How focuses on Employee Engagement

This is not a promotional post about, but rather about how the company focuses on being an employer of choice. As I have continued to consult with a number of organizations representing a variety of industries, the topic of employee engagement is rapidly moving from being perceived as a soft topic, to a key business metric that has direct financial implications. Here is the article from the New York Times:

You can’t accuse of timidity.

The start-up is making an audacious bet to establish itself as a major force in the $350 billion United States e-commerce market. To succeed, Jet must offer good selection, low prices and fast delivery — all the things online buyers demand yet few retailers can provide. The graveyard of e-commerce hopefuls is crowded. If Jet stumbles it will end up like the flash-sales site Fab, which burned through $325 million before being sold for less than a tenth of that early this year.

Jet has had some bumps and turns since last summer, when it began selling products as varied as cans of chili, exercise bikes and WowWee personal robots. It changed its business model, dropping a membership fee. It is burning through cash as it continues to scale up, now with more than 900 employees. When it went out to raise more money in the fall, it encountered skepticism. A week before Christmas, it told some customers they would not get their orders in time. Jet said only about 500 shipments out of a million were affected, but such admissions never look good.


Workers at Jet’s warehouse. On an internal survey, one anonymous warehouse employee wrote, “I can finally wake up & not say in my head ‘ughhh another work day.’” 

CreditCole Wilson for The New York Times 

Yet Marc Lore, Jet’s founder and chief executive, says he is not worried. What will separate Jet from Fab and every other failed company, he says, is happiness. In particular, employee happiness.

“I’m constantly asking people at Jet if they’re happy,” he said. “It’s really important for me to know that they love working here and think this is the best place they’ve ever worked.”

Jet supplies its employees with typical start-up perks like free food (weekly lunches, plus Red Bull in the refrigerator and protein powder in the kitchen cabinet), four months of paid parental leave, unlimited vacation and an ownership stake that could one day be worth a lot. But it also has some decidedly less common policies, like standardized, no-negotiation pay packages and worker-friendly employment agreements. Employees can see, every day, how the business is doing.

“Transparency” is a big word with Mr. Lore. So is “fairness.” Make people feel good, he says, and they will do their best. Trust them and they will reward you.

Other executives have the same idea, even if they do not quite express it in those terms. As the start-up scene moves from hot to lukewarm, there is a dawning sense that new companies need to think about the long term even as they are still struggling to establish themselves.

“Many Silicon Valley companies are built on a culture of momentum, which can mask a lot of troubles,” said Michael Fertik, founder of, a reputation management company that started in 2006. “Then, when the momentum slows, the company is much larger, and the original mission, the original culture, has been diluted. Employees are no longer sure they are working for a place that works for them.”

The solution championed by Mr. Fertik and others is creating “a durable culture.” That task often falls to someone called the chief people officer, usually working directly with the chief executive.

The tools of the chief people officer are not necessarily better benefits or even raises. “We don’t simply want to console people with money,” explained Deena Gianoncelli, Jet’s chief people officer.

Money still drives the culture, however. And there has never been more money at stake than now. The number of unicorns — start-ups that are worth more than a billion dollars, a list that includes Jet — has more than tripled in the last two years, according to CB Insights, a research company. Converting these hundreds of billions in paper wealth into something of permanent value is a task, some argue, that will demand everything the employees can give, and perhaps more.

“Leading a start-up is a brutal pursuit,” Jason Calacanis, an entrepreneur and investor, wrote recently on his blog. “Most days are a death march in which you work horrific hours under massive duress waiting for your chance … to join the 80% of start-ups that die off.

Dustin Moskovitz, a co-founder of Facebook and now chief executive of a start-up called Asana, says that attitude is counterproductive. He says he would have been a more effective leader at Facebook if he had gotten more rest and taken better care of himself.

“It is with deep sadness that I observe the current culture of intensity in the tech industry,” Mr. Moskovitz wrote on Medium. “My intellectual conclusion is that these companies are both destroying the personal lives of their employees and getting nothing in return.”

