15, No 1.

purpose are vital64
, whereas Maslach et al believe that it all comes down to more practical
considerations of daily working life65
.
However, I believe that the best, simplest and most encompassing perspective on all the potential
drivers comes from McBain66
.
Organisation Leadership Working life
 Organisational culture
 Values and vision
 The brand – organisational
or product
 Senior management
leadership
 Line management
commitment
 Communication
 Recognition
 Supportive colleagues
 Developing potential
 Clarity of expectations
 Flexibility
 Work/life balance
 Involvement in decisions
 Working environment
I will use this framework as the basis for exploring the application of the new model and will address
four areas, proposing a definition, discussing the benefits and illustrating with examples for each.
1. Brand purpose – from which vision, values and culture cascade
2. Leadership and management – the best styles for encouraging engagement
3. Communication – from the power of advertising to the importance of employee voice
4. Talent management – recruitment, training, support and retention
Towards a shared brand purpose
The context of business is changing. Global megatrends such as climate change, globalisation,
demographic changes and social inequality are creating significant challenges to the traditional
business model, which tends to focus purely on increasing shareholder value. The financial crisis and
other corporate scandals have resulted in a loss of trust in business, and companies must now
ensure they demonstrate the ethical and transparent business practices increasingly demanded by
consumers, employees, governments and corporate investors.
The responsible and sustainable approach to business is therefore becoming firmly established on
the business agenda of many leading organisations. Organisations that seek to thrive in a world of
limited resources and global challenges are making bold decisions, questioning their underlying
business model and strategy to ensure they are accountable for socio-economic and environmental
responsibilities, not just financial issues. The principle of enhancing the societal, environmental and
economic systems within which a business operates is the essence of corporate responsibility and
sustainability. Organisations that embrace this philosophy tend to go the extra mile, developing the
resources on which they depend for their long-term health and contributing to wider global issues.67
64
Holbeche, L. & Springett, N., 2003, In Search of Meaning in the Workplace
65
Maslach, C., Schaufelli, W.B. & Leiter, M.P., 2001, ‘Job burnout’, Annual Review of Psychology, Vol 52
66
McBain, R., 2007, ‘The practice of engagement’, Henley Management Group, Vol. 6, Issue 6
67
CIPD, February 2012, Responsible and sustainable business: HR leading the way

The Accenture UN Global Compact CEO Study in 2010 stated that “companies will need to develop a
broader sense of what value means to society as a whole”68
. In 2011, Porter and Kramer introduced
the concept of shared value and the need for businesses to find and align themselves with the
connection between societal and economic progress69
. 73% of the marketing leaders interviewed
for the Marketing 2020 survey agree that being clear about the brand’s broader societal purpose will
be an important characteristic of winning companies in coming years70
and this is echoed by the
findings of a study by Accenture on behalf of The Marketing Society to find out what makes chief
executives and senior business leaders tick – they believe their key role is to provide vision and
purpose for the company71
. Such a commitment can increase productivity and therefore boost cash
flow72
and Stengel has also suggested that brand purpose can improve shareholder value73
. The
strategic importance of ‘brand purpose’ to an organisation’s leaders is clear, but a strong brand
purpose is also critically important for consumers, investors and, most importantly, employees.
Consumer and investor attitudes are changing in favour of responsible and sustainable business.
83% of UK consumers are influenced by an organisation’s commitment to social responsibility when
buying a product or service74
, and 81% of investors say that responsible business practices are
important to their investment decisions75
. And employees, who are often consumers themselves,
are increasingly looking for more meaningful work and are becoming more demanding around
corporate responsibility issues. An organisation’s demonstration of social and environmental
responsibility is considered an important factor in an individual’s engagement with the organisation,
particularly for Baby Boomers. In order to attract, engage and retain talented individuals among
Generation Y, organisations will need to find ways to make the workplace more meaningful, as this
research highlights an increasing lack of trust in employers among the younger generations76
.
Organisations that are considered ethical are also considered more trustworthy77
.
Finally, research shows that consumers are more likely to be influenced by employee advocates of
an organisation’s brand than PR. Employees are seen as particularly credible advocates of a
company’s contribution to society and the environment and as many as 74% of the public say they
would believe the word of an employee over that of a company advert78
.
Ultimately, this is about creating and nurturing a credible and inspirational belief system – ‘why’
does the business exist?79
Classic marketing techniques are the cornerstone for developing such a
belief system and expressing it internally and externally, which places marketers right at the heart of
this vital strategic work.
68
Lacy, P., Cooper, T., Hayward, R. & Neuberger, L., 2010, A new era of sustainability: UN Global Compact-
Accenture CEO Study 2010
69
Porter, M. & Kramer, M., 2011, Creating shared value, Harvard Business Review, Vol. 89
70
Kapelke, C., Fall 2013, ‘Change or die: Focusing marketing strategy, structure and capabailities for 21
st
century growth, ANA Magazine
71
The Marketing Society with Accenture, The Future of Marketing
72
Miller, J. & Muir, D, ‘Brands in the boardroom’, The Business of Brands
73
Kapelke, C., Winter 2013, ‘The big ideal: How brands benefit from having a purpose’, ANA Magazine
74
Ramrayka, L., 2006, ‘The rise of the ethical consumer’, Guardian
75
Doebele, J., 2005, The importance of corporate responsibility, Economist Intelligence Unit
76
CIPD, 2008, Gen Up
77
Institute of Leadership and Management & Management Today, 2011, Index of leadership trust 2011
78
Ipsos MI, 2008, Engaging employees through corporate responsibility
79
Sinek, S., How Great Leaders Inspire Action

