David Sirota - How to Give Your Employees What They Want

Jim

Welcome back to People Performance Radio, you are here with Jim Matheson …

Steve

… and Steve Hunt.

Jim

Steve, you know what the small news of the day is?

Steve

What is the small news?

Jim

We've got a new local phone number here in the San Francisco Bay area, our own private podcast line, and it's a more reliable number than the one we had before, so just wanted to let everybody out there know. We appreciate any feedback you have, if you have questions, comments etcetera, give us a call—the new number is 650-425-7474 and that should be our number going forward. The old number, which was 203 something or other, is no longer going to be valid and if you do call that line we will not get any of the messages, so go ahead and just start using the new 650 number.

Steve

Cool, 650-425-7474—even I can remember it, all right.

Jim

Great, so this week we have an interview that you did recently with Dave Sirota who is the Chairman Emeritus at Sirota Survey Intelligence. So can you give us just a quick overview of what the interview is about?

Steve

Yeah, this was a great interview, Dave Sirota is a very well known industrial organizational psychologist, so it was cool for me just to finally have a chance to meet him, I've read some of his work, and he just has a new book coming out called "The Enthusiastic Employee", and one of the things that he talked about, and this is based on massive of amounts of survey dating going back, I think over 40, 50 years, is looking at, what do people really want from work? And one of the things he talked about is, fundamentally what people want from work really hasn't changed, despite all the hype around generational differences and everything. He says a lot of it's about getting back to basics and giving people what they wanted 40 years ago and what they want now, it's not that much different, so a very interesting conversation, I've learned a lot from this interview.

Jim

Sounds good, I'm looking forward to it, I actually haven't heard it yet so I am going to hear it live, like the rest of the audience, and why don't you go ahead and take it away, Steve?

Steve

Hi, this is Steve Hunt with People Performance Radio, we are continuing our SF Research Thought Leader series, and today we are talking with David Sirota, or Dr David Sirota, who's the Chairman Emeritus of Sirota Survey Intelligence, and just to get started David, first welcome to the show, and why don't you tell us a little bit about what you do. and what Sirota Survey Intelligence does?

David

Nice to be here, thanks for inviting me. Well, the concern of the firm and my concern throughout my career has been with the effectiveness of organizations. To put it in a somewhat simplified form business, success has two major determinants, one is simply, how smart is senior management, business smarts that is, how good is their strategy, mergers and acquisitions and marketing etc, it is the sheer intelligence and competence of senior management, so that's one factor.

The second is the morale and motivation of the workforce—are they enthusiastic about what they are doing and about their company, or are they just satisfied, or are they indifferent or are they angry? My career and the work of the firm is devoted to this latter factor, that is we focus on what motivates employees not merely just to conform to what management wants because they are frightened, because of threats, but because they are ethical people who will do what they are paid to do but because they want to, that is, they'll do so enthusiastically.

That's been the focus of the firm and has been my focus and the basic point here of course is that, no matter how smart the leader is, there ain't no such thing as a leader without followers, and great leaders have followers who want to follow, who want to carry out the strategy and so on. We have lots and lots of evidence for this, that morale has a tremendous impact on the performance of companies, we've done all kinds of analysis, correlating morale of a workforce with the stockmarket performance, for example, of a company—very, very strong correlations.

Steve

So David, so just sort of to summarize, so you are saying basically you have got a company and it depends on two things—are they set in the right direction, which is the intelligence of the senior leadership knowing to do the right things, but the other critical one is the execution. Once you've set the direction, you have to get people to actually follow that, and when you are talking, people often talk about leadership and they focus on studying the leader behaviors—it sounds like you're focused more of studying how employees react to the behaviors of leaders?

David

But that's also leader behavior, because the way leaders behave vis a vis the workforce will tell us whether or not they have people who are just going along to get along, or getting along to go along, or are indeed enthusiastically carrying out the organization strategy and operations.

Steve

So can you give us maybe a case study or a story about how some of the work you have done as helped companies really to execute more effectively, what you've come in and changed what companies have been doing as a result of working with them?

