Our previous post referenced recent research indicating that the percentage of engaged workers in the U.S. has risen this past year, and that the primary reason for this increase is that organizations have made positive changes in how they develop their employees.
Carrying that thought a bit further, leaders at all levels within an organization must also be developed in order to bring about sustainable change and improvement. We have always known that it is a person’s immediate supervisor that has the greatest impact on their work experience and engagement level, so it stands to reason that these leaders must be trained and developed so that they can be effective.
To develop strong leaders, we have found the following five steps are critically important:
Training is an ongoing step. Leaders at all levels must understand leadership styles and how to diagnose the circumstances requiring leadership so they can apply the most effective style. Related skills and behaviors also include communication and listening, motivation, delegation, recognition and empowerment.
360° feedback from peers, staff members and upper management is a popular and insightful component of leadership development.
Coaching in a team environment is an ideal place in which to exercise and improve peoples’ leadership skills, self awareness and ability to build upon strengths.
Individual mentoring can help people analyze personal effectiveness and refine their approach based on actual performance and achievement. Mentors should observe leaders’ performance and conduct personal debriefing sessions. This cycle continues until desired skills and performance levels have have been achieved.
Accountability. All leaders are held accountable for their personal development as well as for developing others.
One of our white papers shares the concept of CPI2, which refers to the combination of Continuous Process Improvement (CPI) and Continuous People Improvement (CPI) as an effective way of boosting both employee engagement and productivity. It is based on the premise that productivity is the key driver of employee engagement (or the employee experience), as people like to feel successful… they like to be part of a winning and productive team… and they like to feel their work is important.
More recently, the concept of CPI2 has been indirectly referenced in an article published by Gallup, which reveals that employee engagement levels reached an all-time high in 2019.
According to their research, the percentage of “engaged” workers in the U.S. reached 35% this past year. While 35% might strike you as a low number, it is actually a new high since Gallup began tracking the metric in 2000.
This increase in engagement levels is good news for all of us…
As you may know, engaged workers are highly involved in their work. They go about their work enthusiastically, they treat customers better, they make a stronger discretionary effort compared to their dis-engaged co-workers, and they are committed to both their work and workplace.
So clearly, the increase in engaged workers is good for employers.
But this increase is also good news for employees and other stakeholders! It’s good news because it shows that the more formalized plans for engaging people are working; it’s good news because it means more people are finding greater levels of fulfillment in their work. As Dr. Deming said, “Management’s overall aim should be to create a system in which everybody may take joy in his work.”
So, it’s also fair to say that this increase in engagement levels is good news because it bears witness to the fact that the process of workforce engagement can yield win-win outcomes for both employers and employees.
Why the Increase? If you’re wondering why the number of engaged workers has risen, Gallup has a straightforward answer.
“There are several possible explanations for the changes in engagement over the past decade,” the article states. “…and Gallup has reviewed many of these previously, from changes in the economy to slight improvements in some employee benefits. But these factors are not the primary drivers of improved engagement.
“Gallup research indicates that changes in employee engagement are best attributed to changes in how organizations develop employees.“
The article also shares four themes that Gallup’s research identified in organizations with high-development cultures:
High-development cultures are CEO- and board-initiated.
High-development cultures educate managers on new ways of managing — moving from a culture of “boss” to “coach.”
High-development cultures practice company-wide communication.
High-development cultures hold managers accountable.
Room for Improvement & CPI2 However, the article also goes on to acknowledge that a 35% engagement percentage is still low.
“The percentage of engaged employees in the U.S. is still far too low,” the article states. “There is plenty of room for improvement… What would the world of work look like if organizations could double the percentage of engaged workers? This isn’t a pie-in-the-sky question — all evidence suggests it is possible. Organizations have been successful, over recent decades, in maximizing process efficiency through Six Sigma and advances in technology and automation — doubling engagement would mean U.S. organizations have matched process efficiency with people efficiency.”
A young, seemingly fast-rising junior executive had been working at a large bank for just over six years. When he was asked about his job and how he felt about it he said, “The job’s OK.”
His lack of enthusiasm was evident, and when pressed to say more he added, “Well, I’m not really learning much anymore.”
When asked if he was fully-engaged he said probably not but went on to say that he still did a great job. “I still give 100% and consider myself to be a great employee,” he said. Then, after a short pause, he added,” But I don’t give them 110%… and there’s a big difference between 100% and 110% — at least for me.”