Sky has always been about innovation, giving customers new things, a better
choice and making Sky an essential part of people’s homes. This idea is what
differentiates Sky from its competitors: “We want to be at the heart of 21st
century living and to make every day extraordinary for every one of our
customers.” This is backed up by a brand promise: “We’ll achieve our ambition
by creating and acquiring the best entertainment and information, keeping our
customers at the forefront of entertainment and information technology, giving
our customers the best possible experience and by continuing to be inventive,
creative, entertaining and challenging.” To help make Sky staff understand how
it affects them in their day-to-day work, there’s a statement about
communication and behaviour. “We aim to be personal, clear, entertaining,
engaging and confident.” These statements help staff focus on what is most
important to the company and remind them of what is expected of them in
terms of behaviour. They are essential in making sure that customers get the
same experience from Sky whenever they come into contact with the company.
Leading an organisation of engaged employees
What is leadership? The theories and models of leadership have changed over time – and continue
to change with time, with context and with each theorist or subject-matter expert. There is no one
overarching theory or model of leadership. There is no one agreed definition of leadership. There is
also no agreed set of knowledge, skills and behaviours that leaders need to perform effectively.
However, there are a number of common threads or properties that most would agree represent
modern conceptualisations of what leadership is and what it involves80
.
 Leadership creates and addresses challenges and goals at the cultural level of an organisation.
 Leadership is key to the success of an organisation.
 Leadership involves influence over, and responsibility for, individuals (internal and external).
 Understanding and enhancing human behaviour is key.
 Leadership involves a continuous process.
 Leadership must be viewed within its context.
Different styles of leadership have emerged through recent research81
. The challenge in the UK is
that the prevailing culture and system are barriers to engagement. Outdated styles of leadership
and the system’s focus on short-term results are problematic. Some also believe that hierarchy
within organisations prevents honest conversations between employees and management82
.
Current leadership models, which value attributes such as control and toughness, are deficient.
Command and control models are flawed, as is the all-knowing, all-powerful ‘hero’ leader.
80
Leonard, S., Lewis, R., Freedman, A. & Passmore, J., The Wiley-Blackwell handbook of the psychology of
leadership, change and OD
81
Alimo-Metcalfe, B. & Alban-Metcalfe, J., 2008, Engaging leadership: creating organisations that maximise
the potential of their people
82
Ashridge Business School, Engagement through CEO eyes

