CEO's still not seeing (or believing) the link between employee engagement and the bottom line?

According to research published this week by Ashridge Business School some CEO’s are still struggling to “engage with engagement”.

This despite the fact that the UK clearly has an employee engagement problem.  Survey after survey in recent years shows that only about a third of UK workers consider themselves engaged – a figure which leaves the UK ranked ninth for engagement levels amongst the world’s twelve largest economies as ranked by GDP (Kenexa 2009).

In November last year Dr Bruce Rayton, from the School of Management at the University of Bath, co-author of another report entitled ‘The Evidence’ – concurred with this figure and suggested this effectively means that two thirds of UK workers (20 million people!), feel they have “more to offer” at work, that they’re not performing to their full capability and potential.

Incidentally, I still hear discussions about whether the business case for employee engagement is proven!  Well if it’s not common sense that workers not performing to their capability isn’t good for any organisation, ‘The Evidence’ report also concluded that the total cost to the UK economy of poor levels of engagement is £26 billion.   And Dr Rayton said: “Engagement predicts future performance better than performance predicts future engagement. In particular, engagement predicts performance several years into the future.

“Engagement occupies a central role in “service profit chains”, with employee engagement leading to improved customer satisfaction, customer loyalty and customer advocacy which in turn drives future sales, operating profits and other financial outcomes”, he added.

And just in case there’s still any doubt, according to Hay “94% of the world’s most admired companies believe that their efforts to engage their employees have created a competitive advantage”.

Back to the latest Ashridge research, entitled ‘Engagement through CEO eyes’.  The research explored the topic of engagement during a year long study with 16 UK CEO’s.  It sought to find out how leaders define engagement, what stops them from leading in an engaging way and why engagement is not happening more in the UK.

It indicated that CEOs define engagement as an “organisational climate in which people choose to give the very best of themselves at work”.  No surprise there.  The CEO’s concluded that “being an engaging leader is hard and requires special skills and attributes” and that there is no single ‘right way’ to lead to achieve engagement, although a ‘command and control’ leadership style has declining relevance in a leaders job.  The report suggested that some leaders feel the difficult economic conditions of recent times is being used as an excuse for poor leadership behaviours.

One CEO said that “It is very easy when companies or countries are in crisis to have command and control and a belief that it needs a hero leader who is telling people what to do to actually get the thing moving forward”.  And several indicated that the challenges of the economy make it easier to ignore engagement, suggesting that it’s tempting to ‘;do what you’ve always done and wait for things to get better rather than do something different, and perhaps uncomfortable.

In terms of the things that stop leaders from leading engagement, the culture and system of UK business was seen as one of the main challenges.  CEO’s believed that organisational hierarchy and a focus on short-term* results are diametrically opposed to creating engagement.  Some leaders clearly still don’t see (or perhaps believe) the connection between engagement and the bottom line.

Other barriers identified in the report were shortcomings in leadership capability, for example poor self-awareness and having limited “emotional connections”, such as being open to feedback and sharing power.  Also traits like ‘leader pride’ may lead to behaviours inconsistent with creating engagement.  One CEO said: “There’s a whole set of worries that goes on with people, most of us like to be popular and actually you can’t.”

However, the good news is that some of the CEO’s talked about how the future of leadership needs to have engagement at its core, particularly given the differing expectations of a multi-generational workforce.  One said: “I think big corporations have got a massive challenge if they think they’re going to retain talented people through command and control and not including them into decision-making and creative processes early on.”

The report concludes that engagement is the better way to release the full capabilities and potential of people at work and in so doing to enable organisational growth and ultimately economic growth for the UK.

I agree - but more CEO's need to 'get it' first.

www.inaccord.co.uk
LinkedIn: http://uk.linkedin.com/in/timhadfield
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*I wrote about the problems of short termism almost 18 months ago.  First here: http://www.inaccord.co.uk/a-customer-engagement-manifesto-for-2012/

and a few days later here: : http://www.inaccord.co.uk/short-termism-the-dumbest-idea-in-the-world/

These issues are still current, and still a big problem!

A bakers dozen of the most common (and damaging) mistakes organisations make with employee engagement activity

During my time as an employee, and more recently as a consultant I've worked with numerous organisations to help them improve their levels of employee engagement. Through these many experiences I've studied what's working well - and not so well, and many organisations are making the same mistakes. Across organisations, industry sectors and national boundaries, variations on a number of common problems come up time and time again.

