How many Souls Have Left the Building? A Conversation on Employee Engagement.

I recently had the opportunity to sit down with Brad Federman, author of a new book on Employee Engagement (unambiguously) titled, “Employee Engagement.”     http://theengagementfactor.wordpress.com

I wanted to get his opinion on all things Engagement – What is it?  Why don’t companies understand it? What can they do about it?  He offered some great insight, even better sound bites, and a compelling argument as to why this is THE business challenge the will separate the winners from the losers during the economic recovery.

Seven questions and answers that will be sure to lead your organization to Engagement bliss, or simply scare you to death.   One thing is for sure, if your company wants better execution, then your organization better address the engagement issue now or it will address your organization later.

Take a look and let us know what you think.  I’ll make sure Brad responds to any questions that you may have.

Many books have been written about the topic of Employee Engagement.  What makes this one different?

(Answer) First, most books on Engagement tackle a piece of the subject, but do not take a holistic view providing the reader with a less than realistic view of what engagement really is.  It would be the equivalent of educating someone on small business loans and giving them the impression that they understand everything there is to know about the economy.  Second, this is not an HR book.  This is a business book for managers, leaders, and executives who want to grow their organization regardless of their function. 

Why do you think so many companies still have a problem grasping this concept?

(Answer) The entire economy has been turned upside down, the employer-employee relationship has been turned on its head, a generational shift is occurring in the workplace, technology has dramatically altered how we communicate and perceive one another, yet most of our tools, structures and research we use as well as the habits we live by come from the 80’s and 90’s.  We have yet to catch up to our current reality.  Some don’t recognize the changes, others hope things return to what they coin “normal”, and many that recognize and grasp our new reality struggle with how to act on it.

World at Work recently released a study stating that Engagement has decreased 9% worldwide and 20+% among high-performers.   Did this surprise you?   What do you think the implications are for companies trying to navigate what appears to be a slow moving economic recovery?

(Answer) No it does not surprise me about this study.  The implications are simple and straightforward.  Those that focus on engagement now will recover faster and stronger than those that do not.  Many organizations are still healthy because they never lost sight of engagement during this difficult period.  When the economy does recover, the floodgates will open at certain organizations and they will lose their intellectual capital.  But that is not the scariest part.  The scariest aspect is that that there are companies right now that do not realize the bad shape they are in with their business. They blame their ills on the economy.   My question for those organizations is…You may have the bodies, but how many souls have left the building?  Without spirit they don’t have a business. 

What do you consider the top three reasons for decreased engagement?

(Answer) Fear, Control, and Self Interest starting with senior leadership then cascading down from there.  The ingredients that create strong, productive relationships are also the same ingredients that create healthy, dynamic organizations – Trust, Transparency, Authenticity, Ownership (accountability), Creativity and Resourcefulness.  Unfortunately difficult circumstances cause many organizations, specifically senior leadership, to neglect what is important.  During difficult economic times people tend to act or make decisions based on fear, concerns, or anxiety.  All of us have fears, concerns, and anxiety but if we are able to admit when we are falling prey to them and work through those issues with others then we are able to make healthier decisions.  When stress and fear take over we look at the world in exclusive terms and in limiting ways.  We become focused on mitigating risk and lose sight of opportunity.  We decide to put in a number of controls to create predictability and political jockeying goes into overdrive because everyone wants to keep their job.  These types of behaviors not only spread and change the culture of an organization, but they hamstring the very people who can help us survive these challenges and come out of the other end.  Stress and fear can either be our jailor or our counselor.  It is our choice.  Too many leadership teams during downturns like this one choose, consciously or unconsciously, the jailor and then rationalize it to make themselves feel comfortable.

Many CEO’s still view Engagement as Soft and HR-ish.   Assuming one of them gave you 30 seconds to convince him/her that this is important, what would you say?

(Answer) First of all I would love to have more CEO’s give me 30 seconds.  Any takers?  More importantly, I would like to see a CEO convince me that it is not important.  But since you are asking the questions, here it goes…I would ask them “What factor(s) is most paramount to their success? “  Is the answer is product innovation, sales, service. My next question is going to be “How do your people impact service, sales, product innovation?” Then I would ask them “Why it is acceptable to only 11-24% of their employees proactively helping the organization toward that goal?”  Last I would ask them “What do they think the impact is?”  Seriously, we would not settle for a manufacturing plant at 70% capacity, so why would we settle with our people.   We shouldn’t. We should invest in them.  

Can you share a success story from a company that has made significant improvements in Engagement and the business impact of doing so?

