I just finished reading Malcolm Gladwell’s latest book, David and Goliath. Like all of his books that preceded it I enjoyed it a great deal. I see Gladwell as kind of a social facilitator and observer. He doesn’t try to present himself as a behavioral scientist with countless reams of data to support his conclusions, he makes comments and observations. The reader has the choice to accept or reject them.
While I enjoyed the entire book the part that most spoke to me was Gladwell’s discussion of legitimacy.
According to Gladwell legitimacy occurs when three elements are present -
- Those who are governed have a voice in the process; their input is sought and heard.
- There is a dimension of predictability and consistency in the application of the law or standards.
- The application of the law or standard has to be administered fairly and objectively, you can’t have disparate treatment without a clear and compelling reason.
The reason I find this discussion about legitimacy so interesting is in its application to the work environment.
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I think that most organizations today recognize that beyond their product or service brand intentionally or unintentionally they have also created and promulgate an employment brand.
Your organizations employment brand is the perception by current and future employees of what working in your organization is like.
Some organizations enjoy a very strong employment brand. I would include Google, Starbucks, Accenture, and Zappo’s in this arena. People have a pretty clear perspective about what these organizations value and the profile they seek.
Other organizations fairly or unfairly occupy the opposite end of the spectrum. I would put Walmart and currently McDonalds in this area.
We live in an environment where the competition for experienced talent is becoming more and more pronounced and a recent survey pointed out that the rate of voluntary turnover; employees electing to leave their job, increased by 45% between 2012 and 2013.
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I had a chance to read an article in the September 2014 edition of the Harvard Business Review that I found alarming and disappointing. The author talked about the fact that in a ten year period from 2002 to 2012 members of the S & P 500 had reinvested close to 60% of the profits they made in re-purchasing their own stock and close to another 30% in dividends to shareholders.
His point is this is why we are seeing a “jobless” recovery. Rather than investing in growth or compensation for the average employee we see distribution of the fruits of increased performance going to very few- the shareholder versus stakeholder mentality.
This is I suspect a large part of why we see that employee engagement has pegged at about 30% and remained there for years. We still don’t look at employees and their appropriate recruitment and retention as a strategic initiative.
There is quite a bit of buzz these days as to whether or not the traditional human resources function should be disbanded or minimally separated into two distinct components; an administrative function responsible for compliance, payroll, benefits administration, etc. and and function which is responsible for talent acquisition, training and development, succession planning, and other strategic components.
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Over the weekend I had occasion to purchase and read Strengths Finder 2.0. If you are not familiar with it, Strengths Finders is the assessment tool first developed in 2001 by the Gallup organization.
The essential concept behind it is that people who are given the opportunity to focus in the areas where their talents are most pronounced are much more likely to be engaged and have much higher levels of productivity.
A lot of these concepts were discussed in detail by Marcus Buckingham in his series of books and it isn’t my intent to go into them in detail, but there were some things that I feel are worth mentioning and reinforcing again.
The first is data collected by Gallup indicating that individuals who feel that like their work is aligned with their talents are six times as likely to describe themselves as highly engaged at work and three times as likely to describe their overall quality of life as excellent.
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Over 100 years ago Frederick W. Taylor introduced the concept of scientific management to the world and unfortunately to a large extent his theories are still the foundation that much of the relationship between employer and employed are based upon.
Taylor’s position is that the world is divided into two kinds of people, managers and labor. Managers think and labor does. This is also where the concept of white collar versus blue collar originated.
I would tell you that much of our failure to evolve our management and leadership theories go back to this premise. Even today most managers and supervisors are promoted based on their technical capabilities rather than their abilities to select, train, develop, and deploy talent. We still buy into the concept of human capital.
When scientific management really caught on we wrote a new social contract-rather than individuals learning a skill and negotiating the value of that skill the model promoted breaking tasks down into simple, easily repeatable steps that were easy to train and could be monitored for consistency. By breaking the skills down and removing the thinking part, you also lessened the value of the activity being performed.
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A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well.”
–Jeff Bezos, founder of Amazon.com
A brand is a living entity and is enriched or undermined cumulatively over time, the product of a thousand small gestures.”
-Michael Eisner, Former CEO, Walt Disney
These two business greats do a brilliant job of describing that ethereal concept we call a brand.
If you ask the average person about brand they will describe it as a logo or some other marketing oriented concept, but in the age of social media and instant gratification branding has taken on new dimension and meaning.
