Saturday Edition
I've often wondered why many organizational leaders don't get it about "workforce engagement." Some pay lip service to it but don't invest in it, while others simply discount it. I had a conversation with a Big Pharma executive a few years ago who thought "employee passion" was "fluff." He said his company focused on talent and bottom line results, period. (He couldn't see that a company with a reputation for having an engaged, inspired workforce MIGHT be a better talent magnet.) Meanwhile the latest Gallup survey shows that only 31% of employees are "actively engaged," 52% are "not engaged," and 17% (over 23 million U.S. workers!) are "actively disengaged."
For those who want data on the quantitative value of employee engagement, there's plenty of it. Gallup estimates that the lost productivity of the 17% "actively disengaged" employees costs the US economy $370 BILLION annually (not to mention the lost productivity of those 52% who are merely "not engaged").
Curt Coffman and Gabriel Gonzalez-Molina in Follow This Path reveal that business units in the top half of employee engagement (compared to those in the bottom half) have a higher success rate of: 86% in customer metrics; 70% in productivity; 70% in reducing turnover; 78% in safety metrics; and 44% in profitability.
And according to a 2004/2005 study by Watson Wyatt USA "the financial performance of organizations with highly favorable employee attitudes is typically nearly 4 times better than the financial performance of companies with poor employee attitudes."
There are plenty more studies to cite, but you get the picture. How come more business leaders don't?
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Before blogging became all the rage, Tom was posting book reviews and Observations (essentially early blog posts) to this site. You can find the archives below.
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Comments
Enjoyed your article. I thought it was well written, substantiated and on the 'mark".
Posted by Sam at September 6, 2006 10:23 AM
With the "I" word (innovation) now getting much attention among CEO-land, what kind of workforce will drive the "I"? Engaged or not engaged?
Posted by JH at September 6, 2006 10:43 AM
Business leaders DO get it - USA unemployment is at an almost record LOW - TALENT is at a premium ... those with OPTIMISM inherent and POSITIVE attitudes migrate to best companies. The rest go without best TALENT and/or try to CREATE IT - hard to compete with those born and raised with IT.
Posted by sean at September 6, 2006 10:57 AM
The businesses that don't get it are dominated by Finance (a majority). As a discipline, Finance focuses on the other-than-human factors. Finance-led compnaies either try to design systems that reduce human involvement or do what I describe as "outflanking" it.
The current passion for measuring success in Finance terms (ROI, Sales/staffer, growth of gross) is a regulator on how many companies will pursue a The Talent Is The Product kind of operation. They can change their charted course, but as long as Finance is at the helm, they're going to have a heck of time getting there. The gravitational pull of the human-excising mindset and processes is hard for most organizations, especially publically-owned ones.
And a note on U.S. unemployment. The measure is neither low nor high right now. It's in the middle of post-WWII numbers.
ftp://ftp.bls.gov/pub/special.requests/lf/aat1.txt
Of course, one of the challenges with these numbers is they trend weirdly over time. Note the last column...the number of people "not in the workforce". That eccentric trend is based on chronic re-definition, frequently for political purposes. For example, in 1972 for a time you were only in the category "unemployed" if you were collecting unemployment benefits -- so those indivduals looking for work but who didn't qualify to collect benefits didn't count in the unemployment rate, which kept the number looking medium. BTW: Whichever party is in control of the executive, this tends to happen.
In general, you should take those numbers, based on changing measures over time, about as seriously as the editorial page of .
Posted by jeff angus at September 6, 2006 11:50 AM
that was meant to be "editorial page of the news source you hate the most".
Posted by jeff angus at September 6, 2006 11:52 AM
Thanks, Jeff. I LOVE what you say about finance-led companies designing systems to "outflank" human involvement. Beautifully put. Whether they be financial or technical, many leaders are still only comfortable dealing with the "hard" stuff (numbers) and not the "soft" stuff (even talent development in some cases). Culture, employee attitude, workforce morale are something bordering on the mystical to them. Based on the growing attention that the "soft stuff" has received in articles and books (including Tom's of course) I would hope the tide would be turning, but the studies I've seen just don't reflect that.
Posted by John OLeary at September 6, 2006 2:00 PM
John,
Thank you for the article. Perhaps it is because I have been around such a long time, but while I look for numbers to substantiate my strongly held beliefs, I prefer to use customer instead of employee numbers to prove the value of employee and customer engagement--the key, I believe--to maximized business potential.
