There are several ways to determine the well-being of a business: profitability, growth, stock price. But those metrics all indicate how healthy a company was in the recent past. Many senior executives use in-house efficiency -- how well and quickly a project moves from department to department before reaching completion -- to diagnose the general health of their companies.

The problem is that accurately diagnosing efficiency is very difficult. Leaders usually lead from 30,000 feet, and from that height, much of what's below is invisible. Most leaders are much too far away from daily operations to accurately assess interdepartmental behavior. Furthermore, that's not their job. Determining if IT is dragging its feet on a request from marketing is not what CEOs are paid to do.

But figuring out if the company is losing money, time, and psychological capital on poor internal customer service is part of a leader's job. That's because internal customer service affects profitability, shareholder value, and employee engagement.

Though business leaders shouldn't waste time determining if marketing has a legitimate complaint or if IT is just busy, they should make time to take the temperature of their companies. Stryker Corporation, one of the world's largest medical products and services companies, has made taking the company's temperature an integral part of its business performance metrics -- and company leaders are making good use of an effective thermometer to measure efficiency.

Ubiquitous logo

Stryker makes and sells trauma, spine, and micro implant systems; joints; orthobiologics; powered surgical instruments; surgical navigation systems; endoscopic products; and other forms of medical equipment. Indeed, it's a rare hospital that doesn't display the Stryker logo somewhere. Stryker's annual revenue is about $5 billion. The company has facilities around the world, and Stryker EMEA is the group in charge of sales in Europe, the Middle East, and Africa.

Like every organization, Stryker EMEA's departments aren't always in perfect accord. But the company's challenges are a bit more intense than those of most other businesses. The division has 1,800 employees in 21 countries who speak almost two dozen different languages. Stryker EMEA is headquartered in Montreux, Switzerland -- hundreds of miles away from most of its facilities. Its culture of decentralization means that locations, and to a certain extent departments, work fairly independently of each other. Stryker EMEA's diversity and decentralization work in its favor in many ways -- chief among them is its ability to tailor the company to local conditions. But it can make interdepartmental relations tricky.

Stryker Corporation in general, and Stryker EMEA in particular, are committed to minimizing the issues that can turn management challenges into costly problems. Since 1990, Stryker has worked with Gallup to increase employee and customer engagement; hire, train, and coach better managers; and increase the effectiveness of the company's leaders. The linkages between profitability, leadership, and engagement are clear, and Stryker works hard, and successfully, to capitalize on them. And the company isn't done yet.

ICE

In most companies, departments and employees are interdependent. Job performance and employee engagement in shipping, for example, can be profoundly affected by the performance of sales and marketing, and the reverse is equally true. Thus, internal customer service can have a significant impact on employee engagement.

The linkage between employee engagement and profitability is well-known, but many companies are less aware of the similar connection between internal customer service and business performance. Stryker EMEA found that the linkage was crystal clear when it started to measure internal customer engagement systematically in addition to other key performance metrics.

"They felt that from a business point of view, it was necessary to reinforce processes, because central functions -- technical service, operations, marketing, human resources, finance, [and] clinical affairs -- were struggling to meet local market needs, while local markets had increasing demands on the center that could not be met or were consuming resources that were not always in line with central initiatives," says Andrew Green, Gallup partner and key advisor for Stryker EMEA. "But how can they identify the issues and areas of misalignment in a way that is effective and efficient if they don't measure them?"

The Internal Customer Engagement (ICE) program looks, on the surface, a lot like Gallup's external customer engagement program, the CE¹¹. And well it should -- internal customers are customers, albeit captive ones, and their emotional engagement is similar to any other customers'. The methodology of CE¹¹ is similar to ICE's too: Gallup studies the company in depth, analyzes the results, and designs a program involving an identity-protected survey.

When employees have finished their first survey, Gallup analyzes the results and determines a baseline that future results can be measured against. Then the company reviews the department-by-department results and formulates workgroup-level action plans. At this point, most companies realize that the survey was the easy part.

Copyright Ó 2008 The Gallup Organization, Princeton, NJ.  All rights reserved.  Reprinted with permission.  Visit The Gallup Management Journal at http://gmj.gallup.com/

Article from The Gallup Management Journal