When asked if he was out looking for a new position he responded, “No…, but I’m listening.”
When asked whether he told his boss about how he was feeling he said, “Yeah, but….”
How many people in how many places feel like he does? He is bright, educated, skilled, well-liked, and might be an ideal candidate for a senior leadership position…if he stays.
But is he being made to feel like an important part of the team? Does anyone realize that he could be giving more? Is he being engaged in an intentional or formalized fashion?
Among the many documented advantages of an engaged worker are loyalty and the discretionary effort that they put forth; going the extra mile; the above-and-beyond attitude… giving 110%! How many innovative ideas might that extra 10% yield? How much more productivity? What impact might it have on customers or coworkers?
The Real Cost of Disengagement
And if he doesn’t stay, the simple replacement costs are not the real issue. He is a potential super-star! He is a known-entity… trustworthy, dependable, low-risk. What are the real (or hidden!) costs associated with disengagement; the costs of not getting 110%… the costs of not only lost workers, but also of lost opportunities?
We’ve had some fascinating conversations about performance management over the years, and have found quite a range of formal and not-so-formal approaches, along with variations in defining the process.
But while different organizations may employ different methods, there are a few areas on which most everyone we’ve spoken with enthusiastically agrees:
Positive versus punitive performance management works best.
Recognition is an important element of managing the performance of individuals.
Management must manage the performance of both individuals and processes.
Regularly scheduled performance reviews or evaluations of individuals are key and should be conducted more frequently than once each year.
Performance evaluations need not be coupled with merit-based or time-based pay raises and, in most cases, are more effective if not coupled with pay raises.
How does your organization define and execute performance management?
As discussed in our previous two posts, “Rewards & Recognition” programs can vary in a many ways.
For example some are very inexpensive to run, and others are costly; some are geared toward recognizing individuals, while others focus on rewarding teams.
Similarly, the reasons for implementing a program can differ a great deal, depending upon an organization’s situation and objectives; and as our Partners in Improvement groups discussed, the outcomes — both intended and otherwise — can also vary.
During our Partners’ discussions three distinct types of programs were compared:
“After-the-Fact” rewards vs. “Defined Benefit” awards:
Some organizations conduct recognition and reward programs that are designed to ‘catch people’ doing the right things, such as a “caught in the act” program that recognizes individuals by posting a card describing their accomplishments on a wall in the lunch room, or a “Bravo” program for peer-to-peer recognition, where recipients are awarded small gifts — in the $5-10 range. These systems are designed to encourage certain behaviors and accomplishments — but an individual may or may not
be one of the lucky ones ‘caught.’ Not every worthy act is rewarded, but the belief is that the program reinforces the
desired behavior overall.
Alternatively, some awards are planned in advance, such as an organization that gives one day off to everyone after every 250,000 hours without a lost time accident, or another program that promised a raise to all employees if first pass yield metrics were achieved. Along the same lines, one organization implemented a partially-defined reward: the reward was defined, the criteria were defined, but there would be only one winner and the identity of that winner would remain uncertain until the end. This prize, in this case, was a one year lease on a BMW for the manager with the best results. The success of this program depended on being well-hyped in advance so that every manager improves his or her results in order to try to win. However, the size of the prize being so significant caused some dissatisfaction among some of the managers who didn’t win.
Conclusions: both the individual and team concepts are effective. If a “one winner” approach is taken it is best to keep the value of the single award on the lower-end as opposed to awarding one “big” prize such as the above-referenced car lease.
Team Awards vs. Individual Rewards:
The primary advantage of individual recognition is the precision of being able to reward and recognize a person who best exemplifies the behavior that the organization wants to encourage. Consider that, on any team, there are bound to be stronger and weaker contributors. The weaker contributors on a strong team are, perhaps, unfairly recognized for contributions they may not have made. Furthermore, the stronger contributors to a weak team are unfairly under-recognized and may become less motivated. Individual rewards and recognition enable organizations to reward the people they believe most deserve it.
However, often the success of an operational or project team as a whole is far more important to an organization’s success than the actions of individuals. Recognizing operational teams as well as temporary teams for their contributions encourages effective teamwork, helping one another to get further faster. It takes a mix of talents and personalities to build an effective team and while a team may have one or two stars, the success may also be due to the down-to-earth individual who keeps the group focused or the individual with the easy personality that defuses tensions and egos in order to keep the group working effectively. Our research into employee engagement suggests that being viewed as an important member of a team is also very motivating. Indeed, in Daniel Pink’s book Drive, The Surprising Truth About What Motivates Us, he describes the pleasure people receive from being part of something bigger: a team, a movement, a purpose.