Human touchpoints drive brand image. In customer research, including focus groups, customers primarily base their perceptions of a brand and that brand's products and services on their experienceswith the brand, more so than on performance, packaging or price, also important but not to the level of experiences.
Those customer experiences that create the largest emotional impacts are those with employees, whether they come from customer call centers, telemarketers, help desks, receptionists or store employees. We don't need outside data to substantiate this, although it exists. We can use common sense and our own shopping experiences as our primary data.
Since human touchpoints and business-to-customer/client relationships drive brand image, and customer experiences drive loyalty and future sales, those executives who call employee engagement "fluff," I assume, do not believe that customer/client relationships with their businesses matter.
At least that is what I find with the clients who call me because their sales figures are failing to meet goals. During my 30+ years experience, I find more often than not that primary mover of sagging sales has little to do with products and services but has lots to do with the company's low productivity levels from disengaged employees, their poor customer service record due to disengaged employees, and a disengaged customer base.
Unfortunately, I cannot help most of them because they believe the solutions lie in doing more of the same (cut costs and focus more on the bottom line), only better and faster. Few believe that the problem lies in their business model or their business philosophy. I see them as those who believe if they just squeeze the rock a little tighter, blood will eventually pour out.
Posted by Lewis Green at September 6, 2006 2:01 PM
Yes, Lewis, I unfortunately agree. I'm also the one that gets called in to "fix the sales thing". Arrogance abounds. Few senior level executives believe that they might possibly need to tweak/change their business model or philosophy in general. The blame is placed squarely on the employees and those pesky customers.
Imagine being a member of a sales team managed by an executive who considers you yet another dog on the truck. Ouch.
Posted by Kate at September 6, 2006 3:30 PM
A tiny example of this, from a customer's point of view:
I live across the street from a Subway restaurant. I go there 4-5 times a week. I usually order the same thing. The same guy is always working.
And yet, after almost a year, the guy never shows any recognition. He never smiles. He never displays any sort of emotion. Never a "how ya doing today".
This guy is completely disengaged-- and that has started to bug me so much that I'm now walking an extra 5 blocks to visit another Subway where the people are smiling and friendly.
What is the management/owner doing (or not doing) to foster this kind of apathy. I've had plenty of crappy McJobs, and I don't expect wild passion from folks working them. But certainly a little humanity would be nice. I would think that the owner, if no one else, would consider this a priority for his employees. But apparently not.
On a more positive note, the employees at the Starbucks nearest my apartment are friendly and engaged without fail. I don't even like Starbucks coffee very much, but I'm impressed by the fact that an employee remembered me after just my second visit. I prefer to go to small local places, but still find myself wandering into this Starbucks on occasion, just because I know the people will be so pleasant.
Posted by AJ Hoge at September 6, 2006 3:45 PM
John,
John O - "Culture, employee attitude, workforce morale are something bordering on the mystical to them. Based on the growing attention that the "soft stuff" has received in articles and books (including Tom's of course) I would hope the tide would be turning, but the studies I've seen just don't reflect that."
Being on the side of Team Re-invention/Re-imagine, but still posing a question... Is there a bigger hammer that could be developed/discovered that will drive home the point and help construct the "house of Tom" and "house of Gary Hamel" and "house of Marcus Buckingham" (and others) more "impactfully", in what is now neighborhood "Dilbert-ville"??? The links, regarding Gallup studies and the 'state of people engagement' , seem to indicate that Team Re is still confronting an awful lot of kryptonite.
Posted by JH at September 6, 2006 3:46 PM
A great question, JH: "Is there a bigger hammer...to drive home the point...?" Got any ideas? We're all ears here!
Posted by John OLeary at September 6, 2006 5:03 PM
Engagement is also about intimacy. Without getting upfront and personal, there will be no connection with the employees. Getting to know every aspect of what they think is important.
"Patience is the most necessary quality for business, many a man would rather you heard his story than grant his request." --Lord Chesterfield
What we in todays world look for-- is the bottom line, productivy stat's, talk time figures, sales cycle etc., and never really stop to listen. 99% of enagement is listening. somewhere up the corporate ladder, the art of listening seems to diminish. Its only when the upper echelons breath and live this culture will the cascade effect take place within the work force.