We live in an environment where the competition for experienced talent is becoming more and more pronounced and a recent survey pointed out that the rate of voluntary turnover; employees electing to leave their job, increased by 45% between 2012 and 2013.
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So we had a pretty gnarly snow and ice storm this last week in the PNW so I had time for a lot of contemplation and catching up on my reading.
As per usual, topics that speak to the concepts behind employee engagement continue to attract my attention and focus.
I will be honest; I am perplexed with why more organizations don’t invest in a strategy that clearly leads to significantly improved performance in every conceivable key performance indicator. Especially today, when studies are recoding that voluntary turnover was up by almost 50% between 2012 and 2013 and the cost of a new hire is up 15% for the same period.
When you add those statistics to the fact that on average engaged employees contribute almost 50% more per capita and you have to ask – “what’s up”?
Engagement has taken a pretty good pounding because a lot of people still see it as some kind of a motivation tool or a survey to be conducted by the HR organization. Others see it as soft science.
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My colleague Michael Beck posted a great piece the other day on why the majority of employers worldwide are doing the engagement thing wrong, addressing it reactively rather than proactively and I couldn’t agree more. Much better to build engagement into the fabric of your organization through appropriate selection and hiring, but it doesn’t stop there.
He pointed out that the latest Gallup poll provided some pretty eye opening statistics, including the fact organizations with high employee engagement saw a 147% advantage in earnings per share over non highly engaged organizations in 2011 and 2012 and the fact that the Department of Labor estimates that disengagement costs the U.S. economy between $450 and $550 billion dollars annually and for me at least that garners some attention.
Add to that recent studies indicating that voluntary turnover was up 45% year to year from and cost per hire is up 15% for the same period and you might think that more organizations would be examining their strategies and taking action. The interesting thing is that we have seen at best incremental improvement over the last five years.
I think there are a number of issues surrounding organizations inability or unwillingness to address this issue. I include the idea we really don’t understand it, we don’t make it a core strategy, the fact that most human resources practitioners are still in the compliance business, and that engagement is a relationship issue rather than a technological process improvement among my big hitters.
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Most of us have longer reading lists than available time. There are traditional hard cover books, PDFs and books saved onto our tablets, case studies our bosses have asked us to read and summarize, trade publications that continue to arrive when we least expect them via snail mail, and e-zines that appear in our email boxes in a never-ending stream. But when it comes to leadership strategies, corporate culture, and leadership development, there are never too many perspectives or books to read. Here are five books I highly recommend you add to your early 2014 reading list.
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I recognize that this statement in and of itself is not particularly profound. Indeed it represents the essence of the total quality movement. Good processes properly understood and practiced will consistently yield better results.
What I still struggle with after over 30 years as an executive, manager, and consultant is why we still don’t seem to universally understand this also applies to our relationships with people including our employees, customers, and other stakeholders.
Study after study has made it excruciatingly clear that when employees are engaged and aligned with you and your organizational objectives they perform at a higher rate and contribute significantly more. In fact the impact of engagement crosses every key performance indicator from stock price to revenue per employee.
So with that as a framework I would like to share three short vignettes with you about the relationship between process and results. All these are real experiences that I was involved with either directly or peripherally.
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The top of the social media iceberg is represented by Twitter, Facebook, Pinterest, Google Plus, LinkedIn, YouTube, Flickr, Instagram, WordPress, and Flipboard. With dozens more, how do you choose which site to dive into? Which site creates the most memorable digital footprint? All of the key sites may be useful, but if you’re a leader, which site helps to build an individual’s leadership brand?
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I was having a great conversation the other evening with a friend who is also my resident cynic. Growing up in the Midwest in a Latvian community (if you are unfamiliar with Latvia it is/was an Eastern European country dominated by the USSR among others) she has a natural distrust for conventional authority, corporate leaders anything else reeking of capricious (as defined by her) authority.
We were discussing as we often do the concepts of organizational structure, power dynamics, and the relationship between employers and employed.
We both agree that most of what we refer to as leadership today isn’t and that most of the models don’t reinforce an appropriate balance between shareholder and stakeholder interests.
What took me a bit off guard was when she expressed the idea that human resources professionals are the protectors of the faith, charged with maintaining the current models.
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A colleague of mine had a chance to attend the healthiest employers of Oregon awards program last week and he was intrigued and excited to share the ideas of the event with me.
Like him I was very pleased to see organizations focusing on this area and recognizing the importance of managing health rather than health care.
I would be less than candid however if I didn’t acknowledge that there were only a total of 57 organizations represented in the survey.
