I was thrilled to be at the 2011 All TEC Day in Auckland last Friday, where I got to hear my old buddy, Marcus Child, deliver an electric presentation on Leading an Engaged Culture. As far as I was concerned, he was preaching to the choir, but on reflection, I suspect that for many organisations and leaders, the case is still not yet made for attending to employee engagement in any conscious manner. In fact, I would say that in some quarters, there is downright cynicism or hopelessness as to whether anything can actually be done about boosting engagement or even if it’s worth it. Statistics around workplace engagement still paint a gloomy picture. Marcus quoted figures that showed something like only 20% of staff in US, UK and Australian organisations are fully engaged at work: these are the ones who go the extra mile, who are dedicated and committed and are generally happy in their work. They actually tell people they love where they work and what they do. They feel that they are making a valued contribution on the organisation’s journey and they happily bring their creativity and energy to work. Imagine that! Approximately 60% are not engaged, meaning that they generally ‘go through the motions’, but do not display a strong commitment or verve for their work and organisation. The other 20% are actively disengaged. This means that these people are actively bad-mouthing their workplaces. I would stick my neck out to say that these figures are probably accurate for most other countries.
If you are reading this blog, I would guess that you are already supportive of the notion that engagement is a real issue for leaders, but in case you are not, I would suggest you have a look at this study done in 2009 by David MacLeod and Nita Clarke for the UK government. Will Hutton, Executive Vice Chair of the Work Foundation is quoted in this study as saying, “We think of organisations as a network of transactions. They are of course also a social network. Ignoring the people dimension, treating people as simply cogs in the machine, results in the full contribution they can make being lost.” In their global survey of over 650,000 employees in over 50 companies, Tower Perrins-ISR10 compared the financial performance of organisations with a highly-engaged workforce to their peers with a less-engaged workforce, over a 12 month period. The results indicated a significant difference in bottom-line results in companies with highly-engaged employees when compared with companies with low levels of employee engagement. In fact, it showed a 52% gap in performance improvement in operating income over the year between companies with highly-engaged employees versus companies whose employees had low engagement scores.
If that 52% gap was not a compelling enough indicator of the importance of employee engagement, the report goes on to state that engaged employees are happier in themselves; the psychological benefits of working somewhere that you feel you are contributing and are valued cannot be understated. Of course, engagement also affects staff turnover and employee sick-days, which are costs to any organisation. Customer satisfaction is also impacted: PricewaterhouseCoopers, who use staff and customer engagement levels as one of their four Key Performance Indicators have found a strong correlation between highly engaged staff and client satisfaction.
So what is to be done about engagement? According to MacLeod and Clarke, the “joint and consequential failure of leadership and management is the main cause of poor employee engagement”. Leadership again. Surprise, surprise. If those who lead the organisation really want to harness the full potential of staff, they must lead a culture shift where genuine effort is expended to get their staff on board. However, as Philip Whitely of the Human Capital Forum is quoted, what is required is “a Copernican shift, ditching the centuries old dominance of accountancy as the way of understanding the organisation.” Yet again, a mechanistic approach is not what will do the trick.
It’s a systemic shift in organisations that will increase engagement. Think bigger about it. Address engagement properly or don’t do it at all. ‘Tinkering around the edges’ with a little manipulative window dressing will be seen for what it is and will generate greater cynicism. An approach which looks at shifting the whole culture of the organisation will be much more effective and sustainable in the long-run. Such a genuine, systems approach will catalyse employees to give the extra effort willingly. Sparking greater engagement is not about making short-term gains or implementing quick fixes; it is about unlocking trust and commitment so that people bring more of their innovativeness, energy and creativity to their work. There is no short cut to any place that is worth getting to.
According to MacLeod and Clarke, there are four key enablers to engagement:
Leadership: Leaders must provide a compelling story and vision that is at the heart of employee engagement. Haven’t got such a vision? Do the work and get one. What does your organisation stand for, where is it going, how is it going to get there and most importantly, how is every person in the organisation going to contribute to this? Every employee must have a clear line of sight between what they do in their day-to-day and the vision.
Engaging managers: People join organisations but leave managers. Far too many organisations employ ‘amateur managers’, those who have been promoted because they were good at the last job they had, probably meaning they were good at the technical aspects of the work, and not necessarily qualified or developed with a set of attitudes and behaviours to manage people effectively. Managers who engage their staff set out clear expectations to their people, provide feedback on how people are doing (and this includes both corrective AND positive feedback) and are available to provide coaching assistance for when their people need or want guidance. Managers who know how to engage really know their people and their behaviours. They also are consistent, living examples of organisational values. Managers who are seen to manage poor performance and who treat people fairly and as individuals drive staff engagement. It is important to remember that there is no quick fix; it requires long term vision and investment in developing these managers so that the culture shifts to one of good management practice.
Voice: Listen and listen well. Many organisations have developed channels to listen to their customers and clients, but staff are often overlooked. Richard Baker, Non-executive Chairman of Virgin Active (and former CEO of Alliance Boots) is quoted in the MacLeod/Clarke report as saying, “Employee morale is the first step to productivity improvements. Give your people a damn good listening to, and act on what you learn.” That last bit is vital: act on what you learn. If you set up channels to hear what is going on for your staff and they don’t notice anything changing, it will be yet another bit of shoddy window dressing. Knowing that you are genuinely listened to bolsters a belief that your contribution is truly valued and increases the likelihood you will keep on contributing.
Integrity: When staff see their leaders living the values of the organisation, this engenders trust. Trust engenders commitment. Most organisations these days have a set of values, but when the gap between these values and day-to-day behaviours is large, cynicism and mistrust reign. Take a cold hard look at leader behaviours and address incongruence. Is your values statement truly lived or simply laminated and stuck on some ignored pin-board in the staff lunchroom? Every action and non-action on the part of the leaders will be seen in light of your values statement. Is your leadership culture one of ‘do as I say, not as I do’? If so, it’s probably worth investing in shifting the culture to one of truthfulness and alignment because you can’t fake it. The cost in lost staff engagement (and therefore productivity) is too high.
Shifting a culture to one where staff engagement sits right at the heart of strategy will involve behavioural and cultural change which takes time and effort. If there was ever a time to do this, it is now. While it is tempting to search for quick fixes during economic hard times, this does not sit comfortably with the amount of energy and attention required to create a culture shift; however the costs of paying one-dimensional lip-service to the issue are far greater than the investment in a sustainable change. Employee engagement approaches can be of significant benefit as organisations deal with the challenges of recession. When you establish trust, you can unlock more of the knowledge, creativity and commitment of individual employees, thereby driving up innovation and productivity.