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3 Reasons Why All Employees Must Be Company Strategists

Recognize This! – Strategy can only be executed by those who intimately understand strategic objectives and their role in it.

Strategy is one of my passions. I’m fortunate that helping clients formulate strategy is also my job. Indeed, my title is Vice President, Client Strategy and Consulting. I greatly enjoy my work helping organizations of all stripes develop a strategy for proactive management of their company culture. Yet, I also believe that everyone is (or should be) strategist in their organization.

Two pieces on strategy I read last week helped me coalesce my thinking. First, from Strategy + Business comes the ideas of Cynthia Montgomery, Timken Professor of Business Administration and former chair of the strategy unit at Harvard Business School. The article describes Montgomery’s approach to strategy this way:

“When you look at strategy as a frame of mind to be cultivated, rather than as a plan to be executed, you are far more likely to succeed over the long run… To Montgomery, a business strategist is not primarily an analyst of position, or of resources; nor is the strategist purely adaptive, responding reactively to the vagaries of fate. He or she is someone who engages in a conversation about the purpose of a company. The company rises or falls on the quality of that conversation and the way it is used to make decisions about the ongoing work of the enterprise.”

Then, this article discussed the results of a survey of employees to see how many could identify their own company’s corporate strategy when presented with options that included the corporate strategy of their competitors. Employees failed abysmally.

“Overall, we found that only 29.3% of employees could correctly match their company to its publicly espoused strategy… There’s no doubt that training matters. Firms with more direct training initiatives seem to have employees who are better able to recognise what the firm views as its goals. What matters most is documentation that outlines clearly how more vaguely articulated strategies are to be implemented — note that these are not mission statements, statements of value or codes of conduct but actual ‘how to’ manuals.”

I see three new ways to rethink corporate strategy in these articles:

1) Everyone must own the company strategy for the company to succeed.

People who feel ownership over their own direction and personal success are also more committed to helping realize desired outcomes. “Strategists” must not be envisioned as a lofty position that all do not have some sense of direct, personal contribution to.

2) Strategy must be an ongoing conversation, not a point in time.

Three and five year strategic plans have a role, but often fail when those plans are codified, introduced, then never mentioned again. Strategy must become part of the daily effort and understanding of the work.

3) Strategic ideas must be made concrete in daily tasks of all employees.

Employees need to understand how their daily efforts contribute to achieving the bigger strategic objectives. After all, if their work is not aligned with the strategy, why are they doing that work in the first place? Help employees understand how their efforts contribute to the strategy by recognizing and rewarding them very specifically for efforts that reflect, reinforce or help achieve strategic plan.

I can already hear the arguments: “But don’t we need doers, not just thinkers?” I argue we are all must better doers when we know the thinking behind our actions. Or in the terms of the researchers in the second study I referenced:

“If we are to avoid employee cynicism and truly motivate individuals to do well for both their companies and our society, then managers need to work harder not just in crafting these strategies, but ensuring employees have the enthusiasm and instruction to implement and execute them as well.”

Do you know your company’s strategy and, critically, how you contribute to its achievement every day? What percentage of people in your organization do you think could correctly select your strategy from among your competitors?

Top Retention Strategy: Strategic Employee Recognition

Recognize This! – A culture of recognition is one of the most powerful means of retaining top talent.

In the last few months in my travels to lead workshops with clients and to present at various HR and strategy conferences around the world, I’m hearing a repeated refrain about employee retention. In my (admittedly unscientific) survey of these large, global companies, the importance of culture as a main component of a retention strategy is once again rising to the fore.

Some companies have maxed out their compensation and cannot compete for talent based on pay alone. Others know the only real difference between what they have to offer top talent from the competition is the strength of their workplace culture as an exciting, innovative and appreciative environment. Or, as a recent Chief Executive magazine article put it:

“If the trend of rising company earnings is any indication, the momentum is likely to continue. For employers, that means what it always has: an uptick in competition for the best talent. At the same time, barely out of the recession, companies can’t yet afford to make huge investments in salary increases or large bonuses. By developing employee recognition programs, employers can improve—in some cases dramatically—employee engagement levels, retention and performance. ‘Employee recognition is a potentially very low-cost engagement driver that can have a very, very significant impact on financial performance,’ says Ken Oehler, global practice leader of engagement at human resources consultancy, AON Hewitt.”