Conclusions: While the benefits associated with individual rewards were recognized, the vast majority of our Partners expressed strong support for the benefits of team rewards and recognition.
Intrinsic vs. Extrinsic Rewards:
Intrinsic rewards are those that strive to produce a sense of appreciation, belonging, satisfaction or contributing to a higher purpose. Some rewards are free, such as a thank you note, a parking space, or putting a person or team’s picture in the newsletter. Some intrinsic rewards may cost the giver something,
such as buying a team lunch, giving everyone a day off, and making a contribution to a charity of the person or team’s choice, but these rewards are non-monetary and are not designed to appeal to a person’s acquisitiveness. Rather they emphasize the organization’s appreciation for a person or team’s contribution.
By contrast, monetary rewards have a simple and clear cash value for the recipient. For example, a grocery chain gives $50 to any individual accumulating six ‘stars’ which are awarded by coworkers or customers to recognize exceptional service. The main advantage of monetary rewards is that, whether the amount is large or small, public or private, before or after
the fact, one can expect that all recipients will value the reward because the recipient can spend it however they choose.
Conclusions: While appreciating the clear nature of extrinsic rewards, nearly all of our Partners had a cautionary tale about unintended consequences; and the bigger the reward, the bigger the problems. Unlike rewards aimed at intrinsic motivation, the problem with extrinsic rewards was not that they might fail to influence the recipients, but rather that the outcomes were often entirely different than intended. For example, the organizations that implemented large monetary rewards, such as the BMW lease, found they attracted attention and inspired avarice as intended. Many people really wanted to win them. In fact, a good many people felt they deserved to win them. The unintended results included resentment, accusations of unfairness, and powerful disincentives for people to help one another to raise the overall performance of the organization. Team morale took a serious hit as well. As one of the Partners put it, “An extrinsic reward seems to create 1 winner and 99 losers.”
Ultimately, our Partners agreed upon a list of best practices, which we will share in our next post.
As you may know, in 2015 the International Organization for Standardization (ISO) issued an update to its widely followed 9001 standards.
This update was not, at the time, officially part of the 9001 standards, but it included the addition of new Quality Management Principles outlining, according to an Engagement Strategies Media (ESM) article, the fundamental conditions necessary for an organization to sustain high levels of quality and performance.
The Quality Management Principles are:
Customer focus
Leadership
Engagement of people
Process approach
Improvement
Evidence-based decision-making
Relationship management
As noted in the article, these principles focus on both “process” and “people/engagement.” As the article goes on to suggest, this balanced focus is clearly necessary to achieve and sustain high levels of quality and performance.
An earlier post summarized the real costs associated with disengaged workers, which is close to $500 billion per year based on research by glassdoor.com, the Enterprise Engagement Alliance (EEA), and others.
Wow!
Fortunately, there are proactive steps that can be taken to avoid these costs and the collateral damage to team morale and brand that is a regular side-effect.
Based on research and data shared by the EEA and The Chartered Institute of Personnel and Development, the following five steps can drive employee engagement, and reduce the number of disengaged workers and the associated costs:
Enhanced recruiting and on-boarding — The first steps involve the inclusion of the organization’s mission and vision into interviewing conversations, and a more conscious effort to identify and hire people with aligned goals. Adding a mentor program to the on-boarding process helps new hires assimilate
faster so they became more productive in less time as well.
Enabling people to achieve higher levels of productivity and success early-on promotes greater engagement levels, and reduces first-year attrition rates. Early churn tends to demoralize
everyone, so in addition to reducing re-hiring and re-training costs, the costs associated with negativity within the existing workforce are also reduced.
Consistent performance management and communication — People need to have meaning in their work, and understand how their work aligns with organizational objectives. This communication works best when systematized as part of structured, proactive approach to performance management.
Learning and development — A young, fast-rising junior executive had been working at a large bank for just over six years. When he was asked about his job and how he felt about it he said, “The job’s OK.” His lack of enthusiasm was evident, and when pressed to say more he added, “Well, I’m not really learning much anymore.” He went on to confirm that he was not truly engaged, and that he did not make much of an extra or discretionary effort, which engaged workers regularly make. Forward thinking
business leaders understand that the path to sustainable employee engagement is to drive productivity, and to do so through ongoing education and empowerment.
