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Enhancing Organizational Performance

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Why Improving Employee Engagement is not Strategic

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[tweetmeme source=”jeffreysaltzman”]Employee Engagement is often viewed as a magic bullet. All we have to do is increase our levels of employee engagement and all will be well. Is your engineering done poorly? That is because your engineering employees are not engaged enough. They would exceed your customer’s expectations if they were more engaged. Putting your stores in under-performing locations? That would not happen if your real estate people were more engaged. Are your customers unhappy with the quality of your products? If only you could make your sales people were more engaged. This kind of thinking is of course nonsense, but there is a deeper issue here.

Some, if not many organizations have bought into the notion that increasing employee engagement should be part of an organizations’ strategy. But that is like saying reducing an ill person’s fever should be the strategy to get them well, without addressing the underlying cause, like the tumor that is spreading rapidly in their pancreas. Maybe if we brought the fever under control that tumor would resolve itself? Not likely.

As we conduct employee surveys there are several distinct kinds of questions that are used to gage what is happening within an organization and how it is functioning. One question type is called an independent variable. These are items like “do you have the training you need to get your job done?” They are directly addressable if the response scores are low. Another question type is called a dependent variable, such as “I am proud to work for XYZ”. These kinds of questions are dependent on other things driving them high or low, such as, we were just caught up in a bribery scandal, so I am not so proud to work here. How would you address pride in that circumstance? While there may be other underlying issues, simplistically, you would address ethics in order to bring pride back to higher levels. There are other kinds of questions we use in surveys but discussing these two types will make my point.

Good strategy for an organization is strategy that is simply stated, easily understood and directly addressable. Good strategy could be thought of as independent variables. Is your engineering done poorly? Good strategy may be to upgrade or bring resources to your engineering group. Maybe you hire or maybe you acquire or maybe you outsource, but the hallmark of a good strategy is that you can directly address the improvement needed of the engineering function. The engineering employees will become engaged when they have what they need to do their jobs well, are treated in an equitable fashion, with respect etc.

A strategy that states, we will increase employee engagement as the strategy itself, is not directly addressable and does not give the management team any insight into specifically what needs to be done to accomplish that goal. Without insight into the direct strategic actions that must be taken you get warm and fuzzy words that are not directional and will be impossible to accomplish.

Having high levels of employee engagement is a good end result, but it is an end result of other strategic actions you take and is simply not strategic by itself.

© 2012 by Jeffrey M. Saltzman. All rights reserved.
Visit OV: http://www.orgvitality.com

Written by Jeffrey M. Saltzman

August 26, 2012 at 9:37 am

Sense of Direction

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[tweetmeme source=”jeffreysaltzman”] “You are going to have to help me with this people thing.” That was what the ex-McKinsey consultant turned CEO of a major Fortune company told me years ago. He was the nicest guy. He explained to me how he could handle all of the financials to run his company but this whole people thing, what motivated them, what concerned them, he just couldn’t get his arms around that. He was baffled. What to him seemed like simple business decisions, trim here, reorganize there, in order to fine tune his company’s financial performance resulted in all sorts of emotional morale issues. “Why didn’t people see the obvious?” He thought that there should be no emotions involved in financial business decisions, that if he did what was best for the company, to ensure its survival, that people should not mind (or at least not get emotional about) being moved around like pieces on a chess board, even if it meant losing their jobs. While this company had solid financial performance, it also had a fairly high degree of turnover, with some employees after a pretty short period of time feeling burned out and not being able to continue with the firm. Yet this company also had a high degree of employee commitment and employee loyalty. How was that possible?

I participated in a graduation recently. A group of MBA student’s to whom I taught a leadership class were graduating with their degrees in hand. It was extremely emotional in a positive way for the students, their families and friends that were present. The students were smiling from ear to ear and the parents were beaming. As each student came across the stage, amid the flashing of cameras, I rose shook their hands and congratulated them on their achievement. As each student passed me, I wondered “what direction will their lives now take?”

Sense of Direction. Having a clear sense of direction, a sense of mission regarding what the organization (an organization can be anything from a poker club to a nation state) is going to accomplish, and how people can personally and meaningfully contribute to that goal will affect one’s overall sense of well-being and happiness. It helps to increase a sense of purposefulness which in turn can greatly impact people’s sense of commitment and loyalty to the organization. Most people struggle with this, looking for a sense of direction and purposefulness for at least a portion of their lives, others struggle with this for most of their lives. For the newly-minted MBA’s, they are at an inflection point, where they will be examining the decisions they have made so far and will be reflecting on a host of choices they now have which will affect their own sense of direction and sense of purpose.