TP has always harped about MWBA stratey. Why don't we see that happening in the real world ? It's because a lot of the mindset is caught up with "ivory tower" syndrome. The corporatation will not tolorate a manager speaking about business plans too a production worker on the floor shop- why ?? Because they have a supervisor who can do that.. thats a lot of crap and big big BS !
Lipservice is cheap !!
"After all that is said and done- more is said than done !"
Posted by /pd at September 6, 2006 6:41 PM
John O,
Maybe an initiative of a "if you build it, they will come" vision is a hammer to consider. Just playing around with some ideas on a "napkin", so I pre-acknowledge their limited practicality but imagine... a Tom Peters' Re-Imagine/Re-Invention University, or Tom Peters’ own research effort that might be likened to an "EPCOT" with a twist (Experimental Prototype Corporation/Culture Of Tomorrow) bringing together the "gurus", under one roof so to speak...to build the "hammer".
Basically, if the book writing gigs, speaking engagement gigs, short-term consulting gigs, and blog-sphere, still leave you with a sense that much work needs to be done, what other impact generating vehicles could be developed, launched, and engaged that complement and encompass TP's (and others) revolutionary ideas?? Result: Re-imagine/Re-invention type love spreading and transitioning more "Dilbert-like" institutions to Wow!-land, better, stronger, faster (Steve Austin-like).
Posted by JH at September 6, 2006 7:34 PM
JH : "Maybe an initiative of a "if you build it, they will come" vision is a hammer to consider"
Rephase Pls : "if you RE-build it, they will come" !! :)-
Posted by /pd at September 6, 2006 7:38 PM
Cross-reference: Thinking of John's insightful comments in terms of the service scripting observations I made above. Employees who are trusted to be themselves ... one way to engage them.
Posted by Steve Yastrow at September 6, 2006 7:58 PM
Being employee-centric not just customer-centric goes a long way to creating "engagement"!
Posted by Jody at September 6, 2006 10:51 PM
Love the Aesop quote, /pd. And the Tom Peters Re-imagine University idea, JH. How are you at fundraising?
Steve & Jody: this reminds me of the Southwest Airlines approach - a subject that deserves a blog in itself. Southwest focuses on inspiring employees who will then inspire customers. And they encourage employees to be themselves - spontaneously so. (Forget about scripts - the flight attendants will do safety announcements that are PARODIES of what you'd hear on United. "Anyone who is caught smoking will be invited to step outside on our wing for a viewing of Gone With the Wind.") For SW it ALL starts with the employees. And this gang has FUN.
Posted by John OLeary at September 6, 2006 11:20 PM
To me its all about ATTITUDE with a CAPS "A".
To quote the legendary A.H.Maslow "If the only tool you have is a hammer, you treat everything like a nail."
Posted by K.Sriram at September 7, 2006 5:43 AM
The "hammer", I think, is really turned sideways to be a fulcrum, and that fulcrum/hammer is "hiring the right people".
In U.S. society anyway, where people have reached an angle of respose with the idea that "big faceless corporations" "don't care about them", most incoming staff start their first day with little hope and the first few (inevitable) stumbles have them resolve that very quickly to their set point. Yastrow's recently posted 16-point mechanized roadmap to sanctioned behavior is one of the kinds of things that ossifies the preconception into programmed responses to the belief.
If you hire the right (willing to think differently, or think the same but be willing to be neutral and give the org a chance to prove it is working at being ab-normal) people, and just give basic incentives for correct behaviors, and root out and expel the counter examples quite publically (one has to overcome the Legal Department & usually lawsuit-averse H.R. teams to do this), then you have a fighting chance.
This is one of those place where the Diseconomies of Scale just kills big organizations. Because a big organization has no more implicit ability to hire 10 good people than a small one, and the 10 good people have a smaller positive effect on the bigger organization.
And the bigger orgs are more likely to have Legal or HR departments that are more interested in avoiding potential negatives than to do battle with certain mediocrity, so they embrace certain mediocrity to enhance their own comfort. Smaller organizations don't have that luxury of comfort over performance, so there's another reason bigger organizations struggle with the unsmiling Subway sandwich slinger.
Posted by jeff angus at September 7, 2006 11:17 AM
Most business leaders (those with appointed authority)are afraid to approach engagement. They often feel superior to those they lead and therefore don't see value in what their people think or feel.
I feel for those who lead without seeking engagement. The "wake up" is very harsh...