Content Equals Committed

As the holiday shopping season was beginning in late November, Mr. Lore convened his top executives in Jet’s Hoboken, N.J., headquarters for their regular weekly meeting. Here are some of the things that were not on the agenda: warehouse logistics, customer concerns, fine-tuning prices, potential shipping bottlenecks, supplier issues or any of a dozen other topics that could have bedeviled Jet’s first December.

Instead, the executives discussed the mood and well-being of Jet’s employees.

The preliminary results of Jet’s first “Happiness Pulse” were in. More than 500 employees responded to the survey, which means basically everyone who had been at Jet for at least a month. Two-thirds of them said they viewed Jet favorably. Only 4 percent had a negative opinion.

“So only 25 people are basically unhappy,” Mr. Lore said.

“We have an opportunity to keep pushing these people into the ‘favorable’ bucket,” Ms. Gianoncelli said.

The executives chewed over the results in individual categories, which were presented by the survey company as scores: Jet got an 87 out of 100 as a company the employees would recommend as a great place to work, a 90 for letting people feel their work was important, and 87 for its managers. The results included not just the engineers and executives in Hoboken, but also packers in Jet’s three warehouses and the customer service people in Salt Lake City.

“These are not numbers you would expect out of an hourly work force,” said Nate Faust, the chief operating officer. Warehouse workers, who start at $13 an hour plus stock options, said things like this: “I can finally wake up & not say in my head ‘ughhh another work day.’”

The conversation briefly spun off into a discussion about the nature of happiness. Do people compare their happiness to an absolute, or is it relative? Can someone be somewhat dissatisfied and yet appreciate this might be as good as it is going to get?

“Insert appropriate joke about marriage here,” said Liza Landsman, the chief customer officer.

Beyond the scores, the survey generated about a thousand anonymous comments. They were generally favorable but included qualms and complaints, suggesting that pervasive workplace happiness was an elusive or perhaps impossible ideal.

“I feel empowered to make decisions. But my boss and 20 other people are empowered to overrule them,” one worker wrote. Another said, “I would recommend Jet as a great place to work … only to those who thrive in unstructured environments.”

A third worker, however, was enthusiastic: “Companies over the years have lost the management/employee connection to the point where base-level positions are extremely dispensable. With Jet however that does not seem to be the case.”

Jet’s worst overall score was for work-life balance. It got a 69, which was only one point above the survey company’s benchmark.

“You always get slammed on that,” Mr. Lore said, referring to the inherent contradiction of trying to do something worthwhile that is all-consuming while holding on to the rest of life. One employee caught some of this tension when he commented in his survey response that working at Jet has been the best 14 months of his career, but not the happiest.

Mr. Lore still hopes to achieve happiness for all. It is the right thing to do, he says. But it is also a business strategy

“Miserable workers will still clock in if the pay advantage of a company is sufficiently great,” said Andrew Oswald, an economist at the University of Warwick in Britain who has studied workplace happiness for decades. “However, there is growing evidence that there is a causal link between happiness at work and greater productivity at work.”

One recent study by Mr. Oswald and two colleagues concluded that worker happiness led to a 12 percent increase in output. “Happier workers use the time they have more effectively, increasing the pace at which they can work without sacrificing quality,” explained one of the researchers, Daniel Sgroi

By Jet’s logic, it has a chance to thrive in the long term only if it has the smartest and most motivated employees — and if it can prevent them from fleeing at the first sign of trouble.

One way Jet hopes to encourage employees to stay is to make it very easy for them to leave.

Tech companies can be jealous masters. They worry so much about losing employees, particularly the crucial software engineers, that a decade ago Apple made anti-poaching deals with several competitors. The companies agreed not to solicit one another’s workers, which was illegal. The resulting class-action lawsuit by the aggrieved employees was settled for $415 million.

Jet employees can quit today and go work for a competitor tomorrow and hire friends from Jet the day after. Jet has no clawback provision, in which signing bonuses or moving expenses must to be repaid if the worker quits before a certain date.

“Jet’s contract strongly signals that it has put thought into recruitment, retention and employee satisfaction, which in turn triggers motivation and performance,” said Orly Lobel, a professor of employment and labor law at the University of San Diego. “Even the more casual language used in some of the clauses, which is not typical for legal contracts, has the branding strategy of a good workplace that understands its human capital is the key to its success, and there has been thought put into how to convey that.”

