The Green Flash

The "green flash" is the way that they refer to the last second as the sunset fades into the Caribbean. As I happen to find myself in Grenada, and the bar at my accomodations is aptly nameed the Green Flash Lounge I thought this would be a good title for my post on a couple of points.

I got the opportunity to present two management and leadership programs down here for a group representing a cross section of leadership staff ranging from front line leaders to senior managers. It has been a very interesting experience on a number of levels including both cultural from an ethnocentric standpoint and from the challenges and issues facing their business.

The client is in some ways a monopoly- they have essentially no competition on the island. What speaks to their receptiveness and their vision is even under those circumstances they are very passionate about improving their level of performance both internally and externally. They are engaged.

It has been a personal growth opportunity for me- to explore and try to understand the nuances of both their corporate and personal cultures and convey concepts that are important to them without presenting our North American practices as "truths", but rather concepts to explore.

I have not found them to be at all naive nor awestruck. They challenge, but do so politely and constructively. They participate with a real desire to gain understanding and appreciation, but retain pride in what they have accomplished to date and what their plans are for the future.

Wherever this assignment takes me I have to tell you that I will leave here with much more than I brought with me. I hope I get invited back, I still have much to learn.....

The Ethics of "Poaching"

I read an interesting article this morning about the ethics of poaching; not hunting animals out of season, but rather the idea of specifically recruiting or targeting key talent that works for another organization typically a competitor.

I have to tell you that my initial reaction was "what"? As the article went on it did differentiate between specifically targeting an organization with the intention of undermining them through recruitment of their key talent or recruiting with the intent of obtaining trade secrets or proprietary information, but short of that indicated it was ok. Thanks for permission.

It kind of takes to thinking that our lexicon has gotten to the place where we really have started to believe phrases like human capital. One small problem, our employees don't "belong" to us. We "rent" their knowledge, skills, and behaviors and for a period of time if we are skilled and lucky we create a bond of mutual loyalty because of respect and commitment, period.

I think the timing is especially interesting now that it looks like the economy may be picking up. I see a lot of questions out there from organizations about what they should be doing about retention in the face of a more robust economy. I advise prayer. I am only being semi sarcastic. I am stunned by organizations who do not make investments in engaging and retaining employees on an ongoing basis and then want to install a program to fix it when there are issues.

Employment at will is a concept that most employers will defend with the ferocity of Charlton Heston over the right to keep and bear arms- as long as it is balanced in their favor. They don't like it when employees see themselves as free agents.

I hear a lot about loyalty as well. I define loyalty pretty simply. We interact with trust and respect. We meet our commitments to each other and we take into consideration our actions on the impact of the others in the organization when making decisions, period. Out in the Wild West where I grew up we called it "riding for the brand". While I was sleeping in your bunkhouse and eating your food I was present, you got my honest effort. There were no life contracts or pledges of fealty.

I guess I am a career poacher. When I see people who are really good at their jobs and whose skills might be transferable to an organization I work with or for I feel comfortable bringing to their attention that if they are interested in exploring options I would like to talk with them.

As you know I am a huge believer in the concept of engagement. I guess my model is the best way to keep your employees from being "poached" is to create an environment where they don't actively seek or entertain other options because of the relationship of mutual respect and trust you have created. If my employees find another opportunity that they feel meets their needs or provides them with a chance to expand a skill base I wish them well if it is the right opportunity. You see I have found ex employees to be one of my best sources of future employees, if I treated them well they remember it and share it with their friends and associates.

So I guess with the exceptions of targeting or attempting to take trade secrets we need to acknowledge there is no such thing as poaching. Mr. Lincoln freed the slaves well over 100 years ago, people can't "steal" something from us we never owned in the first place.....

The "First" Engagement Initiative

Those of you who know me know that engagement, true engagement is an area or opportunity that I feel pretty strongly about (sorry Laurie). I think the emphasis is on true engagement. Engagement in my mind is defined as voluntary or discretionary effort that employees bring to their job everyday. True engagement is when that phenomenon spreads to your suppliers, your customers, and your community.

True engagement is accomplished using a number of tactics and strategies, but it is not a "program", it is a culture that lives everywhere not in HR. You don't accomplish it with pep rallies and reward and recognition programs by themselves. You build the culture and then you live it.

Another area that has intrigued me for a while and is taking on new dimensions in light of the health care debate is the relationship between personal competency and engagement. Personal competency is the stepchild key principle that was embedded into the original constitution, kind of a neglected cousin to personal property. Personal competency was the idea that each of us had the right and responsibility to manage our own futures, that we were not bound by our heritage or lineage. The key is the balance between right and responsibility. In a way doesn't that sound more like a partnership than a hierarchy? Doesn't that kind of sound like engagement in a way?

I have talked about personal competency at length and how to great extent with the coming of the Industrial Revolution a variety of forces combined so that we exchanged our personal competency for a kind of "corporate feudalism", we gave up our "equality" for security like corporate or organizational pension plans, health care benefits, etc. The industrialists were all about this model. Dumbing down skill sets and creating structures based on "compliance" is easier, in the short term. Our Founding Fathers were not real big on the concept of corporations, but that is another story.

When I look at our current situation as it relates to health care I see similar potential issues related to personal competency. I want to go on record as saying that I believe access to basic health care is a right that everyone should have access to, and I do mean everyone. The fact that we have one of the most advanced and expensive health care systems in the world and our morbidity and mortality rates put as at like number 30 is embarrassing to me (think countries like Cuba and Costa Rica). I also believe that access to basic care is good business and good for the overall economy. We are spending upwards of 10% of our GNP on health care on our "stellar" results and the number is getting bigger, not smaller. A big part of that is that people without access to preventative care get their care in ERs, the least efficient and most expensive way to provide it. Since they can't pay for it the costs get passed along to those who can pay, kind of like shrinkage in retail.

