The employee engagement and feedback tools market has been explosive. As I wrote about in Feedback is the Killer App, giving employees the ability to express their opinions has transformed the world of management. CEOs and business leaders everywhere are now evaluated by their ability to keep employees happy.

And there's good reason for this. As the iconic study The Service Profit Chain discussed a decade ago, employee experience is directly related to customer satisfaction. When employees are happy, they build better products, they innovate more, and they spend more quality time with customers. We all know this from our time on airplanes, in grocery stores, in the doctor's office, and with almost every purchase we make.

Economically, the need to engage employees has been accelerated by a massive change in business models. While companies madly try to build digital platforms around their offerings, the percentage of business value going to services is skyrocketing. Today more than 85% of US stock market valuation is based on intangible assets, and these are all people-related things (intellectual property, services, brand, customer loyalty).

Every company is in the people business. So if you want your customers to be happy, you need your employees to be happy.

Building a Feedback Culture and Architecture

How do you build a company that listens?

Unleashing feedback is both a cultural and technical problem. On one hand, you have to build a management culture that lets people feel safe and comfortable talking about what's on their minds. And this is harder than it sounds: we don't want people to just complain, we want them to give each other constructive feedback, offer developmental advice, and share unbiased information that helps managers make the workplace better.

At Netflix, where I discussed this with the CHRO a few years ago, the motto is "don't say anything online that you wouldn't say face to face." The company thrives on honesty, and everyone knows it's ok to say what needs to be said.

At Patagonia, Dean Carter the CHRO told me it took a few years for feedback to take hold. The first year they built a feedback-based performance process people were nervous about speaking up; the second year, as people felt safe, the program really took off.

In Ray Dalio's book Principles (where he describes why and how he came up with "radical transparency" as a management philosophy), he describes how his company has automated feedback and even measures the "reliability" and "authority" of each person to rate some people more "influential" than others.

At IBM and many other technology companies, tools like Slack and online communities let people openly discuss issues all over the world. Diane Gherson, the CHRO of IBM, has told me she can almost immediately sense when there is an employee grievance or management problem at IBM because these conversations are open and easy to see. For years Amazon has an "always-on" feedback system which has become quite famous in its ability to surface issues.

Given what's happening with social media today you may worry about opening up this channel, but let me assure you it's a very positive thing. Every company who's created a more open culture has told me it was positive, and we now have tools to make it easy.

This has been a journey. When I started studying this area a decade ago I found that over 60% of companies didn't survey their employees at all, and those that did only did it once a year. Today it's common for companies to use pulse surveys to listen to their employees regularly (there are hundreds of tools in the market that do this) and the data comes right back to line managers almost immediately. We don't need HR consultants to "analyze" or "sanitize" the data first.

At Workday, for example, the company now asks all employees a single question each week, and the results of these surveys go to line managers so they can immediately see if there's an issue they should address, well before it gets out of hand.

Creating a Feedback Architecture

Right now there are hundreds of tools to make this easy. (In fact every piece of HR software now has a feedback feature, check-in module, or other survey tool included.) SAP just paid $8 billion to acquire Qualtrics to build a CX (customer experience) solution. Ultimate Software, Workday, Cornerstone, Oracle, and ADP offer feedback tools, and vendors like Glint, CultureAmp, WillisTowersWatson, Peakon, Perceptyx, SurveyMonkey, Waggl, and hundreds of others offer these systems. And every major provider of performance management software now includes "check-ins" (feedback), so there is no shortage of tools to buy.

But as you look at these tools, I think it's important to think about your company's "feedback architecture," so you can group all this feedback as a whole. This requires a capability which Glint calls "cross program intelligence," to pull all these things into a meaningful set of findings.

And by the way, I know all these tools are starting to work, because employee engagement has gone up (across all Glassdoor data) by 8.7% over the last three years. And I do believe this is because companies know much more about their employees' needs than ever.

But let's move beyond the data collection topic and talk about what's coming next. While your HR department probably loves doing surveys, the big problem comes when you try to use the data: how do we get all this data to make a difference?

Moving From Feedback to Action: With Managers Often At the Center

The employee engagement industry started as a world for statisticians and industrial psychologists. We had a special little group in HR that developed these surveys, analyzed the results and tried to find the most highly correlated questions. Well those days are over now: we have floods of feedback data (surveys and comments), and it's time to use it all. So the industry is moving ahead.

How do we know what questions to ask? And what do we do with all the data? Do we just give it to managers to ponder, or can we do something more intelligent with this information?

In my years studying employee engagement, I found that its actually a complex issue. Employees have a wide variety of needs at work, so you have to have an expansive view. The model shown below (which I developed over the years) tries to bring it together.

In some groups, for example, managers micro-manage their teams - so people feel unempowered and frustrated. In others people don't know what they're accountable for, so they struggle to set priorities. In others the workplace is distracting or noisy, so people don't feel they can be productive. And in others people don't feel they can get ahead, so they feel stuck in place. In other companies employees don't trust leadership, and as you can see the list goes on and on.

What I suggest you do is think about this as a holistic problem, and get comfortable with the fact that all these issues are important. Rather than try to statistically correlate which matter most, let your employees speak up on all these topics. They'll tell you what matters.

Helping Managers Take Action

Which brings us to where we are now. What do we do with all this information? How do we use this information to help managers and individuals improve? Feedback systems need to become more intelligent, and send actionable nudges, alerts, advice, and tips to leaders and their teams.