That’s the power of strategic, social recognition done right – it’s the fastest, most cost effective way to impact employee engagement and retention. Indeed, some of our clients have realized double digit increases in engagement and retention in months, not years.

How is this possible? It’s not just telling employees “thank you.” It’s going much deeper and telling people very specifically how they and their efforts demonstrated a core value while helping to achieve strategic objectives. It’s giving employees context for the value of their efforts within the bigger picture. We all seek greater meaning in our work. Sometimes, we just need to be reminded what it is.

And when it’s done right, the benefits are stark. AON Hewitt’s Oehler continues:

“Oehler recently studied the relationship between recognition and engagement and found evidence of a strong connection. For starters, when employees were asked to name their top drivers of engagement, recognition came in at No. 2, well ahead of pay at No. 5. Aon also looked at the lag effect of engagement to sales growth and found that companies with above-average engagement scores correlated with 19 percent sales growth vs. companies below the norm on engagement, which reported only 6 percent sales growth.”

How do you differentiate your organization to ensure your top talent never want to leave?

An “Effective” Culture Is in Your Hands. What Are You Doing about It?

Recognize This! – All employees own the company culture because their daily actions and behaviors impact how the culture is experienced by themselves and others.

Culture. I write about it all the time, yet I never seem to unpack all the myriad facets of culture. Just think about all the different ways the word itself can be use:

A “cultured” person – one who carefully monitors their own behaviors so that they align with the best expectations of the environment they are in
Cultured pearls – a thing of beauty created by human intervention into a natural process
Ethnic or geographic culture – the traditions, behaviors and even expectations of a people group as defined over a very long period of time
Company culture – “the way we do things around here.”

I think that last one is lazy phrasing for a profound idea. Indeed, company culture is far more than an idea. It is perhaps the combination of my three prior definitions. It is certainly shaped by human intervention and influenced by traditions and behaviors of the many over time. And yet it is the daily, individual choices about personal behaviors and actions that can dramatically (and subtly) shift a company’s culture quite quickly.

Culture became top of mind for me again this week after reading this post in the Harvard Business Review (HBR) Blog. Author John Coleman unpacks the six different key factors of culture (Vision, Values, Practices, People, Narrative, Place) with which I agree wholeheartedly. Company culture is all of things and can be changed at the drop of a hat if any one of these things is changed in a demonstrable way.

Yet it’s the statistic right in his opening paragraph that grabs my attention most. (The stat comes from this article):

“Effective culture can account for 20-30 percent of the differential in corporate performance when compared with ‘culturally unremarkable’ competitors.”

“Effective” culture – that’s a key driving factor in corporate success. John’s key factors of Vision, Values, Practices, People, Narrative and Place are indeed the forces behind an effective culture. But do not make the mistake of putting the creation of an effective culture on the shoulders of leadership alone. We all – all employees within an organization – own the company’s culture. Every person’s actions that reflect the values (or don’t) and contribute to achieving the mission (or hinder it) shape the culture in a new way every day.

The more important question for leaders is: How are you enabling every employee to own the culture and impact it on a daily basis? What are you doing to ensure every employees knows the vision, understands the values, and knows what “practice” they can implement in their own work to achieve it?

Do you know how to do this in your own role? If not, what would you need to do so?

2 Factors Critical to Building Trust (and Engagement) at Work

Recognize This! – Managers must be willing to engage in the difficult aspects of managing others in order to help all employees achieve to their best ability.

As I continue to catch up on a backlog in my readers and research feeds, I’m seeing themes emerge. One is around the importance of trust for employee engagement. Employees who do not trust company leadership will not (indeed, cannot) engage as deeply in their work. They do not give their best efforts because they do not see the value and benefit of doing so.

Just a couple of key factors to building trust in the workplace jumped out at me.

1) Managers must be willing to have the hard conversations with low performing employees.