Here is another data point for you to consider. According to the American Medical Association sixty percent of health issues (and therefore costs) are related to lifestyle rather than hereditary. In plain terms that means we cause it! The issue is also that if I have not;

• Participated meaningfully in paying for the costs of care for me and my dependents
• Been provided with any meaningful information about what I or my dependents can do to improve my health or reduce expenses
• Been incentivized to change my behavior
• Been educated on the impact of escalating health care expenditures on other parts of the business

then the chances I am "invested" in making changes to my behavior are pretty minimal. No personal competence or engagement here folks!

As a former HR executive I can also tell you that most organizations strategy to deal with the rising costs of benefits is to;

1. Cost shift to employees through higher deductibles, co pays, etc
2. Reduce benefit offerings
3. Eliminate categories of employees from coverage

Is it just me or do these methods seem to miss the root causes as well?

I am not going to belabor that point and make this about health care.

I guess my point is that maybe just maybe the Founding Fathers intended personal competency to be the first real engagement initiative. My personal engagement model is based on five elements:

• Respect
• Responsibility
• Information
• Equitable rewards
• Mutual loyalty

Is it just me, or do there seem to be some parallels between that and personal competency? Maybe personal competency and true engagement are both about doing things with rather than to people ?

Were the Founding Fathers really that visionary, I wonder......?

I Hope You Dance

Sometimes when I need to clear my head I like to get in my car and go for a drive. Somewhere off the beaten track in the country or along the coast. When I do that I like to listen to music. I have absolutely no talent in that arena. I can't write music, play an instrument, or sing a note; but boy I appreciate good music. It tells a story.

As I was driving yesterday I had a chance to listen again to one of my favorite tunes I Hope You Dance by country star Leanne Womack. The setting of the song is a mother singing to her very young children about the things they will face and the choices they will encounter and her wish that "if you get the chance to sit it out or dance, I hope you dance." In the song she explores things like falling in love, staying true to your principles, and recognizing your relative place in the universe.

I think this is some of what people like Daniel Pink are referring to when they talk about flow, or when Seth Godin talks about each of pursuing our art. Flow as I have discussed previously is that spectacular place where our destination is clear, the balance between effort and result is in harmony and we have the autonomy to pursue of our own volition. I wonder if it was also this goal that the Founding Fathers meant when they talked about "the pursuit of happiness" and the concept of personal competency; that balance of the right and responsibility to be competent and self reliant.

As Ms. Rimes sings there is no guarantee built into this pursuit, it is the right and the decision to pursue the journey that is important.

I have to say when I read statistics that say that 55% of Americans are dissatisfied in their jobs, only 30% describe themselves as engaged, and we are spending $5 trillion on turnover and another $200 billion on "presenteeism" it doesn't sound like too many people are "dancing".

I wonder if creating engaged environments is a way to let people "dance"? I keep reading that clear expectations, respect, fairness and equity, and shared values are the keys to engagement and productivity. Is it just me or does this kind of sound like the "dancing" that both Leanne and the Founding Fathers had in mind?

What if those of us who build organizations or lead them built the opportunity to "dance" into our models? You know things like clear expectations, balanced feedback, autonomy, respect, and connection to something larger.

It seems to me that the Industrial Revolution, Frederick Taylor, and the Calvinist work ethic don't leave much room for "dancing". I think it is also okay for "dancing" to include work. Although I have seen dancers of all kinds demonstrate sprezzatura I recognize the practice and hard work that went into achieving that level of performance. It isn't for the faint hearted.

Maybe I have stretched my metaphors too broadly, but I have decided to heed Leanne's advice and look for my opportunities to "dance" and to encourage others to "dance" as well.

So I guess my wish for all of you is that "if you get the choice to sit it out or dance, I hope you dance"........

Do Try This At Home!

I know for years we have encouraged people to think global and act local, but I want to explore a different paradigm with you.

As you know I am extremely passionate about the concept of creating engaged environments and strong employment brands. Often what I hear from people is " that's great Mark, but I am a small business with a small work force and small budget". The other thing I hear is "how"?

I came across a couple of pieces earlier this week that I thought were nothing short of brilliant in explaining both why and how this is relevant to small business.

Paul Mitchell, the brilliant Australian social scientist www.thehumanenterprise.com.au, shared some things that both resonated with me and were immediately applicable to businesses without regard to their size.

• The first thing that Mitchell did was describe leadership in a simple, but very compelling way. A leader excites their followers to exceptional performance. This definition is especially relevant because performance and effort are what engagement is ultimately about. Not happiness, not "satisfaction", but performance. Those others factors maybe contributors, but at the end of the day we need results.

The next thing that Mitchell talked about were the four key elements that every business should build into their "value proposition":

• Great leaders focus on followers. Mitchell and I share the belief that relationships are the "glue" in organizations. Truly effective leaders do things with people, not to people. With their employees, with their customers, with their suppliers, with their community.
• Build a sense of community. Following that same theme leaders understand they are part of a community and they invest in it. They build and nurture relationships on a foundation of trust and respect. They exchange value and values not transactions.
• Be yourself, but with more skill. Mitchell calls this authenticity. Everyone has allowable weaknesses, his point is to focus on your strengths and core competencies. Seek out other relationships internally and externally that complement your skill sets and offering.
• Focus on what matters. Mitchell suggests that we look for significance in ourselves and others. Find what you and others do right and celebrate it whether they are an employee, a customer, a neighbor, or a stranger. Connect them to the larger community and the larger context. We are a village, not an island.
• Build the excitement. There is an old amusing expression "if you are excited, you might want to let your face know". This speaks precisely to Mitchell's earlier definition of leadership. Be excited and share excitement. If you are not excited and don't believe in "you", how can you expect others to?

Added to this wisdom from over the "pond" I had a chance to see some results from the national survey and initiative on engagement from the U.K. that showed similar things. The country wide study found that there are four elements that build and sustain the engaged environment:

• Listening
• Treatment
• Coaching
• Role and role modeling

Once again it comes down to relationship. Listening and treatment speaks to my guiding principle of respect. Coaching and role speak to the principle of the big picture and autonomy. Role modeling speaks to authenticity and values. The British study also found that when leadership commits to these behaviors they become "viral", they spread through the organization both formally and informally.