For an organization, clarity on this subject allows members to self-select, for if I don’t agree with the goals of the organization (stated or otherwise), or what the organization perceives as my role in helping it to achieve those goals, it is pretty clear, that if I can, I should leave. Over time, with a clear sense of direction (stated or otherwise), what an organization can achieve is a fairly tightly knit core of people who are extremely dedicated, ferociously loyal to helping the organization achieve its goals. And yes, there is a risk that too tightly knit of a group will put goal achievement and gain for this core above all else including societal or customer well-being, potentially bending or breaking various articulated operating standards, societal rules, regulations or laws. An inner core can arise, and as C.S. Lewis pointed out a long time ago, people will do almost anything to become part of the inner circle. As with everything there needs to be a sense of balance, swinging too far in any direction is generally not good for people, the organization or society at large.

Knowing where an organization is going, what it stands for and the values it will employ while getting there can be critical to actually getting there. Each person having a sense of direction and knowing how they can contribute to that direction is a fundamental building block for organizational performance and morale.

One aspect of sense of direction having a positive impact is movement, or the direction of the sense of direction. People tend to get frustrated with stagnation and get unhappy pretty quickly about what is perceived as a backward slide, even if that slide is relatively small and from a very high place or performance level. People notice and feel positive or negatively about the direction things are headed, oftentimes more than the absolute level of the measure suggests that they should.

For instance, as we have measured Employee Confidence over the years, what we see are increases and decreases in Employee Confidence on a national level that are related to the direction of a nation’s economy and not the absolute level of economic performance. Employee Confidence goes up if conditions (e.g. unemployment levels, GDP growth) are seen as improving and it declines if conditions are perceived as dropping, regardless of the absolute levels of those conditions. Employee Confidence can be very high in rapidly developing economies as people feel that conditions are improving and that their economy is on the rise, even if the absolute economic standards are pretty low. Likewise, Employee Confidence can be low in highly develop economies with high standards of living if economic performance is seen as in decline.

As humans, we tend to perceive events and make judgments on a relative basis and not on an absolute basis. What tends to becomes normal is relative to what we routinely experience. But every once in a while we are able change the standard dramatically when a critical mass of organizational members compares what they are experiencing to other extra-organizational standards.

Let me illustrate relative decision-making in a simple fashion. Say you needed a pair of shoes and had your eye on a pair that normally costs $300. You are prepared to spend $300 on those shoes. You open the Sunday paper and see that a store 40 minutes away across town has those same exact shoes that you have been thinking of purchasing for half-off or $150. Would you be motivated to drive across town to buy your shoes at half-price? Many people are inclined to do that. Now say you needed to purchase a new car. You are looking at a car that costs $27,900 at a new car dealer near your house. You are prepared to spend $27,900 on that new car by financing it with the bank and paying it off over 5 years. You open the Sunday paper and see that same exact car for $27,750 at a new car dealer 40 minutes away on the other side of town. Would you drive across town to buy that car? Many would say no. Yet in these two examples in each case the buyer would save $150 on the purchase price. You could use that $150 to purchase the same exact things, regardless of where the savings came from, 2-tickets to a Broadway show (partially obstructed view), or a hot dog at Yankee Stadium. Yet there is a tendency for people to be more willing to save $150 when it represents a larger portion of the purchase price, rather than when it represents a smaller percentage. We make relative and not absolute judgments on how worthwhile the savings are.

The same holds true at the organizational level. If organizational performance is seen as improving relative to where it currently is, employees tend to be more upbeat regardless of the absolute starting level of that performance and if it is perceived as in decline, employee spirits will also be in decline (even if you are still the best in your industry). So how could the CEO I mentioned lead a company that achieved high levels of employee commitment and loyalty, even as people were burning out? The answer is that it was an exciting place to be, they were cutting edge, an industry leader with rapidly rising levels of performance, beating the competition and with a clearly articulated vision of where the company was going.

© 2012 by Jeffrey M. Saltzman. All rights reserved.
Visit OV: http://www.orgvitality.com

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