Happy and engaged employees deliver great experiences to customers, and happy customers drive great business outcomes. I learned that from Jim Heskett, co-author of The Service Profit Chain and one of my favorite professors at Harvard Business School. Fast-forward fifteen years, and this same, timeless idea is at the heart of our partnership with Workday.
First, some background. Since Medallia’s founding in 2001, we’ve been honored to work with leading brands like Hilton, Delta, Four Seasons, and IBM to help them deliver great experiences to their customers. From the beginning, it was clear there was a strong link between customer experience and employee experience, which is why Medallia was the first to invest in key capabilities, such as hierarchy management, to ensure all employees in an organization—not just a small group at headquarters—could access and act on customer feedback.
This insight and innovation allowed us to link customer experience data to the natural desire employees have to treat customers well. At leading companies, delivering great experiences to customers isn’t something employees are mandated to do. Rather, employees naturally want to do the right thing for customers. The Medallia Experience Cloud allows them to do that by helping them understand whether they are delivering great experiences and allowing all employees to take action directly, quickly, and effectively when the experience is subpar.
Over the past few years, this link between employees and customers has become even clearer as our employee experience offerings have been adopted by leading organizations like ABN AMRO, ADP, Petco, Rent-A-Center, Sam’s Club, Sprint, and Vanguard, to name a few. Leading companies want to understand the experience they are delivering to employees because they understand that employee engagement drives improved customer experience and, ultimately, improved business outcomes.
While the link between employee experience, customer experience, and business outcomes, may be obvious and intuitive, a wealth of research supports the link. Fred Reichheld’s foundational book on the Net Promoter Score (NPS), The Ultimate Question 2.0, details much of it. A key insight often missed in discussions about NPS is that it’s not only clear that NPS ties to business outcomes. Rather, the methodology itself—the specific question, the scale, and the definition of promoters, detractors, and passives—was derived by asking what question predicts business outcomes. Reichheld describes in the book how after an exhaustive multi-year process gathering and analyzing data across thousands of customers, they were surprised to learn that one question strongly predicted business outcomes in most industries. Thus, NPS was born, tying the customer’s experience with a company to powerful business outcomes.
Separately, James Heskett, W. Earl Sasser, Jr., and Leonard A. Schlessinger asked and answered a related question in their book, The Service Profit Chain: Why do some service organizations succeed year after year in delivering great outcomes for their customers and their businesses? They, too, gathered and analyzed significant data across a multi-year process to answer the question. The results were summarized in the book and an article in the Harvard Business Review, “Putting the Service Profit Chain to Work,” where the authors outlined the link between employees, customers, and outcomes as follows:
In short, the employee experience drives the customer experience, which in turn drives business outcomes, a relationship we’ve repeatedly seen and quantified with a number of our customers. (Notably, great customer and business outcomes improve the employee experience, creating a powerful feedback loop.)
This link became even clearer to me when Jason Pointelin at Sprint, a Medallia customer of both our customer experience and employee experience offerings, explained to me the importance of tying the rich experience data they were receiving from their customers and employees to their HR system of record. Jason said, “For experience management to have fundamental impact in an organization, the data has to be tied to the HR system of record.”
Ultimately, it was clear we could deliver more value to customers by partnering with Workday, a leading provider of finance and Human Capital and Financial Management cloud applications, allowing our customers to easily and seamlessly link their experience data into their systems of record to extract key insights and take actions that would improve their business outcomes.
A partnership with Workday was the natural next step for a number of reasons. One, many of our mutual customers have chosen both Medallia and Workday. Two, Workday delivers financial management, human capital management, planning, and analytics applications, allowing customers to see the full picture of their business. Three, one of Workday’s core values —“to put people at the center of enterprise software”— clearly aligns with Medallia’s values.
We formalized our partnership with Workday in August 2019 as an Access partner in Workday’s Software Partner Program. We’re now hard at work on our integration with Workday’s Prism Analytics product team, which we will be showcasing at the Prism Analytics product deep dive session at Workday Rising.
Join us at Workday Rising and visit us at Booth 306 to learn more and spend time with our experts.