Recognition and rewards — Recognizing and rewarding employees is not a new concept, but if the goal is to engage people rather than simply acknowledge milestones (such as length of service), then the approach must be aligned with what is meaningful to each recipient.
Flexibility and work/life balance — Employer/employee relationships, expectations, and engagement criteria have evolved significantly over the past decade. Data from a PwC survey of 44,000 workers who had become less engaged indicated that “71% said their jobs interfered with their personal lives, and 70% said they wanted to be able to work from home.”
Employees can also become disengaged when they feel their managers only care about the bottom line. More than one-third of U.S. employees (39%) don’t believe their bosses encourage them to take allotted vacation days, and almost half (45%) say their bosses don’t help them disconnect from work
while on vacation, according to a Randstad survey.
While identifying the right things to work on and using the right tools are critical decisions we must make each day, we must also have the right people with the knowledge and skills working on the right things if we are to truly achieve breakthrough solutions.
Taking an objective overview of employees’ capabilities, strengths and needs on a periodic basis can help us recognize both the strengths to build on and improvement areas for training and coaching.
As part of the employee capability assessment process, it’s best to use a strategic mixture of one-on-one and small group interviews to cover a diagonal cross-section of the organization.
Generally speaking, the objective is to talk with people about the organization, how they are treated and valued, and assess their level of engagement. Meeting with key people who manage and work in various areas is also crucial, as is seeking to understand how the organization’s strengths can form the basis for the creation of a systemic continuous improvement process.
It’s rare to find a business organization of any substance
that has not implemented at least some type of improvement initiative in their manufacturing, administrative, or service sectors, whether it be the Conway approach, LEAN, Six Sigma, and so on.
But, as noted in a previous post, not as many have defined a sales process, nor have they taken the hunt for waste and the quest for continuous improvement into the realm of sales .
Selling is a process. The basic principles of work and process improvement certainly apply, and, just as these principles have brought about measurable gains in other sectors, so too, if properly executed, can they help those in the selling arena learn how to contribute more to the overall enterprise; how to work smarter, faster, and with more success.
These principles might also help a sales team stand out from the competition due to more effective execution.
By teaching the basic principles of studying, changing, and improving work and work processes to sales professionals, an organization can empower them to help themselves and the enterprise realize major (breakthrough!) accomplishments, such as:
Communicating at a higher level with customers
Gathering the “voice of the customer”
Interacting more harmoniously with internal customers
Selling more in less time
Managing key accounts more effectively
Increasing margins
As sellers learn more about the effects of continuous improvement, they will become better at translating the company’s true value-added message. They might even help to develop it!
As they become more educated and enthusiastic about the relevance of simple statistics, variation, and waste reduction, it’s likely that they will also become more effective at uncovering and expressing true customer needs.
And finally, a sales force so educated will more readily recognize the advantages of incorporating all of these principles into their daily sales effort. As a result, they will become more efficient. They will become more successful. Successful sales people stay on, sell more, and help the company grow more profitably.
Have you formally defined your organization’s sales process?
In other words, have you documented the specific steps you or your sales team must execute to move from identifying a lead to closing the sale?
If so, are they the right steps? Have you mapped the key objectives and activities for each step? How about measuring team performance on a step-by-step basis? Are people working on the right things? Have you identified the best opportunities for continually improving each step and, as a result, the entire process?
We’ve found that those who place a strong focus on these things are able to execute the sales process much more effectively and, as a result, enjoy a number of advantages, which include:
Consistent approach which can more easily be analyzed and continually improved, most often resulting in a greater competitive advantage
Common language throughout the organization, facilitating more effective strategizing
More consistent and diligent lead qualification, thus promoting efficiency and reducing waste
More precise definition of transaction status and progress, thus more accurate forecasting
More comprehensive need assessment, which promotes a consultative selling style and higher margins; better assessment also tends to bring-about a heightened responsiveness to customer needs, interests and priorities, and often yields larger average order size
Heightened ability to incorporate the voice-of-the-customer into organizational decision-making
Higher levels of conscious competence and team development
Shorter sales cycles
More natural closing
A better customer experience, as the “diligent” execution promotes differentiation
Challenges and best practices associated with continuous improvement
