For those that have the privilege, there's never been an easier time to be a company executive. Anyone who has been following the global macroeconomic situation for the last few years (i.e. pretty much all of you) may disagree with that statement, but from the perspective of the actual "science" of management, I firmly believe this to be the case.
Technology, management studies, financial analysis, research and "big data" have all contributed to an environment today where just about every aspect of performance can be measured to the nth squared degree. Within Customer Service, for example, which is just one of 8 core functions in our business, our managers must deliver a green scorecard across over fifty metrics, ranging from the time it takes a call center employee to pick up an incoming call to the percentage of shipment tracking enquiries responded to within 24 hours. Green scorecards are critically important for the top management of a business such as ours, employing over 100 000 people in over 220 countries and territories worldwide, because we can only measure quantitative performance on a real-time basis, while qualitative management is entrusted to our managers and supervisors on the ground.
However, despite the multitude of metrics available at the click of a button (or the tap of a finger), and despite the enduring importance of 'delivering your numbers', I would like to make the case that the "art" of management has become more challenging, and more important, than ever before.
I will not be introducing any new insight by stating that reward always comes with risk, and while the aim of any commercial entity is to maximize the former while minimizing the latter, risk is still the only certainty. So, as long as companies pursue ever greater rewards in our wonderfully inefficient, random world, an element of uncertainty will always be there. And as technologies advance ever further and performance excellence becomes the new norm, managers will still have to pit themselves against more unknown, uncontrollable factors. Crucially, in order to generate a superior return, they will also have to deliver something extra and intangible on top of their green scorecards.
For our company, that "something" is engaged employees.
The whole essence of engagement is to drive outstanding customer service and loyalty, creating an "insanely customer-centric" organization. We introduced the Certified International Specialists (CIS) learning and development program in the US in July 2009, against the backdrop of over EUR 3.2 billion in losses for the DHL Express division over the preceding 3 years. It was rolled out globally from July 2010. CIS is not a traditional training platform. It was designed first and foremost as an engagement tool. To underscore its importance, it has been delivered not only by professional trainers, but principally by our own management, to every one of our 100 000 employees. The content of the program was focused on revisiting the history and entrepreneurial roots of the company, introducing employees to the fundamentals of international shipping and, perhaps most importantly, showcasing the role that every individual plays within our global network. Our business, like most others, is still operated and managed by human beings, and the benefits of multi-million dollar investments in transportation infrastructure and technology will be rendered meaningless if a courier who's delivering a shipment decides to take a bad day at home out on a customer. In the case of a courier who is enthused and passionate about the work they do, however, it goes without saying that the benefits will be amplified. Fully engaged employees are your best guarantee that everyone in your organization truly understands the importance of customers, as opposed to internal targets, to your business. This simple premise might seem obvious, but it is surprising to see how often it is overlooked.
As with any other business activity, we intensely measure the performance of CIS - employee engagement, measured through our annual Employee Opinion Survey, has increased by 9% from 2010 to 2012. Our customer net promoter score improved globally by 2 points per year over the same period. However, all told, this measurement means nothing, because I know that the impact for our business goes way beyond these numbers. The program has reformed and reshaped the culture of our company, empowered employees to be part of the growth story and helped them to develop skills that they can build further on within their own careers. Significantly, DHL Express delivered a record EBIT contribution of EUR 1.1 billion to Deutsche Post DHL's results in 2012. As CEO, I have no foolproof way of measuring and quantifying this, but I am confident that I can attribute a vast proportion of that figure to CIS.
Business is a combination of both science and art. As technology develops and the "science" offers even greater tools for management, companies will continue to deliver better results across all their metrics. But I would argue that many of these improvements will be subject to a diminishing marginal utility of returns, as more and more businesses are able to take advantage of them.
While "science" will continue to dictate appraisals of an executive's performance, it is the "art" of management that will drive the successful businesses of the future. And engagement, however you measure it, will define the very best.Suggest a correction