And then there is transparency.

In an interview a few weeks after Jet’s official debut in July, Mr. Lore pulled out his phone and opened an app. It showed that Jet sold $667,200 in gross merchandise value in one day, up 89 percent in a month. Jet had 6,100 first-time buyers the previous day, and 7,800 orders. The company had $153 million in cash. The app is bulging with data, and it is available to investors and the salaried — but not the hourly — employees.

Some information is available even to casual visitors. Dominating one wall in the reception area in Hoboken is a board posting constant updates of the day’s sales by number and dollar volume. For technology companies, this is radical openness.

“The downside of transparency is that it invites people to sensationalize,” Mr. Lore said. “I’m sure we’ll get burned once in a while.” Jet’s warning to customers about the delayed holiday shipments might be a case in point. While the company said it was an industrywide problem, the news quickly rocketed around the Internet. (Jet said Wednesday that the majority of the 500 vulnerable shipments had been delivered.)

Also radical is a practice to keep salaries the same for jobs grouped together, a process called “leveling.” This is meant to rule out the common ploy “I got a job offer, can you match it?” Extroverts who promote themselves and introverts who keep their heads down are paid the same for jobs of the same value to the company.

That kind of transparency in salaries might not appeal to everyone — especially competitive types who are attracted to the risk and energy of a start-up. It is also unclear how practical it is in the long term. But Mr. Lore says it is crucial to fairness.

The Schedule Squeeze

Mr. Lore is 44, bald, soft-spoken. In 2005, he was a founder of the site, which became an e-commerce success. He sold the company, then called Quidsi, to Amazon in 2010 for $545 million, after a brutal price war. Amazon continues to run it as a separate e-commerce site. Mr. Lore left Quidsi in 2013 and began Jet the next year. More than two dozen Quidsi employees have followed him to Jet.

While Mr. Lore is bland in his references to Amazon, the e-commerce kingpin that Jet is trying to compete with, he openly criticizes Wall Street, where he once worked.

“I saw that it didn’t matter how you treated people, you just paid them enough so you didn’t care if you burned them out, and then you got new people and burned them out,” he said. “It was an environment of very short-term thinking.”

Merry workers are not exactly skipping through the halls in much of corporate America. Gallup regularly measures engagement, which it defines as people having the opportunity to do what they do best, their development being encouraged and their opinions counted. About one-third of workers are considered engaged, a level that has been stalled for some time.

And yet the demands increase. Seventeen percent of workers told Gallup this year that they worked 60 hours or more a week, nearly double the 9 percent who said so in 2005.

“The social norm at every company is to be available 24 by 7,” says Caralyn Cooley, Jet’s vice president for talent operations. “My willingness to accept that made me very successful.”

Ms. Cooley rose through the ranks at Honeywell, PepsiCo and then, as a mother of twins, Amazon, where she managed dozens of human resources specialists.

Then came her breaking point, she said. Her husband, a teacher, usually picked up the children from day care. A few times her sister did. And then one day Ms. Cooley fetched them, and the day care employee called out to them, “Your aunt is here!” Ms. Cooley had to correct her, “No, I’m their mother.” When she got to her car she cried.

“That’s when I realized I was giving too much,” said Ms. Cooley, 36. She rearranged her schedule, picked up her children more often, and then switched to a new job at Amazon. At Jet, she starts early and usually gets home in time for dinner.

Leading a Shift

Maybe, like most start-ups, Jet will fail, and the energy and money spent developing an employee-focused culture will have been pointless. The company has had doubters in the news media, but it says it is doing well, with two million customers and, in mid-December, its first $2.5 million revenue day. “We think they are going to be a winner in the cost-conscious consumables market,” said Gene Munster, senior research analyst at Piper Jaffray.

Whatever its fate, Jet is anticipating a different era.

A few years ago, a miserable employee had to suffer in silence. Now, thanks to Facebook, the employer-rating site Glassdoor and other social media sites, a company’s culture is increasingly on display.

