The engagement deficit – the high cost of doing nothing
In the first of a three-part series, change-management expert Andre Labonte, who is a guest lecturer at Bermuda College, writes about the importance of keeping employees engaged.
Much discussion lately has focused on Bermuda's economic plight. Our annual deficit has come in for daily comment and many pundits discuss the alternate views of tackling it directly or taking a more balanced approach and preparing a glide path into the future. Hidden in the economic discussion however the problem of how the current extended downturn is affecting business directly, or more to the point how it has affected individuals in those companies.
One of the spin-off effects of our economic situation has been a squeezing of both the public and private sectors to do more with less. We've heard that term bandied around for sometime but in the corporate world in particular it's had some other undesirable effects. There is an adage in business circles, in good times you should advertise, in bad times you must.
The same can be said about organisational engagement. In our current fast-paced environment many managers derive much of their acumen from popular business journals and blogs such as Forbes, McKinsey Quarterly, or the Harvard Business Review. Though they offer much in the way of new ideas and trends there is a tendency in this business blogosphere to either water down or sensationalise the research concepts that are presented showing the latest magic bullet to increase sales or successfully run an organisation.
The danger of this research simplification is that it at best gives a taste of what has to happen to make effective change possible. Often these overarching themes are in serious need of having some nuts and bolts applied. But what is too often lost is how the individual employee, the most important aspect of any business proposition, is impacted. Engagement, and in particular, employee engagement, appears to have fallen into that category.
Companies tend to look at engagement as a one-way street. How much is my employee willing to give of himself to attain the organisation's goals? But while most executives understand the linkages and see a clear need to improve employee engagement they have yet to develop tangible ways and verifiable means to measure and tackle this goal. In many ways it's the ultimate business common denominator: leverage. If I as an individual can do x amount of work, several of me can do x times as much. If you add to that different specialisations and ability levels you get the multiplication effect modern businesses were built around and ultimately rely on.
Unfortunately many organisations stop there. People with particular skill sets, attitudes and experience levels often get reduced to numbers and are grouped into charted trend lines on human resources quarterly reports. There was a report by workforce.com recently that 70 per cent of HR administrators strictly used an analysis of what skills and experience a candidate had rather than the quality of the individual and their overall potential when filling a position. That begs another question as to whether the best candidates are being hired, but it also gives a window into current corporate thinking regarding tools versus people.
When the going gets tough, the tough start cutting. In much of the Western World the latest deep recession has given business corporate culture the opportunity to force prune organisations to get employees in line or face the very cold alternative outside world of unemployment. While this attitude did and still does have many advocates, particularly in Bermuda because of its ongoing conditions, the desirable effects are often short lived, and do nothing to unleash productivity on the scale that true engagement does. It can also have the deleterious knock-on effect of forcing very skilled, disaffected initiators out the door creating a skills and experience gap just when economic conditions show signs of improving, hindering potential future growth. A recent Harvard Business Review article titled “The Impact of Employee Engagement on Performance” echoed this sentiment stating: “For the past several years, companies have been increasingly monitoring their engagement levels, as a growing body of research has demonstrated that having a highly engaged workforce not only maximises a company's investment in human capital and improves productivity, but it can also significantly reduce costs, such as turnover, that directly impact the bottom line”.
Tower Perrins' 2006 global survey found that companies with highly engaged employees had a near 52 per cent gap in performance improvement in operating income, compared with companies whose employees had low engagement scores. Effectively companies and their CEO's tend to look at engagement as an idea emanating from an employee but in reality organisational engagement as a business research direction and productivity tool was actually developed to enable organisations to reach out to their employees and leverage employee's tacit knowledge.
Research by David MacLeod and others found some of the things we probably logically assumed but had difficulty being able to prove. In particular MacLeod and Nita Clarke's research report, entitled “Engaging for Success”, described engaged employees as being more productive, working harder and longer and in general just getting more stuff done. MacLeod's view is that there are four main tenets that companies need to live by in order to turn on organisational engagement.
• The engaged organisation needs a well-defined strategic direction. The culture needs to know where it's been and where it's going and that message needs to be well articulated to all employees. They need to feel comfortable with the direction and their part in that journey.
• Management at all levels, from C-suite to front line need a clear delineation of individuals scope of work, expectations, and what a position encompasses including possible areas of ambiguity. MacLeod mentions it's sometimes helpful if the description is a little “fuzzy around the edges”, prompting areas of potential employee stretching and growth.
• Individual voice, employees need to be able to disagree, and feel it's OK to have a differing opinion, a certain level of grit and adverse viewpoint is necessary and healthy for organisational maturity enabling decision making skill accumulation.
• Organisation integrity, the ability of the management team to imbue its organisation with a coat of honesty.
The last point may be the most telling. Organisations that have done internal surveys concerning such issues as trust and honesty report a distinct correlation between open and honest corporate cultures and employee engagement. Most anecdotal evidence I've come across suggests such a relationship not only exists but that it makes sense. After all we become vulnerable to those we choose to trust in our private lives why would we change that behaviour at work? Rob Markey, Author of The Ultimate Question 2.0 describes the difference between employees that just “show up” and the ones that are plugged in or shine referring to the distinction as advocacy:
[Engaged employees] “have a physically and emotionally safe work environment, are given good training, and are being valued and compensated fairly,… [but] true engagement requires advocacy, and what earns advocacy is the ability to achieve extraordinary things against a purpose with meaning, an objective; the ability to work in a team that you trust and like and you'd do anything for and that would do anything for you; and the opportunity to learn more and grow in the role.”
Markey's advocacy is a true foreshadower of the future of organisational engagement thinking. I refer to advocacy as level 2 organisational engagement. It's the next logical step in crafting a winning formula for business. In part two of this series the discussion will turn toward what leaders must do to push the flow of engagement out to all areas of their organisation and how to capture that elusive engagement culture most believe exists in the world's most successful companies.
Andre Labonte is a guest lecturer at Bermuda College for the ILM certification in Leading Innovation and Change Management. He is also a member of the Association of Change Management Professionals