(Answer) We worked with a high tech firm.  They were using a home grown survey that had too many questions, was not tied to research, and was not adding any value.  The survey was seen mainly as an HR activity.  They decided to make a change and they went with our survey the Engagement Index.  The first year that we worked with them the feedback illustrated very low levels of Engagement.  We were very clear with them about which issues were needed to be resolved in order to get an ROI from this process.  We also helped them with follow up, focus groups, and action planning.  Leadership was seen as a large portion of the issue.  There was a real lack of trust in their senior leadership.  First came a bit of shock, then regret, and then the excuses.  We helped them process the feedback and they came to the realization that not only did the organization have to make changes, but their leadership had to as well.  We have worked with them for four years now and their engagement levels have significantly improved.  There leadership is now trusted, and people believe in the mission and direction of the company.  Many employees shifted from being angry, complaining, sabotage – to pulling for the company even during difficult times.  Financials had been going south, but one year into our efforts they were able to create an 11M positive shift in profit and the engagement numbers and financial numbers have continued to go in the right direction.  They have taken the shackles off of their employee’s hands, allowed them to get back to work, and work passionately together along the way.  

Shameless Plug Time – Say anything you want here to convince readers as to why they should purchase this book.

(Answer) This is a book about business, but more importantly, it is a book about life.  The book will help you improve your relationships, team, division, organization, or strengthen customer relationships.  Any professional, manager, or executive would benefit from this read, but don’t take my word for it.  Here is what others have said:

“This will be the definitive book on employee engagement for years to come.”

“I know this sounds crazy, but this book has more to do with navigating life than improving employee loyalty, etc. I was surprised at how much I gleaned from this “business” book.”

“If you read one book on Engagement, make it this one!”

“Thoughtful. Brilliant. A genie in a bottle!”

“It will give you insight into the language and concerns of the decision-makers.”

Excellence in execution is infrastructure

Eriks note: This is a guest post by Meri Gruber a leading expert on business execution. She blogs on the intersection of innovation and business execution at www.competingonexecution.com

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CEO’s continue to rate execution excellence as their top challenge. But what does “excellence in execution” actually mean? The CEO wants to turn the wheel and have the ship respond, but according to extensive research repeated year after year, only 10-15% of wheel turns get the ship moving in the intended direction. This means most ships are positioned poorly to weather a storm, and are also very likely to miss the trade winds of opportunity.

This disconnect between the captain, crew and ship is what I call the execution gap. Nobody argues there isn’t an execution gap in most companies. No one argues the execution gap isn’t costly – after all 85% of financial performance comes from execution. The big question is why? Why is there an execution gap? The basics of good business execution are thoroughly researched and described:

• Business alignment and
• People performance.

Excellence in execution requires an organization aligned around simple and clear business values. But the best practices on business alignment and people performance fly in the face of many of our deeply held but unexamined assumptions about leadership, teams and motivation.

There is a whole body of research around these deeply held but unexamined assumptions – social proof, fixed mindset, the liking effect, our oversimplified models of human behavior to name a few. Each of us has our own unique set of these assumptions, and companies are challenged to get complicated messages across such a diverse backdrop.

Excellence in execution is infrastructure, because processes and tools can incorporate and model best practices in execution to a degree and with a speed and flexibility not previously achievable for most organizations. And the results are clear. Companies that use processes and tools that incorporate execution best practices outperform their competitors.

Business execution software platforms like SuccessFactors propagate the company strategy to help the crew prioritize the one thing they need to do today from the 10,000 demands on their time. Crews who understand the priorities can apply their own wisdom and judgment – an execution best practice that increases company performance and individual motivation.

Together with social media software platforms like Spigit for internal innovation and Jive, SocialText, PBWorks, and Yammer for internal collaboration, these execution platforms create huge opportunities for companies to get their execution culture right and get it implemented. Internal collaboration and innovation tools create a dialogue within the company, allowing all crew members to inform the strategy and improve processes. Social networking communities, blogs, forums and Twitter let companies extend their culture and values beyond the organization and engage with their customers at a whole new level.

CEO’s no longer have to shout over the wind while crew members rush around trying to find and do their jobs, making their best guess as to what direction to set the sail. CEO’s can now steer an interconnected ship. The crew is connected to the CEO and to each other. The crew also has connections to the outside world that they can bring into discussions of the ship’s performance.

The execution gap is real, and is costing you money. The problem is not strategy, or analysis. “People know what to do but don’t do it”. Create a backbone for excellence in execution with tools and processes that model your values and incorporate best practices and you’ll fly across the seven seas.