By the way they did examine compensation as well and what they found was again consistent. Money may initially attract, but the most important qualities of compensation are perceived equity and fairness. So the short story is if you do compensation well it is a break even, it won't detract from engagement. If you do it badly it will destroy your foundation. Once again we see the tie back to relationship that once we get past survival mode it is about fairness and equity, not dollars.

So when you think about building and reinforcing your brand, be sure you include these elements. The interesting thing is you don't need a big budget or large staff and yes, you can do this at home......

"Lost" Opportunity

It is interesting to have the historic vote on health care in the background as I muse about this. Many opponents of the model being proposed by the Administration talk about the trillion dollars it will cost to fund the program. As a counterpoint I look at the following situation:

My readings and research tell me that we "lose" $5 trillion annually to the direct costs of employee turnover. Additional research indicates that we lose another $200 billion annually to "presenteeism"; the spending on health benefits related to stress, lost productivity due to employees dealing with personal issues at work, and the difference between contributions from employees operating at full versus marginal productivity. I saw research recently that said in addition to those costs we send over $100 billion annually on training and development in corporate America and yet less than 10% of those dollars result in meaningful and sustained change.

My math has never been my strength, but it would seem that the "lost" opportunity that these costs represent approaches five and a half trillion dollars in the U.S. economy annually. So if we addressed some of these we could pay for health care five times over and have money left over to address other critical issues like maybe education, homeless folks, and other similar societal issues. So what am I missing?

Our current economic system has retreated in a way to a kind of capitalistic feudalism. The industrial revolution was largely based on "dumbing down" tasks and activities to make them simpler and therefore more "efficient". The skills required to perform these tasks decreased and correspondingly so did the wages. Technology provide even further assistance, machines and "systems" can do what people used to do cheaper, faster, and many times more efficiently. In exchange for "compliance" we offered employees a certain degree of economic security. Then a world economy happened. Other economies began using "our" systems combined with their own enhancements and lower wages and we lost our competitive advantage. Our solution in many cases was outsourcing to these economies. At the root we forgot to include people in our "solutions", and now we are paying for it.

Research about engagement demonstrates that the U.S. economy is operating at about 30% of its potential efficiency. Before other economies gloat too much I would point out that this puts us in the top quartile.

Organizations that have a well developed engagement strategy enjoy significant advantages in productivity, profitability, and sustainability. Those terms sound pretty capitalistic to me.

Engagement is not measured exclusively by employee "satisfaction" or tenure. It is not a short term strategy or for the faint hearted. It also requires to examine and rebuild our relationships between: employer and employed, "vendor" and customer, and organization and community. We need to examine how we hire, how we train, how we reward, how we communicate, and most importantly how we relate to and value one another. The upside is that properly executed we can recapture some of those trillions and address compelling issues and not spend anymore money.

Is is just me or does that "value proposition" sound interesting? So I would ask again:

• If not now when?
• If not us then who?

Looking forward to your thoughts......

Achieving Spezzatura

I enjoy Seth Godin. He challenges you and conventional wisdom and pushes you to examine your life and expectations.

As I have mentioned previously I recently finished his new book - Linchpins, about the people who are really the most critical in our organizations. Godin argues and I agree that the most important skills in any organization are the skills it takes to bind people together and convert them from a group into a team with a shared vision and goals. He also points out that linchpins don't value compliance very much. They value their "art" and the work. Unfortunately our current system has managed to institutionalize compliance in almost every aspect of our society from education to the world of work. He goes so far as to say the educational system was built to provide an army of compliant serfs to staff our "factories"; factories not just in terms of manufacturing, but computer programming and administrative functions. Anything where standardization and "process" are king.

He also argues that this standardization hurts rather than helps in the long term. When I look at the level of engagement world wide coupled with turnover and job dissatisfaction I am inclined to agree.

Sprezzatura is an Italian word that translates into being able to do your craft without a lot of visible effort- with grace and elan rather than sweating and grunting. It probably causes people with a strong Calvinist ethic to writhe uncomfortably in their chair.

When I watched the women's figure skating competition for the gold medal I think sprezzatura was what I saw exhibited by the young woman from Korea, it was not just that she performed a brilliant routine it was that she was so graceful and elegant you almost forgot how difficult those moves were to accomplish.

My personal goal is to achieve sprezzatura in my work. It has caused me issues in my "corporate life". I have actually had more than one supervisor criticize me because it didn't look like I was working "hard" enough. I asked them if there was an issue with my work or output and they indicated there wasn't, but one actually commented, "I never see you sweat".

I like the idea of organizations and people I work with experiencing sprezzatura, the work is performed and expectations are met , but in such a way that it seems effortless and elegant. It creates an opportunity for engagement not only for those doing the "work", but those enjoying the benefit.

Commitment or engagement is where employees "join up" rather than comply. They come into their organizations and their lives with a connection to both the work and the vision of the organization. They are in congruence. The studies say that this engagement can be correlated to higher results and benefit all key performance indicators. Maybe in some ways these organizations are allowing their employees to enjoy a level of Sprezzatura.

So I would leave you with a couple of thoughts:

• What would sprezzatura look like for you personally?
• Would you rather have your employees work hard, or achieve sprezzatura?

I know what my answers are......

Where Does Engagement "Live"?

I am very pleased to see interest in topics like employee engagement and employment branding gaining some momentum, even if it is just in dialogue.

I have to pay an homage to the people at BlessingWhite for their recent studies and research and Dr's Whitlark and Rhoads for their publication about the "Spillover" effect which provides concrete relationships and data; drawing a direct correlation between high engagement and key performance indicators like sustainability, productivity, and profitability. This is no longer "warm and fuzzy" stuff, but rather hard data.

I do continue to see that for all the dialogue I am still disappointed with the number of organizations and C level executives that are either ignoring this opportunity (some would say crisis) or paying lip service to it.

There are a couple of other things coming out about engagement that I have long believed that I am pleased to see gaining some traction as well:

• Defining engagement. This a a huge area. Engagement is not happiness or employee satisfaction. Much like compensation the lack of happiness or satisfaction can have a negative affect on engagement, but "happy" or "satisfied" employees are not necessarily engaged. The basic reason for that is that the work place may be providing an outlet for social relationships or other things that employees enjoy that affect those areas, but don't lead to additional productivity or discretionary effort. Measuring those other things doesn't necessarily yield engagement.
• Creating engagement. The other thing we are starting to recognize is that engagement is not an initiative or program it is a culture! To create and sustain an engaged workforce and long term employment brand you must create and sustain a culture.