The chart below shows you where we are going. The new generation of tools are now able to analyze and interpret all this data, and then give managers specific actions to take. In a sense we are moving from a market of feedback to one of "management development," where the system becomes a real "management system" to help us continuously improve.

Several months ago I wrote about this topic as I introduced Humu, a company that's trying to define this new space. Most recently, however, a big announcement from Glint (now part of LinkedIn), really caught my eye. While I don't want to overly promote the company, I think it represents a new way of thinking, and one which predicts where this whole market is going.

The Manager Concierge: A Dashboard of Tools To Make Management Easier

Glint's vision, which I have watched evolve over the years, is that engagement and feedback surveys are important, but it's the actions that really matter. Most engagement companies have "action plan" templates in their tools, but they are really afterthoughts bolted onto the survey reports. Glint is going much further.

Consider an important finding from the Hawthorne study conducted in at Western Electric in the 1920s. The "Hawthorne effect," which many of you know a lot about, found that as psychologists turned up the lights in the plant, productivity went up. But then when they turned the lights back down, it went up again!

The results, which are fascinating to read, concluded that it was not the lighting that really drove employee engagement, it was "the fact that management was paying attention," and that "managers are doing something to make work better."

In other words, if you can get managers to read the results of all these surveys and talk with people about them, positive results will happen.

Getting Managers To Take Action

So how can we make this happen? As I described above, it takes a combination of culture and technology. First, you do need to make sure senior leaders care, because if managers don't believe they are rewarded for taking care of employees they just won't think this way. But once you get to this point, these new tools are doing transformational things.

In the new Glint system, for example, real-time data from surveys is analyzed and aggregated in the manager's dashboard, and managers are given very specific action plans to take. These plans are simple and easy to understand, and as managers click on them and mark them completed, the system gets smarter and does more.

The action plans take the form of nudges and suggestions, and in future versions will point managers directly to micro-learning videos and LinkedIn Learning courses that help managers really learn how to perform better. All this directly targeted by employee survey results and narrative intelligence analyzed from employee comments.

There is quite a lot of technology going on here, and this moves the survey system far beyond that of a feedback tool into a true behavioral change system, based almost entirely on real-world data. And as you can imagine this solution will get better over time, as each workgroup gets more results and managers see the impact of their new actions.

Glint did research on this topic themselves, and the company found that managers who ause their action plans increase engagement by 7 points (out of 100), and teams who believe managers will take action on their feedback are 8-times more likely to have highly engaged teams. So the Hawthorne effect works, regardless of how "well designed" these action plans may be.

How Do You Put This Into Practice?

Do you need a new toolset to make this all happen? Well first the answer is yes: these new tools are really starting to mature, so I do suggest you move beyond "surveys" and look for systems that provide more actionable information to your teams. But this market is still young, and many of you may be new to employee surveys or are just now starting to get enough data to make all this happen.

What I'd suggest is that regardless of the technology you buy, you can move in this direction right now. If you're an HR professional, think about this whole domain as a problem of "driving results," not one of "collecting data to see what's going on."

Consider the process I show below. First you need to get the feedback data in a place you can find it, and this is a problem you can solve with tools. Next you need a set of dashboards, meetings, or events that force leaders to share what people said. Third you need to give managers tools to help them decide what to do, then fourth you need to encourage (or force) managers to talk about their action plan. And then of course feed this back and see what happened.

While technology will help a lot here, you can do this manually as well. At IBM in the 1980s we did all these things through the "Annual Opinion Survey," a forced march program that made all line managers go through these steps once per year. It was months of effort and lots of custom processes, but today you can do this yourself.

Remember That Managers Don't Always Know What To Do

As we move from "feedback to action," I just want to remind you of one more thing. Most of us are surprised to hear that we aren't perfect at what we do, and then when we get the feedback we aren't sure what to do about it. So at the core of all this we need to give leaders a set of tips, tools, suggestions, and even coaches to help them deal with the issues that come up.

As I told the Glint execs when we talked about all this - ultimately what they're building is a new generation leadership development system. Leaders get feedback on what's not working, they get tips on how to improve, and the company and their team gets better over time. This not an employee engagement or feedback tool, it's a new management system that helps leaders at all levels monitor and improve performance in many ways.

Remember, also, that much of the feedback people have at work is not about you. It's about the work, the workplace, the systems, and the process. Employees have vital and very valuable information about what's frustrating them at work (hence the huge growth in employee experience tools), so remember that some of what you'll learn is simple things that just have to get fixed. If you create a culture of "reflection" and "after action reviews" and "open feedback discussions," you'll start to see what these things are and everyone can make the workplace better.

There's a lot more going on in this space, and we're building a whole course to help you learn. But in the meantime the story is simple. It's time to move from "feedback to action" in your entire employee engagement strategy, and look for tools and content that make this easy. Culture is more important than ever, but I"m happy to say the tools we use are getting pretty exciting, and this is going to make workplaces better every day.

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Josh Bersin is a global industry analyst who studies corporate HR, talent, leadership, recruitment, and all aspects of HR and workplace technology. He is the founder of Bersin by Deloitte, a frequent speaker at industry events, and consults with organizations around the world. You can reach Josh here on LinkedIn or on Twitter at @Josh_Bersin . (Disclosure - Josh provides consulting and advice to brands, including LinkedIn.)