Here's my baker's dozen of the key issues I've found:

1. Failure to identify and agree the business case at senior levels.
Some business leaders pursue engagement because "it's the right thing to do." That might work in the short term but when business pressures increase or worse still, when the prime sponsor of the work moves on, commitment to it often dissipates. It's important to have a robust business case, with clear business benefits so that it's grounded in sound business logic rather than ethereal generalisations. The view that some leaders still have that employee engagement is 'pink and fluffy' is caused by poor articulation of the hard business benefits.
Learning No 1 - Always identify the business case and secure senior level agreement to it.

2. Inadequate articulation of the purpose of engagement i.e. What should employees engage   with?
An extension of point 1 above, every organisation should be clear about what they want employees to engage with. Employee Engagement shouldn't be about creating 'happy' employees. It should instead be about creating engagement with the purpose of the organisation and generating commitment to help achieve it's business objectives. This implies of course that the organisation must have a clear strategy and that senior people can articulate and explain these to others.
Learning No 2 - Clearly articulate the purpose of engagement in your organisation i.e. "What we mean by engagement is..."

3. Confusing employee satisfaction (and the factors influencing it) with engagement.
Employee satisfaction does not equal engagement. It is very likely that engagement cannot occur without satisfaction and it's often necessary to address the issues preventing satisfaction at the outset of an employee engagement programme. But it's important to remember that the factors causing satisfaction are hygiene factors rather than those which cause deeper commitment to the organisation and motivation to help it succeed.
Learning No 3 - Understand both satisfaction and engagement and the relationship between each state.

4. Making HR responsible for engagement.                
Whilst it may be sensible for HR to 'own' engagement activity it cannot be responsible for engagement across the organisation. Ownership has to be within the organisation and across all areas of it. It starts with leaders, whose role in engaging their people is critical, so a good start point is to ensure that leaders accept and feel responsible. Rational and emotional elements are important. As an aside, it's interesting to consider whether leaders feel responsible for their area only or for the organisation as a whole. Typically engagement progresses as leaders sense of cross functional responsibility increases.
Learning No 4 - Ensure ownership lies with and across the organisation.

5. Viewing it as something that ‘management’ does to everyone else in the organisation.
Traditional organisations were, and many still are, characterised by a culture driven by parent / child behaviours. Management believe their role is to tell and direct people who work for them and they in turn do as they’re told (and no more) and usually look for the ‘ catch’ in whatever it is that they’re told. Those behaviours just won’t produce engagement. Instead everyone must feel valued and able to contribute fully. These are pre-requisites to feeling involved.
Learning No 5 – Ensure everyone is involved and feels able to contribute.

6. Making it all about a survey and / or about the score of the survey.
In some organisations it’s all about doing a staff survey, and then maybe, taking a few actions based on the scores. For others the only important thing is the score. An example of this, illustrating a very narrow and introspective view is that some organisations are happy providing their score is higher than an external benchmark. And if it’s not, then they change the benchmark! I read a comment somewhere last week that suggested that this is like being sick but pretending it’s ok because others are even sicker!
Learning No 6 – Make the survey nothing more than an assessment at a particular moment in time. Instead make it about the relationship between employee and their work and everything that contributes to or impacts it.

7. Assuming you can improve engagement directly.
People are complicated. When groups of people come together the organisational cultures that emerge can be even more complicated and difficult to understand, and change. It’s not like shifting the track and changing the direction – as a signal operator might do with a train. There’s rarely a direct link between cause and effect so there’s no lever to pull which will produce a guaranteed response. Instead it’s about taking actions which affect the environment in which people work so that the conditions are more conducive to engagement. You can’t make them engaged, but you can create conditions in which they are more likely to choose to be engaged.
Learning No 7 – Seek to change the conditions and environment in which people work, and the meaning people attach to their work such that people are more likely to choose to engage.

8. Adopting a ‘one-size fits all’ approach.

It’s worth reiterating the above. People are complicated. And we’re all different. So it just doesn’t make sense to expect everyone in an organisation to respond in the same way to actions intended to improve engagement. A better idea is to be flexible and provide a framework within which people with diverse thoughts, ideas, beliefs and so on can choose to engage.

Learning No 8 – Allow for diverse thoughts, ideas and beliefs by providing a framework within which more people are likely to engage.

9. Failing to take a planned and coordinated approach.
Engagement doesn’t just happen. It requires a series of actions which create (as previously stated) an environment in which people are more likely to choose to engage with and commit to the achievement of the organisations purpose and objectives. Nothing corrodes engagement like inconsistency and over promising and under delivering. To prevent both, actions need to be carefully aligned and rigorously delivered.
Learning No 9 – Produce a roadmap, a schedule of activity designed to achieve your engagement objectives and then rigorously deliver it.