I think that these "revelations" may be part of what is keeping many organizations from embracing an engagement strategy or employment brand- they aren't prepared to do the work.

The last thing I want to share today is my response to the opening question. In my opinion engagement and your brand live at the front line level of your organization. I am not saying that senior management support and role modeling aren't critical, but how many of your customers or employees interact regularly with C level management?

How many of us encounter Howard Schultz when we visit Starbucks or Steve Jobs at the Apple store?

My point is you must build engagement into your brand through your selection, hiring, training, and performance management and reward systems. I would go further and say that your front line managers are your greatest potential asset or weakness. In fact Whitlark and Rhoads are even more specific;

"One bad manager can pollute multiple levels of an organization, and poor managers bring down employee morale, which spills over into the engagement level of customers.”

My point being that your "engagement" or "branding" effort must be embraced as a culture change and you have to be willing to "de-recruit" employees especially managers who can not or will not make the transition. My experience has been validated by James L. Heskett, author of the book The Service-Profit Chain, who writes-

“… the hardest concept is the deployment of the culture change …which requires that organizations identify values, behaviors, and measures that help reinforce the service profit chain relationships. But it also requires actions. That is when managers are not managing by the values and cannot be admonished or retrained to do so (which rarely works), they have to go.”

So I guess what I am saying is that engagement is mutual commitment and while it is important to have brand champions in the C suite you will be most successful when you embed it into the fabric of your organization because engagement and your brand live on the "ground floor" where your employees interact with your customers. As my colleague Joseph Skursky so elegantly states, Hire Hard- Manage Easy. You will find it a better long term strategy.

Building a Better "Mousetrap"

I am kind of excited. I am in the process of pulling together a group of collaborators to talk about the importance of building a strong employment brand and engagement.

I am excited on a couple of levels. Anyone that knows me knows that I am passionate about these subjects to a level where folks get tired of hearing me. I can't help it, I just fervently believe that this kind of a model working together is just bluntly superior to any other organizational model in the long term, and it works for all kinds of organizations; private or public sector and for profit or not for profit.

I am also excited about the opportunity to educate people about what engagement is and engagement is not. Engagement is not satisfaction and engagement is not "happiness". Engagement is discretionary effort freely committed to by employees in support of a common set of goals, values, and objectives. It is also viral. Your customers and your community will "catch it" to if it is done right.

The last reason I am kind of excited is that this initiative as we envision is a collaboration between the local educational community, the business community and others to begin building a framework for an economic plan for a community that has desperately needed one for a long time; and we are planning to do it together.

We are also going to explore root causes and the real foundation of engagement and strong brands and show local businesses two key things:

• This isn't just about big businesses with big advertising budgets
• The basic building blocks are pretty easy and there are resources in every community to help "spread the virus".

I like "win-win" solutions, and personal responsibility, and action rather than inaction. Think local, act local. I like it!

When Will We Learn?

I have been following a number of interesting discussions on LinkedIn and other places about the issues surrounding employee recruiting, selection, and retention.

They range from the importance of the process to the idea that since we are in a recession and employees don't have anywhere to go we can focus on other more "important" business issues.

Interesting viewpoint. Studies show we are operating at 30% efficiency, employee job dissatisfaction is at an all time high, and to some it is a non-issue. I suspect they are not on the top 100 places to work list.

Another discussion I am following began to target some of what I believe to be the real issue- in many cases our hiring and selection processes are not well thought out and executed. They are ancillary rather than strategic.

That is the difference between truly high performing companies and those firmly "in the pack". The concepts of employee engagement and employment branding are coming into vogue. The idea that engagement and the resulting discretionary effort are built in to the foundation not added on later. A colleague shared with me "at Nike to work there you must be an athlete". They are clear about the JFHF3HCJD6FE culture and hire with it in mind. Other icons do the same.

If you are a senior executive how much time are you spending making sure that the people who are joining your organization or at least your team have the "right stuff", or like many organizations have you delegated this to your HR department? Here is a tip. Recruitment selection and retention of the best people is a management role, it doesn't "belong" to any one department. Top performing organizations have figured this out. It is a big part of why they are top performing organizations.

So if you are taking the time during this recession to focus on the "important" stuff and ignoring your people strategies it will be interesting to see how it works out for you.....

Opportunity from Chaos

The Conference Board announced that employee satisfaction is at an all time low and several other studies say that based on "dis-engagement" the U.S. economy is operating at about 30% efficiency. Yet another study says that the supply of "experienced" talent is going to decrease while demand increases. So where is the opportunity? Well call me Pollyanna, but I see several areas.

In a recent article Daniel Pink, author of Drive as well as several other great management books, states that loyalty isn't dead it has been redefined. He even provides a whole bunch of ways to build this redefined loyalty into your organization and redefined loyalty can translate to engagement which directly contributes to sustainability, profitability, and productivity.

Although 25% of the workforce will be over 50 by 2020 in North America and Europe and the over 45 customer demographic will be 40% larger than the 20-45 group by 2012 these folks have more money to spend and incidentally research shows that the over 50s have as good or better skills as their younger counterparts. By matching up the customer facing workforce with the demographic shift it represents opportunity rather than loss.