Someone’s getting it done

You know we’re always talking about the execution and that nothing else is more important to drive business results than that. Obviously execution is about getting things done and the question then is rather who is executing?

I read the result from this survey from our friends at McKinsey & Co. where they found that there’s been a shift in how individual leaders lead during the past year. Respondents say that during the crisis, they have seen far more leaders focus on monitoring individual performance. This is a trail you have to walk carefully though. Leaders going micro managing and monitoring progress on activity are up for some problems.

As the respondents in this survey also notices it’s really about inspiring others and defining expectations and rewards. We talk about this as a manager’s duty to monitor and measure performance but really manage potential. Helping individuals on the right track to get all their inherit talent to propel the business forward. The more you use your talent potential the more output and the more it grows. No one really signed up for doing only part of what they can anyway. Anyway hopefully we got some good coming out of this current storm are the same ones they say will help their companies thrive in the future. The right people want to get it done so help them with that or get out of their way. If they don’t then yes you change that or you get them out of their way.

Employees Are Desperate for Feedback

By Mark Murphy, CEO of Leadership IQ

Note to managers: Employees need a lot more feedback about their performance. According to a new study by Leadership IQ, 51% of employees don’t know whether their performance is where it should be. That’s pretty shocking, so I’ll say it again: We asked 3,611 workers across 291 companies to respond to a series of survey questions, including the question “I know whether my job performance is where it should be.” The results? 51% Disagreed while only 21% Agreed (27% were in the middle).
How is it possible that half of employees don’t know whether their performance is where it should be? Well, the other questions in our study provide some clues.

We asked employees about the amount of interaction they have with their boss, and a whopping 66% of employees said that they have too little interaction with their boss. Only 18% said they have just the right amount and even fewer (16%) said they have too much interaction with their boss.

Alright, so you might be tempted to think that you should walk the hallways giving your employees pats on the back to make them feel better. But not so fast. This study revealed that employees don’t just want warm-and-fuzzy interactions. While 67% of employees say they get too little positive feedback, 51% also say they get too little constructive criticism from their boss. That’s right: Employees are desperate for information about their performance—good, bad or otherwise.

Employees want to know how to improve and grow; they want to perform their best. Ultimately, employees know that the economic stakes are high, competition is intensifying, and that jobs (and even companies) are at risk. Smart employees know that as their performance improves, so too does their future (including bonuses, job security, choice assignments, and more). And thus they want lots of information about how to optimize their performance.

While we’ve been talking about the Quantity of feedback that employees get, this study also revealed just how poor the Quality of feedback can be. Employees not only said that they’re not getting enough feedback, they also said that the feedback they do get isn’t terribly effective. In our study, 53% of employees said that when their boss does praise excellent performance, the feedback does not provide enough useful information to help them repeat it. And 65% of employees say that when their boss criticizes poor performance, they don’t provide enough useful information to help employees correct the issue.

As we outline in our upcoming book “Hundred Percenters: Challenge Your Employees to Give It Their All and They’ll Give You Even More,” employees need information about their performance that is Timely, Specific and Candid (i.e. they need a little TSC). This means employees need real-time feedback that catches issues before they balloon and opportunities before they get missed. They need feedback that tells them exactly what to do more and less of, and they need that information truthfully.

Too many leaders delay feedback because they’re trying to figure out how to spin it, sugarcoat it, or bury it. For example, may managers try to squeeze a negative performance critique or correction between layers of positive reinforcement. In our upcoming book, we call this the Compliment Sandwich, and it doesn’t work. It’s like trying to tell your kid to get off drugs while praising him or her for mowing the lawn last Saturday. It’s a crazy mixed message that gets zero results.

A professional athlete can get dozens of bits of feedback during a practice or game. A student gets constant feedback throughout the day. But it’s not uncommon for a typical employee to go months without any meaningful feedback about their performance. We say we need our employees to perform at higher levels than ever before to help turn the economy around, but how are they supposed to perform when they’re not getting nearly enough feedback about what they’re doing right (which needs to be repeated) and wrong (which needs to be eliminated)?

One final note: Not only do employees need lots of great feedback to improve their performance, they also need it to stay engaged in their jobs. According to our study, employees who said they didn’t get enough feedback were 43% less likely to recommend their company to others as a great organization to work for.

So the economy is recovering but are you?