David

Sure, let me just say that the method that we use is, as you can tell from the title of the firm, is survey research, that is employee survey research. We're interested in data, not just simply talking theory from generalizations from other organizations, but what's going on in that company. We learn what's going on in the company with regard to the employees by going directly to the employees. We want to know if the employees indeed are motivated, have high morale and so on. We ask them very, very simply through surveys, questionnaires, interviews and so on, then we work with the data with management to determine how to maintain the strengths, because almost all organizations have strengths as well as deal with the issues.

Now I can't give names of the companies that I might refer to here with regard to work that has been done—let me just say that the actions that have been taken have ranged all the way from just little straightforward changes in the compensation practices of a company to a more psychological, to personal kinds of things like how do you get managers to manage people in a way where people in fact feel respected in management for what they do? In many companies, whether blue collar or white collar, you find that the employees are treated as if they're criminals in some way, if they're not treated respectfully, they're treated as if they don't want to work. They are there do as little work as possible for as much money as possible, and we uncover that data, we uncover the views of people, then work with senior management to develop ways of managing in that case so that people in fact feel respected, feel that their ideas for example are valued, get recognition for their contributions, are not supervised closely as if they were children or criminals, given latitude in doing their job, the use of judgement and so on. We find that has an enormous effect on the morale of a workforce and therefore on their performance and the performance of the organizations.

Steve

You talk about one thingm companies I think most people that have worked for a long time have some experience where they have that feeling like, "I feel like I have been treated like a child or a criminal", and no company, I would think, would set out on our mission, "We will treat our employees as criminals"—how do companies get themselves into that spot? And why do they continue to persist that way? How does an organization get into that spot of treating its employees so poorly, and what's required to get them to wake up and change?

David

Well it's an ideology, in other words, the question of how management comes to an organization and many do with that point of view, that is that people don't want to work, you got to drag them to work, and so therefore you have to supervise them closely, and of course that then becomes the self-fulfilling prophecy, meaning that it if you think of people that way, and that's the way you treat them, and voila, that's the way they start to behave. In other words, if you treat people as if they don't want to do work, supervise them closely and so on, in fact they begin to dislike their work and they dislike their environment, and dislike the management and then management can say, "See—I told you so, these guys don't want to work", but there were so many examples, and fortunately it's not the majority, but still many examples of companies which behave exactly the opposite, whose management style, primarily by the way because of the CEO.

If you take a company like Southwest Airlines for example, incidentally the most consistently profitability company in the airline industry, and their former CEO, Kelleher, who came there and said, "That's not the way we are going to deal with people. The flight attendants, the pilots and so on, they're the ones who interact with our passengers, we want them to interact well with our passengers, we want the passengers to feel as if they are respected, and we will therefore treat our employees the way we believe they should treat our passengers. And he then instituted various training and just day-to-day behavior and his own practices and the practices of other managers, which caused the employees there, the workers at Southwest Airlines, to feel that they are really appreciated, given a lot of flexibility on how they do their jobs. I mean there is all kinds of things we could talk about that. That's a very, very good example, so in answer to your earlier question, what causes management to feel that way, a lot of it comes from how the CEO wants an organization to be managed.

Steve

I think as you're talking, I'm thinking it goes back to the classic rule of "treat other people how you'd want to be treated" a little bit, and one of the things you're talking about this assumption that people don't want to work, that I hear now is people talk about generational differences, those millennials or Gen Ys, they don't want to put in their time and work hard, and I just think they're young. I don't think they are necessarily any different than we were when we were 20, I don't recall myself wanting to work long hours when I was 20 years old either, and so I'm curious, do you think that there has been a change in the way companies should be managed? Has there been a fundamental shift, with all this talk about generational differences, in terms of what it takes to run a company effectively?

David

Baloney, no I don't believe that, not at all, and it's not only a question of belief, I said we collect lots of data and we have done surveys now in hundreds and hundreds of companies with millions and millions of employees, we are able not only to say help a specific company with its data, we've abstracted from that data some general principles, which by the way you will find, if I can give my book a plug?