Building engagement requires a strategy, but it is not necessarily cost prohibitive or limited to large, complex organizations. In fact many of the elements of an engagement strategy are pretty simple in their foundations:

• Hire the right people. Think about your organization and your values and the values of your customer base and build it into your hiring and selection processes.
• Create great jobs. Great jobs are not necessarily about compensation. They give people an opportunity to contribute and work in an environment that fits them.
• Participate in helping people build great careers. Loyalty should be based on contribution not tenure. Employees who give you 110% while they work for you are loyal. Employees who speak highly about you to customers and other potential employees are loyal.
• Re-recruit constantly. Smart employers spend a lot of time ensuring that employees understand their personal contribution to the business and where they fit in. Do you really think this is easier in organizations with thousands of employees than it is in smaller organizations?
• Take advantage of local resources. Most of the foundational element of successful engagement come down to relationship skills not technology. I am talking about things like setting expectations properly, giving feedback constructively, recognizing positive results and similar skills. Most of those skills are taught by your local Chamber of Commerce or community college. You don't need an expensive "top tier" consulting firm. Best practices and templates work great for the company who developed them and consulting firms who install them.
• Think local, act local. To a great extent most of us operate in our local community. By engaging and investing in our community we build and reinforce relationships and it relationships that drive organizations not technology or systems by themselves.

In my mind we must decide whether or not we will use the "lessons" from this latest recession as a learning opportunity or concede defeat. I am hoping it will cause us to examine root causes and to redefine how we work with our employees, customers, and communities and they we will capitalize on the benefits of commitment rather than compliance. We have to decide.

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…?

Reinventing Human Resources Departments

Like many of us today I spend my share of time on social media sites like LinkedIn, Digg, Facebook and others.

LinkedIn particularly I find to be a great forum for exchanging ideas, asking and answering questions and just "chatting" with colleagues. One of the things I find disappointing is that I still see frequently on LinkedIn are questions like:

• What sucks the most about your HR department?
• Does your HR department bring any value added to your organization
• How as an HR professional do I generate respect and credibility?

I have been in and around the HR profession for over thirty years and even though I have "progressed" to C level roles both in human resources and operating departments it pains me to hear discussion I heard when I was graduating from college and my advisor pleaded with me not to "waste" my talent in Personnel.

As recently as yesterday I was with a colleague in a related field who lamented that when he attends local SHRM meetings the discussion is mostly defensive or compliance oriented rather than discussing solutions or being proactive.

Human Resources needs to re-define itself and the timing is no more critical than today.

A recent article I read made a statement I agree with whole heartedly and have been preaching for the last 36 months or more:

Employee engagement and retention are emerging as two of the biggest challenges facing business in the next decade!

Because of the economic downturn many C level executives are doing what they have always done during times of economic uncertainty; focusing on the numbers. They assume because of high unemployment that employees are just grateful to be employed or replacement talent is readily available. This is both horribly wrong and short term thinking for a number of reasons:

• Recent studies find employee satisfaction is at one of its lowest points in 50 years!
• The U.S. economy is estimated to be operating at a 30% rate of efficiency with further erosion occurring because of loss of trust stemming from layoffs and economic insecurity.
• Employee turnover is estimated to cost the U.S. economy $5 trillion annually
• The costs of "presenteeism"; employees who are employed, but largely un-engaged is estimated at another $200 billion annually.

That's right, those numbers are trillion with a "t" and billion with a "b". One could conjecture that fixing these issues could fund a national health care initiative and probably go along way to solve funding issues in education, poverty and other areas.

So what can HR professionals and departments do to help address these issues and increase their stature and contribution, I would submit several things:

Change your role

I expected my HR teams to provide three primary services to our internal clients: technical expertise, facilitation, and project management. Our role is to provide the right tools to management to select, motivate, and retain the right staff. They are responsible to learn and use those tools. I don't expect managers to be experts in ERISA or COBRA, but basic competencies like setting expectations, giving feedback, taking corrective action, and linking individual goals to organizational goals are management competencies, not HR competencies.

Develop and implement an employment brand

Engagement starts with the hiring and selection process. Organizations that achieve excellence are clear about their brand internally and externally. Candidates and employees know what the organization stands for in terms of values and vision. They may be flexible about process, but they are ruthless about adherence to those values and principles.

Create a pipeline

Great HR organizations are constantly monitoring their "pipeline" of talent. They are proactive not reactive. If turnover or growth occurs they have strategies in place to quickly identify and deploy the right talent. They don't scramble.

Integrate your systems

I am old enough to remember when the total quality movement was "new". You didn't inspect quality in, you built it in. So many times I see organizations approach their HR initiatives serially; we will work on our recruiting system this year, compensation next year, performance management next year, etc. It doesn't work. These systems must be integrated and more importantly they must link clearly and directly to your business strategy.

Foster and cultivate a culture of innovation

You are either moving forward or you are regressing. Great companies don't follow best practices, they create them. They don't wait for the competition to come up with the next idea, they constantly challenge their own thinking and reinvent themselves. I personally ascribe to that model by doing some of the following:

• Hiring the "right" people
• Creating an optimal environment
• Managing "whole" people
• Moving from compliance to "commitment"

If you want to know why I encourage you to do these things right now, here are my reasons:

• Demand for talent- over the next 15 years the demand for “experienced” talent will increase by 25% and the supply is expected to decrease by 15%!
• Less than 30% of organizations worldwide have an engagement strategy today. Do you want to lead or follow?
• Engaged employees have a turnover rate 51% lower than un-engaged employees and a per capita productivity rate 18% higher.
• I guess my last reason would be that if you are an HR professional aren't you tired of sitting in the cheap seats? This is our time, it is up to us to take it.

Looking Forward ..and Back

This New Year's Eve will be a bit different than many we have celebrated. It is the end of the first decade of the new millennium among other distinctions.

It seems somehow alomost surreal to think that 10 years ago we were in a panic about what Y2K would bring. Kind of turned out to be a non event. 2001 distinguished itself largely because of 9/11 and has changed our lives and shaped foreign policy and the role of government intervention in our lives. 2008 elected the first African American president and 2009 brought the worst financial recession in generations and the effective demise of several major institutions.

It has been an interesting decade for me as well. My children entered "adulthood". I spent the bulk of the decade in a "new" career as an executive in the financial services industry, specifically in credit unions trying to help re-shape our approach and go back to our roots. I can honestly say that some of my greatest career achievements occurred with some of the work I did in those organizations. I feel that in several cases we made things not only better for our employees and "members", but actually contributed to positive social change and bettering the communities we served.

