What Happened to Us?

Almost 250 years ago the United States was founded in large part on the basis of two principles:
· The right of personal property; the ability through your own efforts and sweat to own property and build your own future.
· The right of personal competency; the right and responsibility for each person to develop their skill sets and to plan and execute their own future.
These concepts were radical in view of the feudalism that had ruled most of even the “civilized” world. Your destiny was defined not on who and where you were born, but rather what you chose to do with it.
In my white paper, A Social Contract for the New Millennium, I talked about how I feel that concepts like scientific management, pure capitalism, a move from an agrarian to an industrial society and other factors contributed to the degradation of these principles, but what I see lately troubles me even more.
In the 1940’s people like Deming talked about new approaches to total quality management, which interestingly enough began being referred to as Japanese management techniques. Immediately following World War Two the United States was the undisputed industrial power in the world. I will even go further and say that it was our industrial capacity that played a huge role in the defeat of the Axis as well as our military successes. We were the place that everyone came to study business and the home on entrepreneurialism. The productivity of American workers was some of the highest in the world.
I have heard the arguments that it was the unions and government socialism starting with FDR and followed up with other Democratic administrations that gutted it, but I don’t buy it.
Let’s look at some pretty unpleasant realities facing us right now:
· A study in the Journal of Business Strategy estimated employee turnover costs the U.S. economy $5 trillion annually.
· Another study by the American Health association says we lose $200 billion to “presenteeism, a phenomenon where people “show up”, but contribute at a marginal level because of their own or family health care issues, economic insecurity, or just plain dissatisfaction with their job.
· A 2008 Gallup Consulting study estimates the U.S economy as operating at a 30% rate of efficiency because of lack of employee “engagement”.
· A Conference Board study on employee satisfaction released last week reflects that 55% of Americans are dissatisfied at work and if you look at the under 25 demographic it grows to 64%!
· We have a second class health care delivery system.
I realize that the stock market is moving back up and that Wall Street is about to announce record bonuses, but these numbers scare the hell out of me. We are talking about things like a “jobless recovery” and while Wall Street has profited they aren’t sharing the wealth. What happened to the ingenuity and tenacity that put us at the top of the world’s economies?
There are a number of factors that contribute to where we are including:
· Globalization, if you haven’t gotten the email it is here to stay.
· A lack of solid leadership. Leadership is still defined in most organizations as a “nice to have” or an HR initiative rather than a strategic focus. In my opinion what is being taught in our top graduate schools is management, not leadership. They are related, but they are different.
· A lack of alignment. We are not aligning people’s contributions with business goals and objectives. That’s why we are at a 30% efficiency rate.
· Lack of a cogent customer service model. Most organizations have old fashioned customer service models; they aren’t engaging their customers anymore than they are engaging their employees. Anybody who experienced air travel recently can give me an amen to that.
· Changing expectations. In this regard I mean customers, employees, communities, etc.
The interesting thing is that if you look at the factors I have posited is how many of them come down to relationships and trust. A survey by Punk Rock HR gives a brief summary for the biggest reasons for the “newer generations” dissatisfaction:
· We read about 8 figure bonuses for executives and you want us to accept 3% salary increases as “market”.
· You told us (and our parents) that you would provide us with employer sponsored quality health care.
· You changed our retirement plans and tied them to the stock market so we could do “better”.
· You told us that moving the manufacturing base to Southeast Asia, China, and India was good for “business” and that we would create a “knowledge based” economy.
· Your response to the recession and 10% unemployment is that those of us who remain employed should be “grateful”.
I don’t know about you, but I can kind of see their point.
Maybe I am being overly simplistic, but doesn’t it seem like much of these issues are directly correlated to the relationship between employer and employed? I have thought so for thirty years! That is why I developed my model Moving from Compliance to Commitment. I have spent years refining and testing it. My premise is that when you give employees a chance to “join up” with you they will contribute at a higher level.
Turns out I was right. A Gallup Consulting study from 2008 showed that among other positive results companies with high engagement demonstrate:
· A turnover rate 51% lower than peer groups
· 27% lower absenteeism
· A per capita productivity rate 18% higher and
· 12% higher profitability
A different study from Rhoads and Whitlark and BlessingWhite drew the same conclusions. In fact they showed shareholder returns 13% higher and the productivity and profitability impacts of increasing engagement in environments like retail is nothing short of astounding.
Global research organization ISR’s research director, Patrick Kulesa, put it even more clearly-
“Our research continues to show that a well substantiated relationship exists between employee engagement- the extent to which employees are committed, believe in the value of the company, feel pride in working for their employer, and are motivated to go the extra mile- and business results”.
Now let me tell you what really bothers me. Less than 30% of U.S. businesses have any kind of a strategy for addressing these issues. To the best of my knowledge there is not a single government led initiative exploring it either. I read about a government initiative recently- in the U.K.!
It kind of reminds me of the early days of the total quality movement. Even though it was pioneered in the U.S. we largely ignored it because we didn’t find the need compelling. It was only when our products like automobiles, electronics, and others began to suffer did we look at root causes. We just gave big banking a trillion dollars and the average American isn’t seeing much benefit. Are we seeing a trend here?
The other issue for me is that this is not a “technical issue”. While I have a lot of respect for my colleagues who have black belts in Six Sigma issues like trust and respect are not going to be solved by “process improvements”. For those of us who see ourselves in leadership and management and the fields of organizational development and human resources management this represents a crisis and an opportunity to provide real leadership.
So let’s do a quick review. We have 10% unemployment, historically high employee dissatisfaction, and an underfunded second class health care system. We lose $5 trillion to turnover and another $200 billion to “presenteeism”. Maybe I am just confused, but am I the only person seeing some opportunities here? So what is it exactly we are waiting for…?