The view is often dismal: Deloitte Consulting said in its annual survey of workplace trends that half of workers would not recommend their employer.

All of this, in turn, leads to high turnover that hurts the bottom line. Some analysts now think that might be changing as the recession moves further into the past and hiring becomes more competitive.

“Eighteen months ago, we started to see a shift, where companies were focusing less on pure productivity and lean operations,” said Stacia Garr, a vice president at Deloitte. “They know the economy is improving, that employees have more options, and are devising strategies to engage and retain them.”

As Ms. Gianoncelli and Ms. Cooley try to create a durable culture for what may or may not be a durable company, sometimes the more important factor is not whether employees will stay, but whether they should be hired in the first place. Jet is hiring 50 people a week.

An analytics applicant came into Jet for an interview. In some ways he was a model candidate, smart and driven. But he did not score high in the “plays well with others” category. Asked to talk about a recent project in which he was a member of a team, he could not think of any. His prospects immediately diminished to zero.

“He could have fit in somewhere else,” Ms. Cooley said. But he was not for Jet.


The Nordstrom Way through my eyes…

I have for years known about The Nordstrom Way to Customer Service Excellence. There are many books available on how to implement this level of customer service into any organization. Here is an example of one of many. In a recent book titled “The Two Factor Theory of Customer Service” written by Dr. David Elwood – the founder and Chairman of Elwood Staffing, he describes a never to be forgotten experience at Nordstrom.

Albeit I have heard about it, I confess that I have never read any of the books that describe the methodology, or personally experienced it to the degree that I was able to a few days ago. In an effort to tell the Nordstrom folks about my outstanding experience, I was looking forward to completing a survey by going to a link listed on my receipt. Alas, because I didn’t make a purchase, but simply an exchange, I wasn’t able to reach the survey link. Since I wasn’t able to tell the Customer Service team about my experience via a survey, I am using my blog to share what I consider to be the best customer service experience that I have ever had.

Shoes & pain

During a recent trip to Mykonos – one of the many beautiful Greek islands – I purchased two pairs of shoes that I thought were quite sleek made by Swims, a Norwegian brand that I had never heard of before. You can see the cool products that they make here. One of the two pairs was worn on my long flight back home to Indiana. Well, very quickly on my way back I realized that I had purchased a size way too small for my chunky feet. The 24-hour journey back home was one painful experience.

Now, what?

On my way back I did some research on the brand and realized that Nordstrom carried them in Indiana. I looked for my receipt to no avail, and in spite of that, and being a bit familiar with “The Nordstrom Way” I decided to take them to the store with the wild idea that they would somehow lend me a hand. I wasn’t expecting absolutely anything as I:

  • had purchased the shoes thousands of miles away
  • didn’t have a receipt
  • had actually worn one of the two pairs for over 24 hours
  • the store from where I had purchased them was a small shop with no affiliation whatsoever to Nordstrom

Shocking experience

When I walked into the shoe department of the local Nordstrom, I approached a representative named Kyle. My dialogue with him is a critical piece of this blog entry:

Fernando: Hi, There, what is your name?

Kyle: Kyle

Fernando: Hi. Kyle. I have a big favor to ask. I am a big fan of the company, I have been a customer of yours, and admire the way in which you provide customer service. I know that this is a big shot, but I decided to give it a try. I bought these two pairs of shoes last week while traveling to Greece. I love them, but they are killing my feet. Would it be humanly plausible for you to help me out since you carry them in the store? Here is the issue though: I don’t have a receipt, and I have worn a pair for a few hours.

Kyle: I think that we can certainly help, but let me chat with my sup.

Fernando: Thanks, Kyle.

Kyle (after 2 mins): We can absolutely help. Would you like store credit, or do you want to try to find a bigger size of the same shoes?

Fernando (in shocked): I think I will do store credit as you guys don’t have the same color of the ones I purchased.