10. Not realising that it requires behavioural change (as well as changes to policies, benefits, conditions etc) and supporting people to change.
The reason engagement is so valuable is that it produces changes in behaviour that are helpful to the organisation and produce improved performance as a result. But before these changes can occur, prior changes in behaviour need to create the right environment in which it can emerge. Organisations should be clear on what behaviours are needed and then support people to make those changes. This is why some of the most successful engagement programmes are inextricably linked to the espoused values and behaviours of the organisation – they’re clear on what behaviours are important and do all they can to embed them.
Learning No 10 – Identify the desired behaviours and support people to ‘live’ them.

11. Not planning holistically so that all elements of the employee experience are aligned to create the conditions in which engagement can emerge.
As hinted at in point 9 above, the actions taken to create an environment in which people choose to be engaged must be intentionally designed and carefully aligned. Inconsistency and contradiction should be prevented at all costs. The positive impact of one action can easily be reversed by the unintentional inconsistency of another.
Learning No 11 – Take a holistic approach, intentionally design and align everything that contributes to engagement.

12. Expecting immediate results and changing approach when there isn’t an immediate improvement or, worse still, giving up on the programme altogether.
Improvements in satisfaction can happen quite quickly as issues impacting it are resolved. As described in point 3 above, satisfaction is more about hygiene factors and as issues are addressed satisfaction can change almost instantly. But engagement is a deeper construct. It takes time to develop numerous contributory factors that need to come together and be experienced over a more prolonged period. So look for changes in satisfaction first, expect slow initial progress with engagement but know that if you are doing the rights things progress will accelerate.
Learning No 11 – Consider engagement as a long term commitment.

13. Closing down the programme (or project) when it’s ‘done’.
Organisations are complex systems. Change in one part of the system can produce unexpected consequences in another. As change is constantly occurring and impacting the organisation, challenges to the development (or maintenance) of employee engagement are also occurring all the time. And this means that constant attention is essential.
Learning No 13 – Embed engagement in and through everything the organisation does, permanently.

Employee Engagement may have been around for more than 20 years but it's clear that organisations are still struggling to meaningfully engage their people. Learning from the mistakes made in other organisations may be a good place to start if you're planning your engagement programme or seeking to re-energise it in 2013. Engagement is complex, but it needn't be difficult!

LinkedIn: http://uk.linkedin.com/in/timhadfield
Twitter: @accordengageTelephone: 0044 07906650019

What has no place in your organisation?

I listened to a radio programme earlier this week about the proposed ban on bullfighting in Mexico City.  It's apparently a big and very contentious issue as it has been popular throughout the country since the conquistadors introduced it more than 500 years ago and for many people is part of Mexican culture.  Although Spain is still recognised as the home of bullfighting, Mexico City has the largest bullring in the world and the sport (I know some argue it isn't a sport) is a popular pastime in the country as well as being a source of employment for thousands.

But in recent times its popularity has been waning and a growing number of Mexicans now actively oppose it, regarding it as both barbaric and an unwelcome reminder of Spanish colonialism.  And legislators in will soon vote on whether to ban it in the city.

In the programme one objector said that "it should have no place in modern day Mexico."

His statement made me think.  I wonder how many organisations have leaders who have thought about and communicated for their people what has no place at work - what behaviours and actions are totally unnaceptable?

Many do of course have a set of values which are intended to provide guidance for how people should behave at work.  I often hear leaders in organisations talking about how important theirs are and, providing they're not simply posters on a wall, they provide employees with guidance about what things they should do.  But far fewer provide the same level of guidance about things they should not do. 

And yet in organisations who do, employees often tell me that the clarity about unacceptable behaviours is as useful, if not more so.  The negatives can provide a clarity that's sometimes missing in the positive statements which by their nature are usually examples of the type of desired behaviours.  In contrast the negatives are often more specific and draw out explicit examples of what does indeed have no place in the organisation.

Is it clear what has no place in your organisation?  And if so, would it be clear to everyone?  Thinking about and clearly communicating this is a useful way of steering behaviour providing there are supporting measures and consequences for anyone who ignores the 'rules'.

I wonder if some of the highly publicised scandals in recent years would have happened if the companies involved had communicated what had no place in their business?

LinkedIn: http://uk.linkedin.com/in/timhadfield
Twitter: @accordengage
Telephone: 0044 07906650019