The U.S. spends more dollars per capita than any other industrialized country, and not a small margin. In 2012 we spent 17% of our Gross Domestic Product on health care expenditures; the next highest spending was 12%.
The other really disappointing thing is even given our spending our outcomes are in the middle of the pack.
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Who are your stakeholders? Does your business provide products or services directly to consumers? Or does your business fall into the B2B category? It really doesn't matter when it comes to answering the stakeholder question because, bottom line, all of your employees are representatives of your brand - and they need to provide service to all of your stakeholders, whether those stakeholders are internal or external.
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It is always interesting to me that when I see or read about what performance metrics executives should have on their dashboard there is often about a discussion about whether they should be tracking employee engagement or KPI’s (key performance indicators. As both a former human resources and operational executive my reaction is that employee engagement IS a key performance indicator.
There is certainly enough qualitative and quantitative date available to definitively determine that there is both a direct and indirect correlation between employee engagement and organizational performance.
The top performing and most admired companies recognize that which is why over 90% of them have developed and maintain an explicit employment branding strategy.
The Gallup organization has come out and stated that employee engagement is one of if not the most accurate predictors of long term organizational sustainability. In the UK it has been acknowledged to the point where there is actually a national initiative to address it.
So what keeps most organizations from developing and implementing an engagement strategy?
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While job creation is the buzz in Washington, the economy continues to suffer around the country. Since the recession began in 2009, employees have experienced downsizing, rightsizing, smartsizing, or whatever you want to call it when employees are unceremoniously given five minutes to gather their belongings, be escorted to the exit, and in the process, go from employed to unemployed in complete disbelief.
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Maybe it is just the phase of the moon, but there seems to be a proliferation of situations that indicate people are struggling with understanding and respecting boundaries.
A story that has gone viral is about a reporter who was terminated for comments she shared on her personal blog. Apparently initially she had taken the comments down, but decided to repost them to be true to her values.
Among her comments she shared personal opinions about people she interviewed and topics, the fact there were times that she was poorly prepared and other little tidbits. Somehow it seems she lost track of the fact that she was a public personality and her comments crossed over into areas that reflected poorly upon her and her employer. The fact that she initially took the comments down upon her employers request indicated she wasn’t totally unaware of this.
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I don’t know about you, but I have found that one of the longest journeys I have ever taken is that journey of introspection when I have faced significant milestones in my career and life and had to determine which path to take as I approached the crossroad.
As a child who was often ill I got the opportunity to spend a lot of time in my own company, much of it in hospitals and a good deal of the time away from pediatric wards. For much of my adolescence the effects of my health conditions followed me. I didn’t get the opportunity to enjoy some of the normal activities that kids do like little league, pee wee football, etc until much later. Even then I wasn’t terribly athletically gifted or inclined.
I did become very good at observing people. When you are a child late at night in a hospital you become part of the surrounding infrastructure. People carry on conversations and interactions as if you weren’t there. They aren’t being rude; they just kind of forget you are there.
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"Companies have a hard time distinguishing between the cost of paying people and the value of investing in them"
-Thomas A Stewart
1997
I think this quote from Thomas Stewart captures one of the most significant issues that organizations still face almost 200 years after the Industrial Revolution, the idea that it is the acquisition and deployment of talent that typically determines the long term success and sustainability of organizations.
I have spent more than three decades directly and indirectly involved in the profession we call Human Resources and I have the say the progress has been underwhelming.
A recent poll of CEO’s regarding what they perceived as the key value provided by their human resource function resulted in a pretty disappointing number indicating they weren’t really sure, with another significant group responding the primary value was in compliance and protecting the organization from litigation.
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Over the last weeks it has been interesting for me to see a number of discussions pop up on blog sites and social and business networking relationship sites that I belong to about the correlation between employee retention and employee satisfaction. The dialogue includes questions like:
- Is there a direct or indirect correlation between employee retention and employee satisfaction?
- Which is the more important measurement to employers; employee satisfaction or employee retention?
- What is employee engagement and should I be measuring it?
I will respond to those questions the same way I responded to them on the sites- assuming that there is a direct or indirect correlation between retention as measured by average tenure and satisfaction is potentially dangerous and misleading.
Employee retention at its most basic is a function of turnover. How many people join and how many people leave your organization over a given period of time. If you want to be more sophisticated you might measure “regretted turnover”, those you wanted to keep; versus “unregretted” turnover, those you didn’t mind seeing leave. I would concur that those can be very different.
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