And after a few mins, I had a card loaded with the amount that I had paid for my shoes thousands of miles away – no hassle, no questions asked, no receipt, nothing…This has been without a doubt the best customer experience that I have ever had. As a customer service passionate advocate and practitioner, I felt that it was my duty to share about my experience with Nordstrom and anyone else who somehow comes across this blog. My hope is that someone at Nordstrom reads this post, and manages to share it with Kyle, and perhaps others in the organization. Your devotion to customer service is undoubtedly the reason for your success. I dream of the day when many other companies strive to be just like you. You have gained a loyal customer for life.



Inspiration through the stories that I hear…

In my constant interactions with people in different parts of the country, I very often come across stories that give me such a sense of appreciation for everything that I have – not the material things that I may or may not posses, but the life experiences that in one way or another have shaped me into who I am today. Recently, I became fascinated by someone whom I will call Mary. Her story moved me, her dedication inspired me, and her energy caused me to admire her. This is what she has to juggle:

Mary works 3rd shift, which means that her schedule starts at 10pm Sundays and ends at 6:30am on Mondays. There are times when she has to work overtime, extending her workweek to 7 days a week. This is where it gets fascinating:

– She also has 2 children under the age of 5
– She is also a single Mom
– She also is a Full-Time Student

After hearing this I asked her to elaborate on what a typical week looked like – it was then when she really inspired me. She shared that she arrives home from work (after an 8-hr night shift) at around 7am every day to get her kids ready for school. Once they are on the bus, she gets ready for her own school as her classes commence at 9am and end at 3:30pm. She gets home on time at around 4pm to see her kids get off the bus. The evening is then consumed by homework – that of the kids’ as well as hers – dinner, and a bedtime story as her 2 children fall asleep. It is then when she is able to sleep 2 – 3 hours before she has to go back to work at 10pm to start her routine again. Inspired yet?

Had she not told me her story, I would have never guessed that she slept for 2 hrs. Not for a second did she look tired, unhappy, or bored. Quite the contrary, she mentioned a number of times how much she loved her job, how grateful she was about being able to attend school so that one day she could become the RN that she is striving to become, which will give her a chance to have a better balance between her responsibilities and her family. When I asked her why she loved her job so much when it was a loud factory where men were predominantly the majority, she indicated that her management team makes a constant effort to recognize her work, which makes her feel valued and appreciated. Before I left her area, her supervisor indicated that Mary is the best employee on her team maintaining a perfect attendance record in the past 2 months.

Are you taking the time to recognize your teams? Someone much wiser than me once said that “recognition is the deepest craving of human nature” – a statement that I find full of truth.

The Antidote to Turnover = Employee Engagement

Is there any substantial evidence that shows a relationship between employee engagement and turnover rates? See, in the world in which I live, turnover is a very hot topic, and if you are a business leader reading this post, it should be a hot topic on your list of priorities as well. Curious yet? After having had opportunity to chat with almost 4,000 employees and hundreds of senior business leaders, I have arrived at the conclusion that this is a topic that deserves as much, or arguably, more attention than your income statement. Without an engaged workforce, the responsibility that you have to your shareholders may not be met.

In the past 2 years, I’ve worked for one of the largest temporary agencies in the country, leading a department that focuses exclusively on systematically measuring the engagement levels of our temporary employees placed at some of our key accounts located all over the country. Our mission has been to not only listen to these folks, but to develop feasible and executable action items that will show them that their feedback matters. Using a consultative approach, it is my goal to persuade clients to implement adjustments to their environments that, based upon the feedback collected, should result in higher engagement levels, resulting in lower turnover rates. Is every client willing to make these changes? No. The consequences, though, of listening to your teams and failing to follow through with changes can understandably lead to a decrease in morale levels and an increase in turnover rates. Your most important assets will feel that their opinions don’t really matter.


Happiness Makes Your Brain Work Better

by Jessica Stillman from INC Magazine

A Harvard psychology researcher explains that rather than thinking of success as the source of happiness, we should think of happiness as a source of success–and one that’s more under out control than we imagine.

Entrepreneurs, in general, are strivers. We set targets, battle to meet them, and believe that getting to that point, whatever it is, will bring us increased satisfaction. But according to one positive psychology researcher out of Harvard, as commonsensical as this tendency to chase achievement in order to attain greater happiness may sound, it’s actually got the equation reversed.