I wrote and published my first book, which was a significant personal milestone and learned to embrace social media. I also began hearing about and writing about a phenomenon called engagement that I had described as moving from compliance to commitment which still represents a personal passion for me. I have to admit that I have been frustrated with my ability to articulate this model in a way that causes more organizations to embrace it. I truly believe it is a far superior model for organizations and their members to interact whether those organizations are businesses, communities, educational institutions or any other entity that brings people together.

It has been a decade of revelation and introspection for me. I have enjoyed some of that much more than other parts. In truth I didn't care much for 2009, I am not sorry to see it go.

Starting on Friday we begin a new decade. I will be curious to see what we do with it and whether or not it provides opportunity and promise or more disappointment.

So I will be curious to hear from you as to what stood out for you in the first decade of the millenium and what you hope to see as we move into 2010.

The Right Fit

A lot of you are probably tired of hearing about my ongoing love affair with the concept of engagement. Sorry I just can't help myself, it's my passion.

In my last post I talked about a couple of people who have made a deep and lasting impression on me even though they were quite different. I still think about those two people and others I have encountered that were similar. These people don't seem to spend a lot of time in that "uncertainty" zone wondering what their role or motivation is or should be. They are aligned.

I read a couple of things today that I found interesting. One was from a colleague who I respect a great deal talking about whether or not organizations should accept or even embrace their role in providing structure in a world confronted with a lot of ambiguity. His question was around social context and whether employers should play a proactive, reactive, or neutral role in creating and/or managing social relationships related to the workplace.

My response, perhaps naively, was that if you embrace a philosophy of engagement a certain amount of this need to "affiliate" will be met organically. If you share values and a sense of commitment with your colleagues the "membership" component will occur somewhat naturally. The employer will need to provide some boundary management and be sure that the approach is broad rather than prescriptive, but shouldn't have to artificially bring people together.
By prescriptive I mean being too structured as to what engagement looks like or must be practiced.

I find organized religion to be a little "prescriptive". Three of the largest religions in the world; Christianity, Judaism, and Islam are all "people of the book", but we fight wars over the "right" way to practice it. I don't really get it.

Another colleague posted a very different question about the relative difficulty of coaching someone from "incompetence to mediocrity" versus "good to great". My reaction was "Why would you want to coach someone to a career pinnacle of mediocrity?" Where is the value to the person or the organization. Perhaps I am being hypocritical, I play golf badly, but I enjoy it as a hobby recognizing that Tiger (even with his current distractions) need never feel threatened. Golf is a hobby, not a career.

If you look at the single biggest reasons for "failure" in the employment environment they are around "fit" not technical competence. The numbers are pretty scary too- exceeding 30% at the C level and even higher at lower levels. How many of us know colleagues who are "living quiet lives of desperation" performing a job where they are not very engaged or frankly a great fit. I feel for these people even though by some measures they are "successful".

Maybe I just continue to be contemplative because of the recent events of my role models. Maybe it is the season. Maybe this "fit" thing is overrated. What do you think?

Wrong Process = Wrong Results

I had an opportunity to read a literature review from last year that drew some pretty interesting conclusions not only for the U.S., but worldwide.
Steven Zaccaro, in his piece, Executive Talent Assessment and Selection: A Literature Review described a five step process.

• Defining executive candidate position requirements (technical skills)
• Delineating appropriate candidate attributes (cultural fit)
• Recruiting the candidate pool
• Assessing the candidate pool
• Making the final decision and "onboarding" the successful candidate

He goes on to say that the failure rate for executives is extraordinarily high and that failure to spend appropriate time on all of these elements is a probable cause.

He has some pretty good data to back him up. He cites the facts that CEO's hired after 1985 were 3 times more likely to be fired than those hired prior to that date and that the overall turnover rate for CEO's has from 6% in 1995 to 14% in 2002. In case your conclusion is so what, there is a direct correlation between CEO performance and organizational performance that has been documented by everyone from Jim Collins in Good to Great to the Department of Labor.

Another source describes the failure rate of new managers as exceeding 40% in the first 18 months. The costs of turnover is estimated at between two and five times annual salary in "hard" costs, so we aren't talking about a tempest in a teapot.

He shares some pretty interesting insights as to the causes of these failures as well. Succession planning in most organizations is frankly reactive. People don't like to consider and plan for their own departure. Another reason is that while many C level people are gifted business leaders and strategists; selection and placement are not core competencies for them. A study by Drucker shows them to have about a 33% success rate at choosing their own successor.

The literature indicates that when it comes down to it executive search committees tend to rely on their own "gut" instincts, select candidates who "mirror" their own attributes, and other human tendencies in making their selections. The least reliable indicator of success is an interview without other validating information. Similarly "track records" aren't always reliable unless the organization is facing similar challenges and an operating environment to the one the candidate faced. The skills sets at each level of management and leadership also become increasing complex- success as a middle manager or operational executive is not necessarily indicative of success at the higher level.

Last week I talked about the "leadership crisis" with something approaching 50% of middle managers rejecting providing "clarity", direction, and attending to morale issues as being their responsibility. When does the recognition that these responsibilities are part of their job occur if not built into the process? Correspondingly we know that highly engaged employees outperform their colleagues by a rate of 21% and that the "engagement" factor is synergistic to total organizational performance. The number one criteria for engagement is clarity.

Since many of our CEOs and other key executives come from "within" I don't think we can discount our investment in the process of their recruitment, selection, and development either.

So I guess it might be time to ask ourselves when we are ready to accept the idea that using the same process over and over and expecting a different result is a bit silly. Given the state of our economy, the costs of "presenteeism", and turnover shouldn't we consider making some changes?

Personal Accountability

This has always been an interesting topic to me. Some of the events of the last few weeks ranging from athletes punching one another out to kids returning to school seems to make it particularly relevant.

A colleague and I were discussing this topic the other day especially as it pertains to health care. Isn't it interesting for all the debate about whether there should be single payer, a public option, how much it will cost, etc. there is little discussion about the individuals role in the whole health care discussion other than as a beneficiary.

I have some pretty strong opinions on this topic. Among them I believe that all Americans should have access to a basic level of health care much like public education and that until we provide that the costs will never really be managed.