In contrast, the leaders who encourage engagement amongst employees are more likely to help set
a clear vision rather than being a visionary. Research suggests that the relationship leadership style
is most effective83
, typified by the concept of the servant-leader. A servant-leader focuses primarily
on the growth and well-being of people and the communities to which they belong. While
traditional leadership generally involves the accumulation and exercise of power, servant-leadership
shares power, puts others’ needs first and helps people develop and perform as highly as possible84
.
As marketers look to step up and become the strategic business leaders of the future, implementing
the new model outlined above, they will need to become adept at the core competencies for
enhancing employee engagement85
.
Theme Competency Description
Supporting
employee growth
 Autonomy & empowerment
 Development
 Feedback, praise and recognition
 Trusts employee capabilities,
involving them in decision-making
 Helps employees in their career
development and progression
 Gives constructive feedback, offers
praise and rewards good work
Interpersonal
style and
integrity
 Individual interest
 Availability
 Personal manner
 Ethics
 Shows genuine care and concern
 Holds regular 121 meetings and is
available when needed
 Positive and leads by example
 Respects confidentiality and treats
employees fairly
Monitoring
direction
 Reviewing and guiding
 Clarifying expectation
 Managing time and resources
 Following processes and
procedures
 Offers help and advice, responding
effectively to requests for guidance
 Sets clear goals and objectives,
giving clear expectations
 Is aware of workload, arranges for
extra resources and redistributes
work as necessary
 Effectively understands, explains
and follows work processes
Marketers can learn how to become better leaders by working more closely with HR. Marketing
professionals appear to have lost influence in the board rooms of industry86
. A recent survey found
that only 12% of the chief executives of Britain’s top 100 companies had experience of marketing
and only 57% of larger companies had marketing represented on the board. There are practical
reasons for this linked to perceptions amongst CEOs that marketers operate adrift from the realities
of business87
, but marketers can also learn from HR how to become better leaders, to engage the
workforce more effectively and so to drive the engine of the new model outlined above.
83
CIPD, Perspectives on leadership in 2012 – implications for HR
84
Greenleaf, R.K., The servant as leader
85
Lewis, R., Donaldson-Feilder, E., Tharani, T. & Pangallo, A., 2011, Management competencies for enhancing
employee engagement
86
87
Fournaise Marketing Group, 2011, Global Marketing Effectiveness Program

Servant leadership has two specific areas that distinguish it from other
leadership styles. The first area is sustainability that produces lasting change
and may lead to the transformation of others. The second revolutionizes the
organization and empowers its people. The American Civil War provided a
platform for Abraham Lincoln to demonstrate servant leadership. Two of the
most lasting results of Lincoln’s servant leadership are the preservation of the
Union and the freeing of the slaves. Lincoln’s commitment to serve the greater
good for the most people both revolutionized and forever changed a nation for
the generations that have followed. Lincoln’s careful and prudent leadership
throughout his presidency produced a radical and transformational change in
America. Abraham Lincoln seized the opportunity before him to confirm
America’s position in the world as the premier example of a working
democracy. He also extended the opportunity for liberty to all Americans.
Communication and the engaged employee
Marketers spend the majority of their time concerned with creating demand amongst external
consumers and customers. Many do this very well but “relatively little exists to identify the
contribution advertising and other forms of consumer-oriented marketing make in assisting
employee engagement”88
. This is not its primary goal, but research by MEC MediaLab has shown
that advertising can have an impact across five dimensions, so marketers would do well to expand
their frame of reference to include internal resonance, when developing a balanced scorecard.
The first four dimensions relate to the individual employee’s responses. The fifth dimension relates
to the employee’s interaction with other people.
1. Advertising is a force – almost half (46%) of employees claimed to watch their employer's TV
advertising intensely – suggesting significant levels of 'lean forward' at home.
2. Advertising is helpful to some – a quarter of total respondents, but over a third (36%) of
customer-facing respondents, agreed that their company's advertising is helpful to the day job.
3. Advertising instils pride – seeing my employer's ads on TV is a source of pride for me.
4. Advertising boosts mood – whereas this dimension has the largest level of ambivalence, 40% of
respondents reported that they 'feel better' as a result of seeing their corporate advertising.
Almost nobody (2%) reports that they are left feeling worse.
5. Advertising is a part of the social glue of the organisation – outside work, over a quarter discuss
their employer's advertising with friends and over a third discuss it with family. The same is true
of customer-facing staff: more than a third discuss corporate advertising with customers, and
two-thirds of all respondents discuss it with colleagues. These conversations tend to be positive.
However, while external advertising can play a part in engaging the workforce, genuine engagement
will only come from a tailored employee communications plan, and six key themes underlie such a
plan89
.
88
Fletcher, D., February 2009, ‘Ads and the engaged employee’, Admap
89
CIPD, Harnessing the power of employee communication