There are things that human nature always seems to be keen on talking about. One of them is the weather. I just looked at Facebook and counted 8 of the top 12 posts talking about the rain in CA. The other area is of course the economy.  And the number of articles and posts on that is too much to even count. Both the weather and the economy have something in common…yes they affect us personally and in business, BUT you as an individual and business leader can’t do anything about either of them. That’s right, a lot of observing, talking and, for sure, adjusting of plans and clothing, but again we adapt to it.

As a business leader your job right now is to make sure that as the economy recovers (though we hear and see different outlooks on how fast and how soon), you are making the most out of it. Sit on your butt and take for granted that you’ll just grab a good, and maybe disproportionate, share of the increased demand, and you’re in for a big surprise. In a recession the strong survive and come out stronger. Customers are even more demanding and competition is stiffer. Especially from those looking to grow at your expense.

Whatever your plan for incremental business accelerating your growth with the recovering economy, there’s one thing you really need to make sure happens within the organization. In lieu of the weather and the economy, you really can do something about how you execute on your strategy. Your job is to make sure that you drive commitment and targeted action to what matters most: the execution of your strategy in this recovering economy.

We invite you to share your stories and ideas for maximizing your recovery in this economy here on the business execution blog

The Recession is over. Now what?

You’ve probably seen the recent news declaring the end to the recession, or technically the end. The news has been met with little or no fanfare since most people still feel like it’s a recession and likely will for quite some time. However, for Businesses, it does beg the question:  “What now?”

Here are my 3 tips for an effective recovery:

1.  Strategic Agility does not equal Execution Agility

Many economists are predicting a U-Shaped (i.e., Slow) recovery as opposed to V-Shaped (where you crash and then immediately soar upwards).   U-Shaped recoveries require Companies to have tiered strategies  to take advantage of growth opportunities regardless of how slow/fast a rate they occur.    This means that your 1st Quarter strategy probably won’t apply in the 3rd Quarter.  Assuming that you have a plan (most companies do), then the next step is to make sure that your employee’s understand the plan, what they need to do to support the plan, and how to re-focus when the plan changes.  Put simply, it’s no good to have “Strategic Agility” if you don’t have “Execution Agility.”  If in Q3 of next year your employees are still executing against your Q1 plan, then you’re going to leave significant value on the table.   Companies with the best Business Alignment will win in the recovery.

2.   Let People Inform the Strategy

You should seriously consider taking a talent inventory of your current (often downsized) organization.  A lot has happened in the past 2 years:  Workforce Reductions,  slashed development budgets, and artificially high productivity (due to unemployment).   If your CFO and Head of Sales are the only two people attending strategic planning sessions, then you’re going to devise a plan with which you simply don’t have the resources to execute.  World-Class People Performance is still your best bet now and in the future.

3. It’s Time to Make Amends

If you’ve cut headcount, frozen pay, slashed benefits, decreased hours, etc… Then at some point in the near future you’re going to have to start to make amends.   People are grateful to just still have their jobs, but that simply won’t be enough over the long-term.  Your employees don’t just view work as a transactional relationship (a dollar’s pay for a dollar’s work) — According to David Rock, author of “Your Brain at Work,” what drives high performance is a person’s social and emotional connection to work.    The recession has in many cases forced a transactional relationship as people worry about their futures, their jobs, and their families.   According to Rock, Status and Fairness (equity) are two of the main drivers of performance.   I would argue that the economy has focused employees needs for status and equity outward (”Two of my neighbors lost their jobs, I’m just happy to have mine”), but at some point in the near future they’ll return their focus inside the four walls of your organization and you better be ready.  You’ll need to make sure you get ahead of the curve in terms of recognition and reward or you’ll likely lose many people as their employment options increase.   Put simply, you need to reengage the workforce.

Save some green…

Here at SuccessFactors we’re obsessed about driving real impact on companies top and bottom line from smart usage of SuccessFactors. SF Research is all about researching, quantifying and sharing leading practice for this. In this guest post from Chris Thorman at SoftwareAdvice you can read about how companies can save some green for themselves all while going greener in their IT spend.

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In case you haven’t heard (or aren’t obsessively following IT trends like we are), the great trend in software is the evolution from traditional “on-premises” software (e.g. client/server software installed at the office) to Software as a Service (SaaS) (i.e. web-based applications that are managed in the vendors’ data center and accessed “on-demand” through a web browser).

Given what’s at stake for software companies in either camp, debating the merits of each model has led to some fiery discourse. We thought we’d fan the flames by introducing another angle: which model is “greener;” that is, better for the environment. We used electronic medical record software as the comparison example.