I also believe that individuals have a right and responsibility to participate in the management of their own well being and health. We don't talk about that very much. I would venture to say that the majority of Americans who have health insurance are also covered by a group plan- employer, government agency, association, etc. so they have little understanding of how much their health care actually costs and care less until it impacts them in the way of increased co- insurance, higher deductibles, denied claims, or related activities.

I have mentioned a couple of other related concepts regarding health care like our inefficient delivery and focus on the costs of processes rather than paying for outcome based management, but this is a different issue.

I remember years ago when a new employer arrived in town and declared a tobacco free workplace. People were outraged. How interesting? An employer who took the position that if you knowingly contributed to the detriment of your own health they didn't care to subsidize your real or potential higher expenses so they wouldn't hire you.

We tried to pass a law recently requiring all restaurants to post calorie counts for everything on their menu, luckily it failed. Would we want to extend that to homes like the dram shop laws?

Dram shop laws extend liability to private individuals for serving intoxicated people or allowing them to depart your home intoxicated without at least attempting to intervene. Can you see requiring a menu with calorie counts at dinner parties?

I think a big part of the issue is that of personal competency. Personal competency is that "other" right that constitution provides us with in addition to the concept of personal property.

When we began to industrialize and people left the "farm" many went to work for large employers. Large employers responding to both collective bargaining and offering competitive compensation began offering "fringe benefits" including paid time off, retirement and pension plans, and group health insurance benefits. A few years ago it was not atypical for employers to pay all the costs for health insurance for employees and their dependents. Employees had no idea and didn't care what they cost. Add these third party payer systems to advance health care techniques, technology, and a few other things and we created a trillion dollar health insurance industry, and very high expectations.

Very few employers to my knowledge even today talk extensively with their employees about ways they can contribute to lowering health care costs. The idea of "mandated" health screening, enforced wellness, and sliding employer contribution rates based on lifestyle health care costs would probably be seen as some type of corporate fascism. Your employer shouldn't be able to tell you how to manage you lifestyle, right? Even if they pick up the majority of the cost....

I believe until we address the personal accountability issue and employers
actively engage and educate their employees about the root causes of many of the costs we will only be addressing part of the problem. What do you think?

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....

So You Want To Be A Leader?

This is actually the topic of a presentation that I used to do for our local Chamber of Commerce leadership development program as the last chapter of an eight month development program. Our intent was to send them out with both a sense of empowerment and accountability to something larger than themselves and their companies.

I among others have had the opportunity to discuss and debate what differentiates leadership and management on the "pages" of this blog, linkedin, and a number of other venues as have thousands of others smarter than me.

I ran across a summary of an interview with Robert Dolan, Dean of the Ross School of Business at the University of Michigan, on BNET that I think summarized it it more succinctly than I have ever seen or heard before. He stated, "a manager maintains the status quo and delivers profitability, a leader performs three essential functions-

• they develop and encourage great talent merely with their presence
• they see new opportunities and innovations and push the organization to pursue them
• they act as a moral compass for the organization and role model the appropriate adoption of the organizational values and principles."

We can argue for decades about all of the other characteristics and attributes, but what I really like about Dolan's point is that they describe action and doing rather than passivity.

I found this summary especially timely because I hear the media and others starting to declare that the recession is "over". It is over because the stock market is moving up and large corporations are starting to declare profits again. I guess the fact that they expect unemployment to remain in double digits for the foreseeable future and that we have a health care crisis represents a rounding error. Not to me.

I like to think of myself as a realistic optimist. I was hoping that the recession would serve as kind of a national wake up call on a number of key societal issues. As anyone who has read my blog, my book, or other publications knows I am a big fan of engagement, true engagement. That is a system where stakeholders align in a common purpose. Studies show that organizations who adopt and maintain engagement strategies outperform their competitors in every key dimension. I was hoping the recession would cause more organizations to recognize that engagement is not only necessary, it is good for business.

I still remain hopeful that the "end" of the recession doesn't mean we think we have solved the health care issue. We have a very expensive system that delivers health care inefficiently and with pretty poor outcomes.

I am also a fan of personal competency. Getting away from the corporate and governmental codependency that has dominated our economic model for the last several generations. Employees need to be given an opportunity to engage and in return they need to be educated and expected to play a role in decisions about their health, their long term economic security, and generally be financially literate.

Much of the debate around leadership is whether leaders are born or "taught". Is it a series of characteristics or traits or is it behavior? I kind of like the behavior model. If you have capacity and you don't do anything with it are you really a leader? I think that is similar to the point Malcolm Gladwell made in Outliers, a high IQ in and of itself is no guarantee of spectacular success either personally or professionally, you must apply it.

When I look at where we got to and how we got there I have to tell you I see a lot more people in business and government who are managers- protecting the status quo and profitability; than leaders, individuals who develop deep talent, challenge their organizations to innovate, and act as moral compasses and role models not only internally, but externally.

Even the debate over health care represents an interesting model; we recognize it is compromised, but we seem (at least our "leadership") to embrace significant change in a model that doesn't work in delivering against key performance measurements.

I heard earlier this week that the performance bonuses paid out by the major financial institutions exceeded their recorded profits. Am I the only one who missed the logic of that decision?

How can we declare the recession is ending with record unemployment?

So for me I like Professor Dolan's definition of leadership. To his three characteristics I would add two more of my own:

• Come to work every day prepared to be fired for doing the right thing.
• Think about your "legacy", what you leave behind more than your "career", what you take with you.

It would appear to me that if you choose leadership rather than management as defined by Dr. Dolan you might not find the field nearly as crowded. What do you think?

The Power Of Relationships

As you all know I agree with Margaret Wheatley that the most important influence in organizations is relationships; not systems, not technology, but relationships.

I had the occasion to join a friend last evening with a friend and colleague of his I hadn't previously met. I found his friend to be charming, personable and very articulate. As our discussion turned to the inevitable " so what business are you in", he said that he worked for an organization that distributes a pharmaceutical type of product that is manufactured in Europe. What was especially interesting was that he shared their "distribution" network was almost exclusively based on relationship selling; no large sales force , no "cold calling". It is based on trust and referral.