Many were surprised at recent survey that low performers are often more highly engaged than high performers. I was not, simply because low performers too often don’t know they are low performers. Therefore, they are quite happily skating by at work. It’s the effect on the high performers who see their lower producing colleagues getting away with it that dramatically impacts trust in the organization. Or, as Mark Murphy, CEO of Leadership IQ (the company that did the survey behind these results) said, “It shows high performers that the organization is not a meritocracy.”

Managers must be willing to have the difficult conversations with low performers, not only to help them improve their own skills and productivity, but to also help build trust with top performers that leadership will do the right thing to reinforce best effort from everyone.

2) Managers must appropriately value employee effort as well as achievement.

Let’s be honest. Every innovative approach and thought doesn’t work. We know that to be true at Globoforce where our core values are Respect, Imagination, Determination and Innovation. The four together drive our success. While it’s all well and good to imagine new ideas and approaches, unless we have the determination to see them realized and the respect for each other as we do, we will never truly deliver the innovation that pushes our industry ever forward.

And yet, part of that approach means we sometimes imagine something that doesn’t work as expected. But we can always learn something from that effort and apply those learning to continue to imagine and innovate. That’s the determination needed to keep moving forward. Without validation of and respect for the effort and encouragement to find the lesson (even in the failure) and move forward, employees would lose trust in our values and our goals as an organization.

What other elements are critical to building trust?

What Does “Meaningful Work” Really Mean?

Recognize This! – Only the employee can define what is meaningful work to them. Leaders, however, are critical for helping them catch the vision.

Yesterday, I wrote about the importance of engaging in meaningful work for employees. But what, exactly, does “meaningful work” mean? As I was catching up on my (admittedly large) backlog of news and blogs in my reader, I found this nugget from the Switch & Shift blog (which is rapidly becoming one of my favorite daily reads):

“Managers cannot make work meaningful for employees. Managers, however, can shape the workplace environment to let meaningful work become possible for employees. With a context set to let meaning be experienced, employees can leverage the environment to derive meaning from their work.

“Meaningful work is vague. What exactly is it? Assuredly it begins quite selfishly. But this is out of necessity. For work to be meaningful, it is the employee who must label it so. This requires a belief that meaningful work is a desired outcome from managements’ actions. And employees believe managements’ intentions and see actions aimed to let meaning emerge.”

This reminds me of the possibly apocryphal story of the senior military leader touring NASA Space Center during the early days of the space race. The leader noticed a janitor cleaning an area of mission control and asked, “What are you doing?” The janitor didn’t reply with the obvious, “I’m sweeping the floor.” No, he said, “I’m helping to put a man on the moon.”

In this story, the employee knew and understood the greater purpose of his efforts. Keeping a neat and clean work environment would help to eliminate distractions for the scientists and engineers in mission control, thereby helping to contribute to the greater space mission. This employee knew the meaning of his work.

Personally, I don’t lead a group of strategy consultants. I help companies change their cultures to ones of appreciation and recognition.

What do you do for work? What’s the real meaning of your work?

3 Tips to Become the Manager Employees Never Want to Leave

Recognize This! – People leave bosses, not companies. Good managers make sure their employees succeed before themselves.

We’ve all heard the truism that people quit managers not jobs. If retention of top performers and key talent is a priority for you, then one of the first places you should look for improvement is in the relationship between managers and employees. This recent article, for example, points to a recent survey showing 20% of people say their bosses hurt their career. Half of employees, on the other hand, said the boss had a positive impact.

The article goes on to share common advice we’ve all likely heard before: End micro-managing and help bosses learn the art of delegation. Help bosses feel secure in their role and the importance of leading a team so they are confident and comfortable in giving team members credit where credit is due instead of snatching it for themselves.

While that advice is quite true and valuable, I’m far more interested in why these managerial tactics work. It all boils down to these three points (supported by reams of research conducted by Teresa Amabile and Steven Kramer in The Progress Principle).