It Takes A Village

I had a chance to read several different articles recently that at least to me reinforced something I have always intuitively believed, collaboration is more powerful than individual excellence in an organizational setting.

In many of the presentations that I do I use the illustration of the Nigerian soccer team in the Olympics a few years back. The team was composed of a group of people who were committed to the game and committed to each other. There were no "superstars" that would be recognized internationally. The interesting thing is that this group of committed individuals went on to defeat the "best" teams in the world and win the gold medal.

I think many cultures, at least western ones love the concept of the hero or all star. The individual who will ensure victory. The interesting thing is that these are usually individual contributors. I differentiate these individual contributors, even "superstars" from leaders. I think it is two different skill sets.

Jeffrey Pfeffer of Stanford is one of my favorite organizational development "gurus". He has written a short article on BNET about so called "stars" in the financial industry and the practice of large players to recruit such "stars" and pay them fabulous sums of money. He decided to do some research on the ROI of such investments. He found they typically fell flat, the "stars" performance rarely approached their previous performance much less exceeded it. He points out similar correlations in professional sports. A great recent example is soccer star David Beckham. The LA franchise that acquired him has yet to see the benefits of the dollars they invested in winning matches. They have seen gate receipts go up because fans will pay to see him play.

Pfeffer points out that it would seem that environment and coaching play a huge role in performance. Having supportive colleagues, access to resources, and good management and coaching seem to matter quite a lot. I think Malcolm Gladwell makes a similar point in Outliers, people who excelled had great innate ability, but they also had access to resources and a highly supportive environment.

The other interview clip I saw on BNET included industry leaders including the VP of Innovation for Google. She was asked about the impact of the recession and other factors leading to innovation or the lack there of. Interestingly she posited that once again the key differential in high performing companies is the human capital and creating and nurturing an environment that allows them to contribute. Pretty interesting coming from a technology firm. She also pointed out that many great companies had their genesis in recessionary times, the people at the firms collectively rose to the challenge and innovated and over came the obstacles.

As a student and advocate of engagement I am a big believer in this model. Statistics show that organizations with high engagement increase per capita 21% higher than their peers and outperform their peers and competitors on every critical metric. The key is that this is collective performance and per capita. The approach is collaborative rather than reliant upon "superstars".

In my previous post Dr. Dolan of the University of Michigan talks about a key attribute of leadership being the creation of an environment that attracts talent and its development. The role of the leader is to attract and develop, not to "perform" tasks as an individual.

So where am I going with this? I am not suggesting that you discard efforts to hire the "best and the brightest", but rather than suggesting that you not rely on hiring somebody else's superstar to increase your organizational performance as an exclusive strategy. Creating engagement and raising the collective talents and performance of your organization would seem to be a much more effective long term strategy.

Leadership should be evaluated in terms of their ability to build and create strong teams and develop talent rather than on the basis of individual accomplishments and talents. Being an excellent "coach" is more valuable than being the best "player" for those we put in management and leadership roles.

Just something to think about....