A week or so ago I mentioned an article by Jeffrey Pfeffer of Stanford. He opined that much of the issue with health care in the United States is in many ways relationship based; most Americans rely on their employer for health care and for economic security. Compared to other countries our "safety net" is pretty small. He talked about the effects of stress about their employment and the accompanying systems like health care tied to employment and the direct correlation to health care issues. I agree with him.

I read some articles and listened to a couple of "idea casts" on BNET this week that illustrated the same thing from a different angle- the relationship between employees and leaders and how in these times especially employees watch their leaders for any sign of positive or negative events or signs. They do that normally, but in these times it is exacerbated to the nth degree. Marcus Buckingham says the most important attribute of leadership is clarity- people want to believe their leaders have a vision.

My own personal research validates information published by Peppers and Rogers, BlessingWhite, Gallup, and others about the power of engagement. I am talking about true engagement which includes customer, employee, shareholder, and stakeholder. Organization's with high engagement outperform their competitors consistently and by an order of magnitude. Engagement is about relationships.

I have written and spoken a lot lately about social networks and their increasing importance in communications strategy. I believe that social networking is about relationships.

I have also written and spoken about the "social contract". In historical times the poor were tied to the wealthy. They literally "belonged" to the property or estate for hundreds of years. The American "experiment" was all about eliminating that. You could come here and reinvent yourself.
You could homestead a piece of property of start a business. Then we ran out of frontier. Consistent with the rest of the world the Industrial revolution occurred. We exchanged the value of personal competence for the promise of "security" in return for "obedience" The power of the great capitalist was tempered only by the labor movement. That was about relationships,
however dysfunctional.

The "world" economy changed that social contract. American industry was not always dominant, our quality suffered and correspondingly so did our market share. Interestingly much of the "new" management models like lean manufacturing and TQM have very strong relationship components to them. U.S. companies retreated from economic security in return for "loyalty". Traditional pension plans are almost obsolete. The parental relationship between employers and employed relative to health care is in crisis mode. Our health care model is parental. We don't address root causes of costs, we shift them around. People don't want to share responsibility for their health or the costs of treating them. That is a relationship, although another dysfunctional one.

I am not suggesting that a "parental" model is appropriate. Anybody that has ever heard me speak, worked with me, or read any of my writing knows better. I rather like the concept of "personal competence" and relationships founded on mutual respect and honesty between employer and employed, taxpayer and government, supplier and customer, and individuals. A relationship based on respect, information, and mutual responsibility and built on a foundation of trust. Maybe I am just nostalgic or misguided, but I think that is what the Founding Fathers meant so many years ago when they formed this country.

Tomorrow is Independence Day, maybe a good day to reflect on what they meant and the critical relationships in each of our lives. I think that is what I'll do, how about you?

Dealing With Whole People

The past couple of weeks have been interesting to me. Sometimes I find myself to be more of an observer than a participant in things and my observations really stay with and sometimes trouble me.

A week ago today was Father's Day. As I get older the value of being a father and the significance of my children take on more and more meaning to me. We have kind of a tradition. My father in law, brother in law, and I celebrate Father's Day at least partially together. A big part of that is the recognition of the joy it gives my father in law to be surrounded by his children and grandchildren. My own father passed away several years ago, but I recall how much it meant to him. 2009 has been for me, like many others a tumultuous period to date. I can say that when I look at my children and what they have accomplished and the promise I see in their future it gives me a renewed sense of purpose.

My father and I did not always enjoy a cordial relationship. I am very glad to have the relationship with my children that I do. I respect them as people and as young adults and as a result we talk pretty openly and honestly. I hope that continues.

I watched the elections in Iran over the last two weeks as well. I was disappointed by the results, but heartened by the number of Iranians who voted their conscience and had the courage to openly express their sense of betrayal at the process. I am perplexed by the reaction of many Americans as to the role we should play in the process. We are currently engaged in civil wars in two different Muslim countries where to a great extent we were not invited and I am not sure we are welcome. Some would say that our "influence" in Pakistan is equally resented.

I find the newly "re-elected" President of Iran to be a petty tyrant and a demagogue of the first order, but do we really have the right or the need to insert ourselves in yet another countries electoral processes without invitation? When W won the election against Gore, a decision some would say was decided in the Supreme Court, did any other country threaten to invade us to "fix" the process?

One of the last things I find perplexing is our continuing fixation with Michael Jackson. I consider him almost a contemporary. We are essentially the same age and I have found his music at least on the periphery of my awareness since I was an adolescent. He was a gifted song writer and choreographer, but he was also a tortured soul with a lot of dysfunction surrounding him. The last several days the press seems obsessed with rehashing everything about him.

He was an entertainer, not a statesman. His personal life was an episode of the bizarre. Why with all of the other real issues surrounding us are we obsessed with him. Farrah Fawcett was a beautiful woman whose depth and dignity seemed to grow as she matured. She died from a horrible illness that didn't seem to be correlated to her life style. She has been almost a footnote.

I just read a couple of interesting opposing issues on one of my favorite websites- BNET.com. One of them is dealing with managing the whole person that is your employees; recognizing and cultivating their hidden talents and creating opportunities for them to utilize these abilities to your mutual benefit. The other is about why CEOs and other powerful people don't use social networking; because they are so powerful and so connected they don't need to, social networking is for those of us who are seeking validation.

I find that interesting to the point of amusement. Our current President seems to value the idea of connection and social networking; both as a candidate, and in his elected capacity.

My research and experience tells me that true engagement is one of the most powerful tools that organizations have at their disposal to improve their performance in every critical area and that only 30% of organizations in the world have a formal engagement strategy. I also read daily that trust in organizations, especially senior executives is at historic lows. Two of our mainstay industries; financial services and the automotive industry are relying on government bailouts to survive and much of the public is baying for the blood of their senior management.

Although it is very popular with consumers,health care industry professionals and others find a public health care model unacceptable. Good thing their network has their "back" and they don't need to rely on social networking or related media to make their case.

A lot of stuff in here I know. I will continue to try to understand and appreciate people one at a time and to build relationships. It is what I know and what I trust.