Employees need meaningful work.
Busy work kills the spirit. Yes, some work tasks are menial, repetitive and just have to get done. But doesn’t mean they aren’t meaningful. Good managers help employees see the greater value of even the most menial, repetitive tasks. Help your employees see how their efforts help move the greater mission forward.
Employees need to make progress in meaningful work.
But meaningful work isn’t enough. Employees also need to know they are getting somewhere. Good managers cast a vision for the future and help employees see where they are on the path to achieving that vision. Help employees see forward progress toward big goals by recognizing them for smaller achievements along the way.
Employees need recognition of efforts and achievements that make an impact.
All of this boils down to employees’ need for recognition. Don’t misunderstand me. This is not a grab for another trophy or a gold star. Employees simply need to know what they do matters within a bigger picture. Indeed, our Spring 2012 Workforce Mood Tracker survey showed 78% of employees said they would work harder if their efforts were better recognized.

Instead of micromanaging, micro-appreciate. Hone in on what your team members are doing and recognize smaller achievements and progress towards bigger goals. Instead of snatching credit for yourself, be the one to give credit to your team for success and let the entire company see how much you all achieve together.

What other attributes do you see in good managers? What made your best manager so good?

Useless Unless…

Recognize This! – Don’t forget the key ingredients to employee engagement and excellence.

I’ve written a few blog posts in the last couple of months where I noticed I used these two words in conjunction – Useless Unless. Two little letters of difference, yet a tremendous differentiator.

Think of the ramifications in real life:

The fastest car in the world is useless unless you put fuel in the tank.
The best education is useless unless you put it to work.
The most talented basketball player is useless unless you give him a basketball (and committed team) to play with.
An incredibly delicious dinner party is useless unless you have friends and family to invite and share it with.
Talented, high-potential employees are useless unless they know the end goal and how to help achieve it.

What’s missing that’s most important? “E”

Encourage – We need encouragement at work. Encouragement isn’t just something to be given in tough times, but also to let people know they’re on the right track – their work has greater meaning and purpose in achieving the bigger picture.
Extoll – Don’t forget the praise. Recognize people when they go above and beyond. Shout their achievements and contributions from the rooftops. Make sure they know their efforts are noticed, appreciated and valued.
Engage – If you Encourage and Extol, you’ve taken a giant step forward in creating a work environment in which people choose to engage. And engaged employees are more productive, more easily retained and more beneficial to the bottom line.

What else is useless unless… ?

3 Lessons for Employee Engagement through Recognition from XL Axiata

Recognize This! – Learning from others’ success can enhance our own efforts for engagement.

I enjoy Abhishek Mittal’s Mumblr blog. Abhishek is a senior consultant for Towers Watson based in Singapore. Recently he shared a case study on XL Axiata, an Indonesian mobile services operator and division of Axiata Group. In the case study, Xl Axiata explains four key steps they took to create an engaging work environment for employees, including a Performance-Based Culture:

“XL Axiata knew that if it wanted the employees to display the right behaviours, it had to recognize and reward these behaviours. The leaders shaped a culture where people and performance are talked about in the same breath. Employees who were creating value for the company were being recognized through company-wide emails and there was a focus on celebrating small successes in the long journey to achieve the vision. It also placed a higher emphasis on differentiating rewards based on performance. Mittal says,These initiatives helped employees build a clear line of sight to the company goals and sent a clear message that the company values high performance above everything.”

From this one focus alone, I see three clear lessons for employee engagement:

Recognize and Reward the How not just the What
Results (the What) can be achieved in many ways, not all of them positive (think Enron or any of the other recent scandals were the end was more important than the means). By focusing recognition and rewards on the right behaviours, XL Axiata is reinforcing that how the work is accomplished is as important as what is accomplished.
Celebrate progress on the way to the big win
While everyone must understand and work toward the ultimate vision and “big win,” small successes and progress along the way make the big win ultimately possible. Research conducted by Harvard Business School and reported in the book The Progress Principle by Teresa Amabile and Steven Kramer proved the single greatest motivator for employees is making progress in meaningful work. Doing so increases engagement.
Offer multiple, differentiated awards
Recognition and rewards must be differentiated based on several factors including level of effort, contribution and results achieved. Offering the same level of recognition to someone who came up with an innovative idea that could transform product direction as you also offer to someone who contributed as part of a team to a lesser initiative merely serves to demotivate those who achieve great ambitions. Offering differentiated awards (awards at various levels) ensures both proper recognition and reward activity as well as eliminating any concerns around recognition becoming expected or run-of-the-mill.

