To engage your employees, look outside the company

We are all preparing for a recession, and we know that employee engagement is an even stronger predictor of financial performance in a recession than in normal times. Companies in the 99th percentile of engagement have nearly five times the success rate of those in the bottom percentile during an economic downturn. So it's only fitting that we're obsessed with employee engagement, and especially now.

But our approach to employee engagement is wrong. And we know that because it doesn't work. The percentage of engaged employees (around 33%) has not increased by more than a few points for decades. And companies lose up to $605 billion each year to churn.

The current solution to the problem looks a bit like this: we try to involve the employee in the idea of ​​the business instead of involving him in his goal of profitability: the customer. We promote positivity with team building activities, ephemeral perks, and vacation bonuses, but don't really treat employees as business partners. We are crazy about corporate culture, but we try to build it from within. The problem is that the purpose of our businesses does not only reside within.

At AFC Urgent Care Portland, serving out is a natural fit. And Managing Partner Guru Sankar understands that healthcare can be profitable - if you make your employees partners in serving your patients profitably.

A few years ago, the clinic's financial results were inconsistent (with a few poor years), transparency and understanding were low, and apathy was widespread. Guru had tried many vaunted management principles, intentionally working to build corporate culture by offering bonus programs and soliciting customer feedback. But there was no cohesive philosophy to engage and bind the team in its goal. Their efforts seemed to pay off for a short time before regressing to a previous state of disconnection.

To unite employees, AFC Portland began adopting principles of Economic Engagement. Guru and the management team collected detailed feedback from employees on how to improve the business and discussed their ideas with them. The team then settled on a single metric that would determine if they “won” and began to focus all of their efforts on that. The winning metric (revenue per paid hour, or RPH) took root in both language and operations; weekly meetings were organized to forecast the RPH, and possibly other parameters of success. Before long, most team members understood business conventions and knew how to drive results.

When Guru and the management team realized that progress was slowing down, they identified a lack of foresight on the part of some of the team, particularly the doctors. Not everyone was equally engaged. Using a slow and deliberate hiring approach, he recruited the right leading physician to model economic engagement for others. The group began using the NPS to regularly and systematically survey their patients, seeking to understand why a patient would or would not recommend a friend or family member to the clinic. Valuable feedback was carefully documented and communicated to the team. As forecasting and customer engagement improved, results also increased. With better results came an improved incentive program, where employees could share in the profits they had helped grow.

The focus on patients has proven to translate into excellent financial performance. The re-engagement of the team of physicians resulted in a significant change in earnings. And after three years of economic engagement, EBITDA has increased sevenfold. There is no doubt that the emergence of Covid-19 was a notable driver of these results, but at the height of the pandemic, the number of grass...