Posted by Eric Pennington at September 7, 2006 12:06 PM
This discussion while it's about "culture" should also consider the negative aspects that may exist within individual workplace cultures than detract from high level morale and performance. Very often managers either implicitly tolerate or are not vigilant in detecting behaviors that enervate work groups. Forms of harassment including sexual harassment and demeaning co-workers or subordinates and unethical behaviors including lying and cheating undermine achieving standards of individual performance. Every employer owes it to his or her work force to explicitly state those behaviors that are acceptable and those that are not and to express these expectations in a clear, concise language.
Over the last 18 months or so we've become aware of so-called unacceptable treatment of captives in Iraq. How many reading this know that the Geneva Conventions do not define the specific activities that Article Three of the Conventions purports to condemn? Such vagueness is not helpful in setting standards or in establishing accountability and responsibilty within work groups.
E. T. O'Leary
Posted by E. T. O'Leary at September 7, 2006 12:18 PM
pfizer canada viagra I think we're confusing "creativity" and "innovation." buy viagra generic online
Creativity is coming up with ideas. Humans do this naturally unless you train it out of them. Even then they still have the ideas, but don't talk about it.
Innovation is different. It involves making a change based on one or more of those ideas. Innovation is a discipline that individuals and organizations can develop.
Creativity is about widening the idea pipe. Innovation is about narrowing down the pipe to something useful.
Engaged employees will share their ideas and participate in the work of innovation.
Posted by Wally Bock at September 7, 2006 1:37 PM
One obvious conclusion to draw from these responses is that there are MANY factors contributing to an engaged, motivated workforce - some are more foundational, others more direct.
E.T, here’s a thought about engagement "detractors" like harrassment and unethical behaviors: their absence is not likely to boost inspiration or engagement but their presence can certainly destroy it.
Wally, I like the idea of distinguishing between creativity and innovation – which often get collapsed. Another way of thinking about it is that creativity is an ability while innovation is a process (or the outcome of a process). But either way, business leaders need to appreciate that employee engagement and innovation go hand in hand, in a dance where the partners are inseparable.
how to buy viagra in australiaPosted by John OLeary at September 7, 2006 3:24 PM
I hire first for personality, and THEN for skills. BOTH are important. We can easily train skills, it is much harder to train for engaging personalities.
Posted by Tom Kirkham at September 7, 2006 4:35 PM
Some leaders are uncomfortable dealing with things they can't measure with precision -- they don't trust survey scores or they don't want to deal with what these surveys may reveal.
Posted by Ricardo at September 8, 2006 9:15 AM
Many business leaders don't get it because they haven't seen it done. They can't visualize an engagement culture because they don't have a system for effectively leading, managing, and coaching their employees.
Software "solutions" rule the day for many of them. They would rather deal with "evidence" than people. They would rather trust the latest survey, questionnaire, study, etc. than their frontline leaders.
Engagement means involvement, asking honest questions, giving honest input, and suggesting better ways of doing things. Many leaders immediately feel threatened. Many things, most often their egos, are challenged when employees get involved in employee engagement.
They are definitely not Level 5 leaders.
Posted by Dave Sovde at September 8, 2006 1:30 PM
I have to differ with you, Dave. While I think an engagement culture is rare across organizations, I've found that there are engaged pockets in almost every organization. Even better, most bosses have experienced that kind of work team.
We do an exercise in my training where we ask new managers/supervisors if they've ever had a time when they thought it was great to come to work. In almost all classes, everyone has.
Next we ask them to describe what that was like and then to develop a list of characteristics of what I call a great working environment. With minor variations, here's what we get from every class. The results have been pretty consistent now for twenty years.
The work should be interesting and meaningful.
There should be clear and reasonable expectations for behavior and performance.
There should be regular and usable feedback.
Things should be fair, which we define as having performance and consequences match.
The environment should be consistent.
Individuals should have the maximum control possible over their work life.
Participants also discuss what kinds of things made that environment work. For most of them, most of the time, it's their immediate boss. That's why you can have pockets of engagement in otherwise awful organizations.
Posted by Wally Bock at September 11, 2006 11:03 AM
Wally, I think I may have not been specific enough. Of course their are "pockets" in every organization, but "I think an engagement culture is rare across organizations" makes my point about few people having the opportunity to work in one. I was referring to leaders and managers having the experience of being a part of a company focused on employee engagement, not a work team.
Posted by Dave Sovde at September 11, 2006 1:42 PM