What major initiatives has your organization undertaken to encourage employee engagement?

Strategic Employee Recognition Critical to Strong Manager/Employee Relationships

Recognize This! – Gallup research shows “best” managers empower, recognize and communicate with their employees regularly, supported by an effective performance management system.

If present trends continue, this week’s series of blog posts may be an ongoing theme of “isn’t that obvious?” Yesterday, I shared results of the Parnassus Fund (consisting of companies that treat their employees well and with respect), which performs consistently better than the S&P. Today, I’m sharing about Gallup research showing the manager/employee relationship is critical to employee engagement.

I’m sure we’ve all uttered the truism: “People leave managers, not companies.” This is the research to back it up as featured in an Incentive magazine article:

“A new article from Gallup researchers points to the pivotal role that the employee-manager relationship plays in driving the performance of companies. Drawing on data from more than 50,000 employees across 10 major industries, the analysts found that while effective engagement and recognition programs are key to a company’s success, strong relationships between managers and their subordinates are the key factor in making those programs work.”

Breaking this down further:

70% of employees giving managers a “best” rating also ranked the company’s recognition and engagement system as very good (vs. only 5% who rated managers as “best” also saying recognition programs were poor)
85% of those rating their manager as “below average” said their recognition programs were poor

Call me an optimist, but I really believe the vast majority of managers want to do right by their employees. They want to facilitate excellent work and help their employees in the best way possible. Yet, why do so many fail? I also believe we don’t equip managers with the tools they need to be the best managers they can be.

Managers know they need to recognize and reward employees for exceptional effort. Perhaps they’ve even received training on this management philosophy. But have you given them the tool and process needed to not only recognize employees, but to do so in a meaningful, personal way tied to what matters most to your organization (demonstration of your core values in contribution to achieving strategic objectives)?

Desires and objectives without a means to deliver are nearly useless. Empower your managers to be the “best.”

Perform 4% Better than S&P – Engage Your Employees

Recognize This! – Companies that treat employees well outperform the S&P Index.

Creating a work environment in which employees choose to engage directly impacts the bottom line. Companies who treat employees well have returns at least 4% better than the S&P Index, year after year.

That’s a bold statement to make, yet the results are proven directly in the US Stock Market. Companies in the Parnassus Workforce Fund (as explained in this Fast Company article) include many of the “100 Best Companies To Work For” as well as others that “genuinely cared about their employees as people, not just hired hands.”

The results are indisputable In eight years, the fund has had a 9.63% annualized return (as compared to the S&P Index earnings of 5.58% in the same period). Moreover:

“Another compelling statistic buried in the Parnassus prospectus: Over the past five years–the height of the Great Recession–the average annual return on the Workplace Fund was an incredible 10.81%. The S&P Index for the same period was just 3.97%, a 6.84% difference. [James] Dodson, [founder of Parnassus Investments and portfolio manager of the Parnassus Workplace Fund], believes the wide gap in performance is easily explained: ‘I think what happens when you have a contented workplace, people are willing to put out more effort to improve operations during really difficult times. While I think every organization has their ups and downs, the downs are not as pronounced because everybody pulls together to try to get through the crisis. And, of course, this consistently more engaged performance inevitably reveals itself in the firm’s bottom line.’”

Employee engagement matters. Caring about employees as people and not just human resources makes a tremendous difference to organization success. What can you do?

Give them something to believe in and strive for.
Make your mission and values more than just a statement. Make them integral to what every employee does every day in their own, unique, job roles and functions.
Recognize and reward them for significant accomplishments and behaviors.
Help employees understand when and how they personally contribute to achieving the mission while living the values by recognizing and rewarding them for doing so – frequently and in a timely way.
Empower them to be the caretakers of your culture.
Show you trust employees by encouraging them to also recognize and reward peers and colleagues when they see others living the values and achieving the mission. The culture must be owned by all to be relevant and real to everyone.

Do you believe in the power of employee engagement to drive bottom-line results?

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