Effective leadership isn’t just about short-term wins—it’s about creating lasting impact.
“Sustained success is the gold standard for leaders,” says Harvard Business School Professor Ryan Buell, who teaches the online course Transforming Customer Experiences. “How can leaders build a foundation for success that lasts?”
His answer lies in investing in your employees. This means identifying and addressing challenges that hold your team members back by building trust and improving initiative. Doing so keeps your employees motivated, engaged, and committed to shared goals.
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Start by Building Trust with Your Employees
Developing trust in today’s profit-driven economy can be challenging. Yet, authenticity, empathy, and logic are essential for leading with honesty and integrity, whether in personal or professional relationships.
When leading a team, transparency is essential. “Asking our employees for their ideas, and truly listening to what they have to say, is an act of empathy,” Buell says in Transforming Customer Experiences. “And taking their ideas and incorporating the best ones into our plan for the future is a great way to [have] a logical plan that just might work.”
With these qualities in mind, you begin to shape a company culture that motivates employees and drives long-term success.
Improve Employee Initiative: 3 Steps
Building trust takes time and varies depending on your employees’ and business’s needs. Transforming Customer Experiences identifies three core steps that reliably boost employee engagement in various situations and organizations: capability, motivation, and license.
Each of these steps contains top-down and bottom-up approaches:
- Top-down: Initiatives that start from managerial levels and make their way down to employees
- Bottom-up: Initiatives that begin at an employee level and rise to management
Both approaches are essential for fostering a highly motivated team and can enhance employee performance and satisfaction. Top-down and bottom-up tactics are explored further through capability, motivation, and license, as described below.
1. Capability
Capability refers to the knowledge, skills, resources, and processes required to perform a job.
While many aspects of capability—such as training, protocols, and resource allocations—are typically implemented from the top down, Buell notes that true capability-building also requires management to trust employees’ expertise.
“We need to recognize that, as leaders, we don’t have all the answers and that there are a lot of great ideas locked up inside the minds of people throughout the organization,” Buell says in Transforming Customer Experiences. “The people who do the work are usually the best at identifying how we can do this work in better ways.”
2. Motivation
Motivation is driven by the incentive structures within a company, team, or position. It comes in two forms: extrinsic and intrinsic.
- Extrinsic motivation consists of top-down incentives and penalties set by management. For example, this could include a bonus for tackling additional responsibilities or a mandate to work overtime for someone underperforming. While common, extrinsic motivation alone isn’t enough to create a thriving environment.
- Intrinsic motivation is the general sense of purpose and drive an employee feels toward their position. Employees who believe their work is appreciated and meaningful are naturally more engaged. By fostering this bottom-up approach, you can create a more motivated and empowered workforce.
3. License
License refers to the permission structures that allow employees to approach their work as they see fit, even if it means deviating from standard practices.
While permission comes from the top down, employees will only use it if leadership has cultivated a culture of psychological safety from the bottom up. Employees must feel confident that they can take initiative without fear of punishment. By encouraging employees to think creatively and independently, you empower them to perform at their highest level.
Create a Positive Performance Feedback Loop
While capability, motivation, and license are important on their own, Buell notes in Transforming Customer Experiences that all three must work together to build trust and drive performance.
“Capability and motivation are mutually reinforcing,” Buell says in Transforming Customer Experiences. “The more capable I am, the more motivated I am to get out of bed in the morning and do the work. The more motivated I am, the faster I become better at the work that I do.”
License further strengthens this cycle. The more license an employee is granted, the more they can cultivate their own capabilities. This sense of autonomy further enhances their intrinsic motivation, creating a positive feedback loop that continuously improves your team’s trust and performance.
Related: 4 Characteristics of an Effective Team
Avoid a Negative Feedback Loop: The Death Spiral
A negative feedback loop can be paralyzing, undermining even the strongest teams. Capability, motivation, and license can’t thrive in a culture of hypocrisy.
For example, years of effort spent building a highly motivated team can quickly be undone by C-suite bonuses followed by layoffs and budget cuts. Though avoiding such missteps may seem like a low bar, many companies still fail to clear it—contributing to widespread erosion of employee trust and economic stability. Within a single company, these actions can trigger what Buell calls the “death spiral.”
As Buell explains in Transforming Customer Experiences, the death spiral occurs when a company begins cutting costs. This could mean cutting back on tools that support a more effective or enjoyable work environment, leading to a decline in morale and performance. The performance decrease soon becomes evident to stakeholders. As pressure builds, employee morale drops even more, creating a negative feedback loop that becomes increasingly difficult to escape.
While fostering employee capability, motivation, and license can help mitigate a negative feedback loop, it’s more effective to implement them proactively when your business is thriving. Prioritizing trust-centered decision-making helps prevent a death spiral—ensuring stability, engagement, and long-term success for your employees and organization.
Investing in Employees Leads to Improved Customer Experience at Zappos
One company that exemplifies the power of investing in employees to drive customer satisfaction is Zappos. The online retailer has set the standard for customer service across industries, pioneering policies such as 24/7 customer support, 365-day return policies, and free shipping. Its commitment to customer service is captured in its slogan: “Delivering Happiness.”
Zappos also recognized that investing in employees was essential to creating this customer experience. In 2005, it polled its entire employee base to develop 10 core values that would shape its culture.
Values like “Deliver WOW Through Service” and “Create a Little Fun and Weirdness” fostered license within Zappos’ customer service team. This freedom to make impactful decisions without managers’ approval led to the customer service team becoming known for going out of their way for customers.
Some moments even made headlines: One employee sent flowers to a customer’s mother, while another stayed on the phone for a record-setting 10 hours and 43 minutes. These stories not only captured public attention but also reinforced internal motivation and team performance.
By empowering its employees to deliver a customer service experience that’s unique and effective, Zappos became a model for showing how prioritizing employees can elevate brand reputation and customer loyalty.
Invest in Your Best Asset: Your Team
Achieving your company’s long-term goals starts with investing in your greatest asset: employees. By nurturing trust and a culture of capability, motivation, and license, you can drive meaningful improvements in team initiative and performance.
To dive deeper into these strategies and learn tools for improving employee performance, consider taking an online course like Transforming Customer Experiences. You’ll accelerate and reinforce your learning through interactive exercises, peer engagement, and real-world examples from successful business leaders worldwide.
Ready to transform your customer experience and build lasting loyalty? Explore Transforming Customer Experiences—one of our online leadership and management and entrepreneurship and innovation courses—and download our online learning success guide to learn more about how an online program can benefit your career.