We crunched the numbers for each type of software. Here are the quick stats on power consumption of each software delivery method:

On-premises

Total energy consumption by four physicians: 9,408 KW/yr

Individual energy consumption by each physician: 2,352 KW/yr

SaaS

Total energy consumption by four physicians: 611.4 KW/yr

Individual energy consumption by each physician:  152.85 KW/yr

For an even quicker summary, the SaaS software used 93% less energy than on-premise. That is a massive energy savings that if scaled to a large number, has world wide effects on energy consumption.

DNA test for people performance

Today it’s been stated that testing your DNA to assess your potential and how you should train to excel in sports is where sports nutrition used to be a couple of decades ago. On the plane the other night I read this article from Bicycling magazine and it’s really becoming mainstream practice to see where your athletic potential lies. Not so much for absolute levels but to find it relatively if you have fast or slow twitch muscles so you’d know better in what disciplines you could get really good and where you just genetically are already capped.

In business as a manager you do whatever you can to hire and develop your folks to grow into roles that you see a great fit for and have a real business need in. I think it’s safe to say that it would be a while before we figure out how to and allow ourselves to DNA test our colleagues and contractors to help assess their potential (pretty scary and far fetching thought right?!) to drive people performance.

But what is really at your hands as a manager though is to drive as much performance from your people as you possibly can no matter their genetic capability. No one wants to leave work feeling completely underwhelmed or go celebrate some work done if you don’t feel that you did your best. You are a coach and a manager that can and should set up for ultimate performance for your team members. Get your people to feel that they left all they had on the field that day. People want to perform and you as a manager no matter at what level – even when you manage and coach yourself – should set up for this.

A while ago I learned about some of the best research into how you actually drive real people performance. Learnings from high pressure organizations, sports, art and other high performance environments. Elkiem who has studied thousands of high performers and SF Research then recently partnered up to help accelerate their research findings into the hands of people that are accountable for driving people performance in their organizations – and who isn’t?

Look at this paper – Leaders Drive Productivity -  and get some insight on how you could drive better people performance from creating high performance environments  in your organization.

Business Execution

We’ve been talking about how companies can drive better results from better execution throughout the lifetime of this blog. With this launch of a new software category Business Execution Software we decided to explicitly rename this blog. Welcome to our new born or reincarnated Business Execution blog.

Lars, our founder and CEO, and I are working on our book Return on Execution©. You will find posts from the research and findings that we’ll share in the forthcoming book right here on the Business Execution blog. After all driving execution is what explains the financial performance of your company. Execution creates sustained competitive advantage. With an average of 70% of your operating expenditure comprised of labor (for not taking contractors into account) there is no bigger expense post to optimize if you want to drive better execution. It’s not a matter of what but rather who drives the execution of your strategy. To learn more about this exciting book visit this Return on Execution(c) link to read the short version of it.

You’ll see posts from the SF Research team as well as guest posts from our select thought leaders on the topic of driving execution. Keith will share insights from working with our customers around the world in how they increase their ability to execute both here and through Twitter so sign up for that too. We welcome your active input and feedback. Let’s go drive some better execution.

Strategy Definition or Strategy Execution…

Which is more important?   It’s a bit of a chicken vs. egg argument, but it’s fair to say that both are critical to driving positive financial results.   Put it this way, if defining strategy explains 15% of a company’s financial performance then 85% must be explained by the execution of the strategy.  You can’t separate the two, but given those percentages it’s also fair to say that execution is  a much harder task. The more you study this the clearer the evidence becomes.

What do the greatest companies all have in common?  You got it — the ability to focus their organization on strategy execution by ensuring that each individual is working (i.e., executing) on goals that matter to the organization.  What type of goals “matter?”  Put simply, only the ones that have a direct line back to the Strategy sitting in a binder on the CEO’s bookshelf.

We’re just researching what impact we have on our customer’s ability to communicate strategy and execute new directions faster. The early results are very intriguing and positive – and we promise to share them when we finalize our research.   The timing is also significant as the economy has forced companies to be agile and demands that companies be able to shift their strategy (and subsequent execution) at a much more rapid pace than in a bull market.

The thing that struck me when doing some desktop research was that even though we know that 85% of performance is due to execution, the amount of content available is unbelievably skewed towards strategy — a simple web search on “Business Strategy” returns 3X more hits than “Business Execution”  (80M hits vs. 24M hits).   The term strategy execution returns only 3.5M hits.

The good news is that the “worm is turning.”   Execution is the topic du jour – maybe it’s the economy, maybe it’s just the natural evolution of business.   Regardless, you can put us squarely on the “Business Execution” team, and we’re looking forward to sharing our results soon.

After all, Execution is the name of the game to drive financial results