In a fascinating (and funny) TEDxBloomington talk, Shawn Achor, author of The Happiness Advantage, argues that while we may think success will bring us happiness, the lab-validated truth is that happiness brings us more success. And understanding this is particularly valuable for entrepreneurs, Achor said in an interview. Business owners, he said, need to,

Reverse the happiness and success formula. We think if we work harder and achieve some entrepreneurial goal, then we’ll be happier. But the research is clear that every time you have a success, your brain changes what success means. So for you and for your team, if happiness is on the opposite side of success, you’ll never get there. But if you increase your levels of happiness in the midst of a challenge—in the midst of searching for investment, in the midst of a down economy—what we find is that all of your success rates rise dramatically – every business outcomes improves.

The brain, it turns out, works significantly better when you’re feeling positive, so developing a sunny outlook allows you to be smarter and more creative. “We found that optimism is the greatest predictor of entrepreneurial success because it allows your brain to perceive more possibilities,” said Achor. “Only 25 percent of job success is based upon IQ. Seventy-five percent is about how your brain believes your behavior matters, connects to other people, and manages stress.”

If you’re all set to argue that your level of optimism or ability to handle stress is out of your control and determined by either your genes or your childhood, requiring a Woody Allen-level commitment to psychiatric intervention to reverse, Achor would like to correct you. “It’s a cultural myth that we cannot change our happiness,” he said, explaining that:

Genes are really important to happiness, but that’s based upon the cult of the average. What that means is that the average person doesn’t fight their genes. So if you’re born with genes for obesity or for pessimism, and you don’t change your behavior than your genes win. Happiness comes easier to some people, but happiness is a possibility for all if we change our behavior or our mindset.

And changing your mindset is probably less difficult than you imagine. “No one would think that something small could change patterns of pessimism from decades or from genes,” conceded Achor, but he said research proves the doubters wrong. “What we found was something as simple as writing down three things you’re grateful for every day for 21 days in a row significantly increases your level of optimism and it holds for the next six months. The research is amazing. It proves we actually can change.”

So if you’re looking for more ways to boost your personal happiness quotient, than check out Achor’s TED talk below for some simple interventions that have been proven to help (they’re towards the end). Or if you’re more focused on helping your team perform better by being happier, check out Achor’s recent Harvard Business Review Magazine cover story, explaining, as Achor put it, that “happiness leads to greater levels of profits. In the article I described some things you can do at a team organizational level” to promote it. Check out this 12-minute video:


Dad’s wisdom…

“Hijo – Haga ejercicio” is perhaps one of those sentences that my Dad repeated over and over when I was growing up, one that carries so much meaning and truth that alas, I was not able to comprehend fully when I was younger. It translates for “Son – exercise.” See, you have to know a little bit about my Dad in order to better comprehend his constant desire to instill in us the benefits that a regular exercise routine brings to your soul, your body, and your overall persona.

As I post this blog, I am not sure how old my Dad is – he has kept it a secret and has always stated that he does not really remember when he was born. Let’s assume that he is 81, which is what we at home estimate. At his current age, my old man walks on average 15 hours per week and swims at least 3 times per week – when he does, people stare at him in awe watching this older fellow swim non-stop for more than 2 hours. I admire him for many reasons, but his passion for leaving a healthy life through the power of exercising is perhaps one of the reasons why I admire him the most.

A few years ago it all started clicking, my Dad was right. All of those years growing up when I did not pay much attention to his constant reminder that I needed to exercise more paid off when I consciously started seeing the benefits of having a regular routine. Sadly, the benefits are not related to having Beckham’s body, but even better, they are those of feeling ALIVE, energized, grateful, and joyful. Today, I just was not able to wake up on time to go to the gym due to a lack of sleep caused by my friend “Oscar. The result – perhaps psychological – was that of feeling tired, stuffed from the not-so-healthy food that I had this weekend, and unable to sharply think on my feet. Interested in being reminded about some additional benefits? Go to this site and check out 7 on your own.

I will be sure to wake up tomorrow early enough to go to the gym and one more time remember how accurate my old man’s wisdom was and continues to be.