1. It is a strategic approach that is built on a shared sense of purpose.
2. It requires attention and support from senior leadership.
3. It should be driven by genuine dialogue.
4. It should use a range of digital channels and tools.
5. It should be embedded as part of good people management.
6. It should be assessed for effectiveness and reviewed.
I have already spoken about the strategic importance of a shared sense of purpose and the
competencies that marketers will need to adopt in order to become more effective business leaders
in the future. Now, I want to spend some time addressing points 3 and 4, as they introduce us to the
concept of employee voice and invite a review of the impact of digital channels on employee
communication. I will explore points 5 and 6 later in this paper.
Employee voice is the two-way communication between employer and employee – this will sound
familiar to marketers and agencies, as ‘dialogue’ has become an accepted part of the lexicon, when
considering how to ‘engage’ consumers. It is the process of the employer communicating to the
employee, as well as receiving and listening to communication from the employee. The concept of
employee voice focuses on the opportunities for employees to be involved in decisions collectively
and has benefits for both employers and employees alike.
With a greater voice for employees:
 Their skills and knowledge can be better used, leading to higher productivity;
 They feel more valued, so they are more likely to stay and to contribute more;
 The organisation gains a positive reputation, making it easier to recruit good employees;
 Conflict is reduced and employers and employees cooperate based on interdependence.
Employees benefit from:
 Having more influence over their work;
 Higher job satisfaction;
 More opportunity to develop skills;
 More job security if their employer is more successful as a result of ‘voice initiatives’.
Emails (83%), intranets (75%) and face-to-face meetings (54%) are the dominant channels used most
frequently to engage employees and foster productivity90
, but, just as marketers and agencies are
falling over themselves to find a place for earned or shared media opportunities offered by social
media, so organisations are increasingly recognising that social media has the potential to “enhance
the ways in which employees work, learn, communicate and lead.”91
And, while sites such as
Glassdoor have very specific uses for giving employees voice and building employer brands, many
social media platforms have significant crossover use for both internal and external communications.
90
IABC Research Foundation & Buck Consultants, June 2010, Employee Engagement Survey
91
CIPD, Harnessing social media for organisational effectiveness

Figure 9 – Internal and
external social media
currently used92
There are six emerging patterns of collaboration under which organisations are using social media to
encourage employee voice – expertise location, collective intelligence, emergent organisational
structures, interest cultivation, mass co-ordination and relationship leverage93
. However, social
media is also being used in a variety of other areas too – career development, inductions94
, project
management and knowledge-sharing95
, agile working, reward and recognition96
, product
development and innovation97
plus learning and training98
.
And just as marketers often combine the idea of using social media with concepts such as ‘influence’
and ‘word of mouth’ in relation to external consumers, so too can they think of employees as brand
ambassadors and part of the overall communications mix themselves. Indeed, Tesco recently
identified that their workforce can connect them with two-thirds of the population.
The process of communicating with external customers and consumers or internal employees should
be the same. Value comes from recognising the existence of different segments, understanding
their needs, developing compelling propositions and selecting the most appropriate media to meet
the objectives. The rise of digital media has created many crossover opportunities that can be
leveraged by marketers holistically. And it is worthwhile considering the following question: where
do marketing campaigns start and where does service delivery stop these days?99
It sounds obvious,
but I believe marketers should take responsibility for all elements of the marketing mix, applying
their expertise in external customer acquisition and retention to internal employee communications.
92
93
Bradley, A. & McDonald, M., 2011, The social organisation: how to use social media to tap into the collective
genius of your customers and employers
94
Willyerd, K., 2012, Social tools can improve employee onboarding
95
Semple, E., 2011, ‘The evolving face of social media: tools of the trade for IC’, Strategic Communication
Management, Vol 15, No 5
96
Lupfer, E., 2011, ‘The social revolution of rewards and recognition’, The Social Workplace
97
Sambhi, H., 2012, ‘Diversity and social media: employers can leverage power of communities through
crowdsourcing’, Canadian HR Reporter
98
Zielinski, D., 2012, ‘Group learning: use social media to engage employees in knowledge sharing’, HR
Magazine, Vol 57, No 5
99
Hawtin, L., 2013, ‘Insights from the IPA Effectiveness Awards 2012: the employee works – from audience and
message to brand medium, mentor and maker’, Advertising Works 21