Tipping Your Sacred Cows

I had a chance to do some reading from three different sources this week and all three in their own way examined some "sacred cows". Sacred Cows are those written or unwritten things that we just won't consider changing or even discuss changing.

One of my colleagues and mentors, Ty Warren of Savium, wrote a great book he titled White Hat Leadership. While it is a great book and I recommend you read it all, I especially liked Ty's discussion of two different personality and leadership styles: Explorers and Mappers. The concept of the explorer is pretty self explanatory. These are the idea people, the people who defy convention with charisma and the "big" ideas.

People like Steve Jobs and Bill Gates would probably be described as explorers.

Mappers on the other hand are those individuals who follow the map or implement the direction. They are the stabilizers.

In my experience few people want to be a mapper. We have almost defined leadership and explorer to be the same. Ty and I disagree with that premise. Both of us, he in his book White Hat Leadership and I in mine Managing Whole People, talk about the concept of transition. By that we believe that particular leadership styles and competencies are not only valuable, but critical depending on where the organization is in its life cycle and operating environment. We also talk about how while we adore the concept of explorers most of our succession models are based on Mapping. Look at how many of our CEOs are drawn from finance or engineering. Those are mapping disciplines! I was a practicing HR executive for years. HR practitioners worship concepts like consistency like a sacred trust. Sounds like mapping to me!

I want to make two points here; first, I am not advocating that only explorers should lead. In fact to the contrary explorers become restless and impatient. In many cases their role should be transitional.

My second point may seem contrary. We are in one of the worst economic declines we have ever experienced. Doing what we have always done contributed to getting us here. Do we want to count on that to get us out? This may be the season for explorers.


My second reading came from some articles on BNET. The first one dealt with re engineering management. The authors suggested five ideas to consider:

• Management's work should serve a higher purpose. Oh my, management should actually look beyond the bottom line and market share! They go so far as to say it should concern itself with achieving socially significant goals. Could they be talking about health care, education, homelessness, and other related things?


• Reconstruct the philosophical foundation. These gentlemen suggest that executives broaden their parameters to include theories and models as diverse as theology, philosophy, anthropology and others- not just business concepts. My son shared with me some of the writings of John O'Neil, who works with executives and suggests that many of our corporate leaders have lost their balance and sense of fulfillment because they don't allow time for family, social responsibility, and related activities. They have lost their essence.


• Redefine leadership and its product. They suggest that rather than being heroic decision makers exclusively (can you say explorers), that leaders should be societal architects who foster and model collaboration, innovation, and participation.


• De structure the organization. In this context they talk about small, malleable units. Large centralized structures inhibit shared, efficient decision making.


• Empower the renegades. We need to empower the employees who are passionately committed to our values and mission. They describe it as emotional equity, I refer to it as commitment or engagement. Recent studies that I have talked about in my articles The Business Case for Compliance to Commitment and The Spillover Effect describe the economic and productivity benefits of instituting these practices far beyond their philosophical or intrinsic value.

My last reading debates the merits of yet another management "sacred cow", Best Practices. The author cautions us not to leap to the conclusion that practices and models used by large, big names firms are applicable for us "regular" guys. He even takes a poke at my profession; consulting, and how many big name firms make their living schlepping these models from client to client. His point is to be sure that model or practice works for you! He suggests you examine some basic concepts and constructs:

• Timing and market conditions. Is the environment the same as it was when the "best practice" was created? He uses the example of mass media advertising to create brand. With cable, the Internet, and social networking has mass advertising become spam?


• Different Rules. If you are a well established "brand" major deviation from that brand position can cause you to alienate your core market and not capture new share.


• Differentiation is key. Unless you are ubiquitous why would people choose you over a competitor? If all your "best practices" were invented by them unless you offer a significant cost or location advantage why should people buy from you.

His point and mine is not to learn from the best, it is don't just plug it in. It needs to be tuned to your culture. I tell clients a lot; I have a model, but the implementation of that model is different for each client. It is tailored to their culture and norms. I go so far as to reject clients because they are looking for a "plug in"!

I have focused my career on creating engaged environments. The good news is that organizations that develop, implement, and maintain engaged cultures outperform their peers in every segment across a broad variety of metrics. The bad news is that engagement is a culture and a system. It takes time and energy to create and commitment to maintain!

We are in a time and place where I think we may want must recognize that many of the conventional wisdoms, (sacred cows), are going to have to be re-examined. Maybe it is time for a big ole Texas style barbecue? I heard once that sacred cows make the best hamburgers! What do you think?