Steve

Yeah, absolutely.

David

"The Enthusiastic Employee: how companies profit by giving workers what they want", that's the title of the book, published by the Wharton School. The abstract various principles about what is good management of people, and I can get into some of those principles, but let me say this, that we find absolutely no evidence for generational differences. Now, people are always looking for change, reporters are looking, writers are looking for change, people who teach management development course, lecture management, looking for change. Why?—because you say something new then that's "news". In fact, we find no evidence of that, and nobody else has any empirical evidence about this Gen X of Gen Y or whatever the latest generation is, this is all pop sociology, with no relevance and no empirical basis. A book was published recently by Jennifer Deal called, "Retiring the Generation Gap". Again we are gathering data that indicates very clearly that there is, as I said, this generational difference stuff is baloney. Every generation looks at the next generation and likes to disparage it in some way – they are not as hard working as we were, they are not as loyal to the company as we were—this is a different generation, we just don't find any evidence.

Steve

As you were talking, I was thinking about, I'm feel fairly sure it McClelland's famous motivational research, where he talked about basic needs that everyone has, and there was the need for security, which I think is the equity thing, people want to have some sense of control over their life, even their basic needs are being met, need for achievement which is opportunity, and need for affiliation, which is camaraderie, which was research done in the ‘50s and ‘60s on basic motives, and it sounds like you're saying, "Look—people just don't evolve that fast.

David

That's right, or evolve in terms of physical or physiological evolution, they haven't in 30 or 40,000 years. Now, there are cultural differences, but I'm telling you we've also studied workers in countries around the world, and we find very little difference. There used to be the myth, they used to talk about the "authoritarian Germans", and the Germans have among the most democratic work practices, management style, as do the Japanese as we know, because we learned a heck of a lot from the Japanese about how you should manage people in a way that causes them to want to work and work hard, and it doesn't have to do with authoritarianism, it has to do with treating people as mature, responsible human beings.

By the way, I should say that I am generalising obviously, you always have a percentage of a workforce that is different than what I am saying, like the need for achievement. People do want to work, do what to be proud of what they do, that applies to about 95% of a workforce, you have 5% who, when they get up in the morning, break out in hives, because basically they're allergic to what they are going to have to do that day, they're allergic to work. So we know, for whatever psychological reasons, we know that there are some people that, what I am saying it just doesn't apply to, and the only way to deal with those people is sternly; of course the best way to deal with them is not to hire them in the first place. That's a very small percentage of the workforce, what tends to happen with many managers, as I indicated previously, they generalize from that 5% to the other 95%, because many mangers believe that in fact there are very few people who want to be proud of what they do, "They just want to go home at night" is their view, and I am saying it's precisely the reverse, because if you believe that most people want to do that, as I say, then you start behaving in such a way that in fact people are not proud to be there because of the way they're treated.

Steve

So managers probably end up managing by exception, they remember the employees that were difficult and then they start treating all employees, assuming they're going to be difficult employees.

David

Well, it's easier to give an order, and not want to hear any reaction from the workers than to really listen to these people, and I want to reiterate the companies that do this best, I want to reiterate a lot of it stems from the CEO and his/her view on what workers are like.

Steve

Do you, so I mean a point you have made very clearly is, what makes good management now? Is what made good management 30 years ago in terms of these basic needs and motives, the question I have is, do you think managers in general are getting better? It seems to me that there's a lot more discussion about the importance of treating people right, having more respectful work environments, best places to work—all these that didn't exist 25 years ago. Has that had a change in shifting management practices?

David

I believe it has, and our data over time, our firm was founded in 1972, so we have some data over time and I have accessed the survey data from before then as well, indicates some shift in a positive direction, because a lot of what I'm talking about, obviously, as I said earlier, is not new, it's not news. It has seeped into MBA courses and management development courses, people do talk this way. Also in America, the manufacturing is a much smaller percentage than it was of employment base in the country, and manufacturing tended to be among the worst offenders with regard to how you treat people, which is why, of course, unions developed there so early and so strongly, so there has been that shift. The hi tech companies by and large, again I want to be careful about generalizations here, tend to be more on the good guys' side than other kinds of organizations, although there are big exceptions to that, for example in call centers people are treated as in fact blue collar workers were treated decades ago, but overall I think there is an upward tendency, yes.

