Episode Summary: Ep. 489 - Want a Thriving Company Culture? It All Starts with Just ONE Powerful Question

In Episode 489 of "Second in Command: The Chief Behind the Chief with Cameron Herold", host Cameron Herold engages in a profound discussion with guest Randy about the pivotal role of the Employee Net Promoter Score (eNPS) in fostering a thriving company culture. This episode delves into the nuances of correctly calculating eNPS, its significance compared to traditional metrics, and actionable strategies for implementation that can transform workplace dynamics and drive business success.

1. The Pitfalls of Misinterpreting NPS

Randy kicks off the conversation by addressing a common misconception surrounding the Net Promoter Score (NPS). Many organizations mistakenly rely on average ratings, which can obscure the true sentiment of their employees.

• Randy [00:53]: "A lot of people think they're doing an NPS and what they end up with is an average rating. An average actually can look much stronger than what the NPS will come out."

He elaborates on how averaging scores can misrepresent employee satisfaction, leading to a falsely optimistic view of the company's culture.

2. Accurate Calculation of eNPS

Understanding the correct method to calculate eNPS is crucial. Randy provides a clear example to illustrate the difference between average ratings and actual NPS.

• Randy [01:02]: "That would come out with an average rating of an 8. 8 out of 10 sounds pretty good, right? On the Net Promoter score, you would take 50% of the respondents are a 9 or a 10. Subtracting 50% of the respondents that are a 1 through 6, it would give you a net promoter score of zero."

This example underscores how an average score of 8 can misleadingly suggest strong employee satisfaction, whereas the NPS reveals a balanced sentiment, highlighting areas for improvement.

3. Implementing eNPS: Tools and Best Practices

Randy shares practical advice on how companies, especially smaller ones, can effectively implement eNPS.

• Randy [03:15]: "On a scale of 1 to 10, how enthusiastically would you recommend this as a place to work?"

He recommends using straightforward tools like Survey Monkey or Google Forms to conduct confidential surveys. By asking focused questions, organizations can gather meaningful insights without overwhelming their employees.

Key Strategies:

• Biannual Surveys: Conducting surveys twice a year (e.g., January and July) helps maintain engagement without causing survey fatigue.
• Open-Ended Feedback: Including questions like, "What's one thing we can do that doesn't cost money to make this an even better company to work for?" encourages actionable feedback.
• Celebrating Feedback: Implementing suggested changes fosters a sense of ownership and satisfaction among employees.

4. Success Stories: From Good to Great

Randy highlights several companies that have leveraged eNPS to achieve remarkable success in their workplace culture.

• Glassdoor Rankings: "I coached a company that went on to become number two in the United States on Glassdoor... they were positive 96, positive 97, net promoter score when they asked their 100 employees, how enthusiastically would you recommend this as a place to work?" ([03:15])

These high eNPS scores correlate with exceptional rankings on platforms like Glassdoor, demonstrating the tangible benefits of prioritizing employee satisfaction.

5. Aligning eNPS with Business Metrics

The discussion emphasizes the hierarchical importance of metrics:

1. Employee Net Promoter Score (eNPS)
2. Customer Net Promoter Score (cNPS)
3. Profitability in Dollar Terms

Randy argues that a high eNPS lays the foundation for superior customer satisfaction and robust financial performance.

• Randy [05:00]: "The number one metric for me in every company is your employee net promoter score. Number two metric in every company is your customer net promoter score. The number three metric for me is profit in a dollar figure."

This hierarchy ensures that companies focus first on their internal culture, which naturally leads to better external outcomes.

6. Overcoming Challenges: Survey Fatigue and Negative Feedback

Maintaining high engagement in eNPS surveys is essential. Randy advises against frequent surveying to prevent fatigue, advocating for a balanced approach.

• Unknown Speaker [06:39]: "We get best place to work... we have a hundred employees... we're doing three best place to work things and then we're doing net promoter score."

Additionally, addressing negative feedback proactively by removing toxic elements within the workplace can significantly boost eNPS.

• Randy [12:26]: "The easiest way to get a really happy workplace is fire all the negative, toxic people. Just don't let them come anymore."

7. Leadership's Role in Enhancing eNPS

Effective leadership is pivotal in driving and sustaining high eNPS. Randy shares insights on how leaders can inspire their teams to exceed current standards.

• Randy [08:38]: "Imagine if you had a big wine rack like that in your head office... anytime any employee got an email or a phone call from a recruiter... they had a prize for getting poached because I'm not leaving."

Such initiatives not only reward loyalty but also reinforce a culture of appreciation and commitment.

8. Case Study: Tenuity's Transformation

Randy recounts his experience coaching Tenuity, a company that achieved a positive eNPS of 93 and improved its profitability by strategically adjusting its cultural initiatives.

• Randy [10:10]: "The company that went on to rank number two in the United States on Glassdoor is now called Tenuity... we decided to start cutting some of the things that were making the employees happy. And they were really nervous."

This bold move demonstrated that maintaining a high eNPS while optimizing profitability is feasible, leading to sustained business growth and employee satisfaction.

9. Actionable Steps for Listeners

To conclude, Randy urges listeners to integrate eNPS into their core business strategies:

1. Conduct Regular eNPS Surveys: Utilize simple tools to gather honest feedback.
2. Act on Feedback: Implement cost-effective changes based on employee suggestions.
3. Celebrate Successes: Recognize and reward employee loyalty and exceptional performance.
4. Align Metrics: Prioritize eNPS to drive customer satisfaction and profitability.

By following these steps, organizations can create a workplace environment where employees are genuinely enthusiastic about their roles, leading to a thriving company culture.

Notable Quotes

• Randy [00:53]: "A lot of people think they're doing an NPS and what they end up with is an average rating. An average actually can look much stronger than what the NPS will come out."

• Randy [03:15]: "On a scale of 1 to 10, how enthusiastically would you recommend this as a place to work?"

• Randy [05:00]: "The number one metric for me in every company is your employee net promoter score. Number two metric in every company is your customer net promoter score. The number three metric for me is profit in a dollar figure."

• Randy [12:26]: "The easiest way to get a really happy workplace is fire all the negative, toxic people. Just don't let them come anymore."

Final Thoughts

This episode underscores the transformative power of Employee Net Promoter Score in building a robust and thriving company culture. By accurately measuring and proactively enhancing employee satisfaction, organizations can unlock higher productivity, better customer relationships, and sustained profitability. Randy's insights, backed by real-world examples, provide a clear roadmap for leaders aiming to elevate their workplaces to new heights.

For more insights and strategies from top COOs, visit COOAlliance.com.