Sainsbury’s changed profoundly during the Justin King era. How brought with
him a shift in leadership and relationships between colleagues and the top of the
organisation. Tell Justin was a channel created after 2004 and was “a symbolic
way of doing things”. Through voice and different internal channels – such as
awards and the in-house magazine – he enabled direct and regular contact with
colleagues. Through regular attendance at the National Colleague Council plus
the Start the Day breakfast groups, he was able to hear the issues that mattered
to colleagues and engage them in improving the business.
Managing talent to drive engagement
Talent management is the systematic attraction, identification, development, engagement,
retention and deployment of those individuals who are of particular value to an organisation, either
in view of their ‘high potential’ for the future or because they are fulfilling critical roles.
During the late 1990s, McKinsey coined the phrase the ‘war for talent’ as part of its research
identifying talent management as a critical business challenge100
(marketers might use the same
concept when thinking about attracting customers). The concept of talent management has evolved
in recent years into a common and essential management practice and what was once solely
associated with recruitment now covers areas including organisational capability, individual
development, performance enhancement, workforce planning and succession planning101
.
Talent management should give organisations competitive advantage, when aligned to business
strategy and brand purpose. It can also contribute to other strategic objectives – building a high
performance workplace, encouraging a learning organisation, adding value to the ‘employer of
choice’ and branding agenda and contributing to diversity management.
PwC asked more than 1,000 CEOs “how important are the following sources of competitive
advantage in sustaining your growth over the long term?” The top response (97%) was “access to
and retention of key talent”102
. Top performers drive business performance and, as “marketing is
the root source of shareholder value”103
, talent management should be a top priority for marketers.
Unilever is one of the world’s largest FMCG. To transform itself into a more agile,
competitive, and winning organization, part of Unilever’s strategy is to instill a
stronger culture of performance and a stronger link between performance and
reward in its workforce. They worked with Buck Consultants to develop and
deliver a personalized online total reward statement (TRS) to its worldwide
management population via an employee portal. The intended initial audience
was 12,000 managers across 96 of the 110 countries in which Unilever operates.
Unilever’s benefits and related programs are a combination of global standards
and local market-driven programs, resulting in varying levels of benefits and
rewards across management in different countries.
100
Chambers, E.G. et al, 1998, ‘The war for talent’, McKinsey Quarterly
101
McCartney, C. & Garrow, V., 2006, The talent management journey
102
PwC, 2009, 12
th
Annual Global CEO Survey
103

Measuring employee engagement and aligning with wider brand and business metrics
Organisations sit on a great deal of data generated from a variety of different sources. Employee
surveys measure employee engagement. Brand tracking studies measure consumer awareness,
perception and attitudes. Sales data reveals the hard business performance.
The importance of an engaged workforce dictates that organisations establish robust surveys, but
this will not be enough. Alignment will be critical between internal and external surveys. Do
employees share the same sentiment about the brand as external consumers? If so, great. If not,
why not? And then each of these data sets will need to be correlated with business performance via
bespoke analytics. The theoretical model is great; but, as the drivers of engagement are acted upon
and initiatives put in place, organisations will need to monitor actual, live performance.
CAT’s challenge to Kenexa was to identify and understand the relationship
between employee engagement and performance as it related to six key
business metrics. Kenexa implemented a correlation study of employee
engagement levels and business outcomes during a two-year period in five U.S.-
based CAT dealerships, which encompassed 57 branch stores. CAT created focus
groups to understand and learn from top-performing branches: high-performing
stores met or exceeded quarterly financial targets 40 percent more often;
customer loyalty was 5.3% higher in top performing branch stores; top-
performing stores had significantly lower voluntary turnover rates, higher
technician productivity and lower costs of technician related rework.
Conclusion
The concept of supply and demand is the backbone of a free market economy like ours in the UK.
While our economy appears to be healthy by measures of GDP and consumer confidence, this belies
the fact that we have a supply-side problem with productivity. The solution is to address the
engagement deficit that exists in UK businesses and I believe that marketers are best placed to do
so.
The challenge is that marketing professionals have traditionally concerned themselves with external
demand-side growth from customers and consumers rather than internal supply-side performance
from employees. This has to change and the changes will be far-reaching.
 Organisation – establish a new business model
 Operation – develop innovative new relationships with HR
 Brand – prioritise purpose and nurture an inspirational belief system
 Communications – embrace the new model of employees-first
 Leadership – adopt a servant leadership style to drive engagement through the organisation
If marketers can embrace this brave new world, they will not only help themselves in their quests to
become the business leaders of tomorrow; they will also improve their organisations’ performance
and contribute to the wider health of the UK economy.

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