David

Yeah, the three goals remain the same broadly speaking, but let's say within the equity goal obviously. So much of what I say, by the way, I should preface with "obviously", because a lot of these things are obvious, and we start to try to be sophisticated in our theories and so on, and dilute really what is the obvious. Obviously, as now, and the economy is difficult and jobs are hard to find, job security becomes a terribly important goal. Do you know, when the hi tech boom began, let's say in the early ‘90s or late ‘80s, whatever, then everybody described this again as a new generation of people, that they don't care about job security as their fathers did. This is new, they are not depression babies, etc, etc. When we had the hi tech bust implosion, let's say in 2000, 2001, and the surveys showed that job security for these people went to the top of the list. Before they could walk across the road, if they were fired from one company in Silicon Valley, and get another job. That was no longer the case, and suddenly job security became important. It goes back to what you said earlier, or another Maslow, job security doesn't seem important until you don't have it, and then of course it is the most important thing for most people.

Steve

Yeah, as you are talking, I'm thinking about cars' fuel economy too, people buy these huge cars until gas prices go up, and suddenly the fuel economy becomes more important, and it is just back and forth and we're going through 1976 all over again, it seems like.

David

Yes.

Steve

Maybe we'll learn something from it as a society this time – maybe?

David

Don't bet on it!

Steve

So, I am sensitive to your time, first of all I really appreciate the insights that you bring and I think one of the things you talked about, some of these things are obvious. I think they're obvious when you point them out, but people keep forgetting them for some reason, so I think that it is really refreshing to sort of say, these fundamentals—don't forget them, don't get caught up in the current trend. Go back that you're managing people, and these are the things you need to keep first and centre—what really motivates them?

David

In our field, like so many other fields, are filled with fads, it's a fad every year, and this whole generational thing is one of our current fads, and we forget that people are people and have been for thousands and thousands of years, and so that we want to be very, very careful about "the latest" in terms of how people need to be managed.

Steve

Well, I want to put in another plug for your book, because it sounds like a great read, I know I'm going to read it—The Enthusiastic Employee"—is that...what was the full title again?

David

And the subtitle, and you can see where the subtitle comes from now—"How companies profit giving workers what they want".

Steve

That's definitely good news. The last question I have is, as the economy changes, or as different industries change, do you think people change in their focus on these different things about a concern for equity, a concern for opportunity and a concern for camaraderie? So for example, as the economy goes down, do you think people get more focused on equity?

Steve

Awesome. Well David, thank you so much—are there any final closing comments that you would like to make for our audience?

David

No, I don't think so, I just like to thank you for inviting me to talk on your program. I assume that there are people who are listening to this that don't agree with me. I give lots of lectures and in almost every lecture there is somebody who, for example, on the generational thing just can't believe that in fact young people are no different today than young people were decades ago.

Steve

Well, I think on that point to our listeners, if there is someone out there who wants to come on and really argue the opposite view, I would welcome having that conversation. I certainly believe in giving equal airtime to different opinions, although I tend to agree with you, David, they're going to have take some convincing and some hard data to make me change my mind, but maybe that's just the generation—I'm a generation X, so I'm naturally cynical about everything supposedly.

Well, we've been talking to David Sirota of Sirota Survey Intelligence, and thank you again David, and hopefully we will have a chance to maybe have you back on People Performance Radio for a future interview, so thank you.

David

Happy to do it, thank you very much.

Jim

Thanks for that great interview, Steve.

Zoe

Hi, this is Zoe. Coming soon in the UK a new series of podcast interviews focused on talent in uncertainty. Tune in to find out more on how Cable and Wireless, Premier Farnell, LloydsTSB and the Lancaster Hotel Group are using SuccessFactors to address their business challenges.

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