Our Take: Building Engagement Culture
Building a high-performance company with engaged employees does not start with picking the right survey; it starts with having the right leaders. There are a wide variety of engagement/culture surveys on the market today, but the real key to having an engagement culture is the top team.
Based on our research and experience, the following key principles must be deployed to build an engagement culture:
align the top team through the development of a core purpose;
senior leaders embrace stewardship;
senior leaders practice feedback; and
senior leaders model caring and listening.
Leadership is about mobilizing self and others to attain a common purpose. The actions chosen to accomplish this are guided by a set of core values. Yet many companies lack the investment in establishing a common purpose and set of core values. Effective leaders use the principle of purpose to establish a direction that will motivate and capture the energy of those needed for success. In other words, they build engagement. There is no shortage of definitions for purpose.
“The organization’s fundamental reason for existence beyond making money- a perpetual guiding star on the horizon; not to be confused with specific goals or business strategy” (Collins and Porras, 1994).
“By purpose, I mean an individual’s sense of why he is alive” (Senge, 1990).
“Purpose is the statement of a company’s moral response to its broadly defined responsibilities, not an amoral plan for exploiting commercial opportunity” (Bartlett and Ghoshal, 1994).
Purpose then is a reason for existing and a path to find meaning and motivation to endure and move forward. Some excellent examples of purpose statements include (Disney) “To make people happy” or (Becton Dickinson) “Helping all people live healthy lives”. Leadership teams must invest in determining “why” they exist versus “what” they do if a culture of engagement is to be built. If done right, then this is a work that will take several months to accomplish.
Companies with strong cultures of engagement also have leaders that demonstrate stewardship. Stewardship is the felt responsibility and accountability to wisely manage the resources and capabilities we have been provided. Engaged cultures have leaders who take responsibility for not only their own talents but also for those in the organization. Steve Covey noted, “People with primary greatness have a sense of stewardship about
everything in life, including their time, talents, money, possessions, relationships, family, and even their bodies. They recognize the need to use all their resources for positive purposes, and expect to be held accountable” (Covey, 1991). Effective leaders, capable of building a culture of engagement, demonstrate stewardship over their own resources, whether time, talents, duties or others.
Organizations that have strong engagement cultures are populated with senior leaders that make everyday – and everyone – count daily. Everyone can see them hold themselves accountable for using the company’s resources effectively and efficiently. They hold others accountable and build the capabilities needed to meet and exceed stakeholder demands. Feedback is the fuel of growth. People, as well as an organization’s capabilities, will decline over time without feedback to point out new opportunities. The goal of feedback is performance improvement, constantly seeking out new ways to improve. What do you do if you are the best in the world? How does an athlete go undefeated for a decade? Edwin Moses won 122 high hurdle races in a row. He won gold medals in 1976 and, then, again in 1984 in the 400-m high hurdles. What was his secret? Continuous feedback to lower his time. With limited competition, Moses set up video cameras to film himself running the high hurdles, with the goal of lowering his hurdle clearance. The feedback paid off – in 1976, he won the gold medal with a time of 47.63s, setting a new world record. In 1983, he set a new world record in the high hurdles with a time of 47.02.
Effective leaders use feedback to continually build their capability. If an organization is to build a culture of feedback, then it must first be modeled by leaders. These leaders are not afraid of tough questions, comments or challenges. They seek out those who will engage in the tough conversations to build their capability and that of the organization. Think of the best boss you have worked for and the qualities that you valued. I am willing to bet that two of those qualities were that they cared and listened. In our experience, engagement cultures are populated with a high percentage of caring managers who listen to what others have to say. “Leaders who aspire to build high commitment/high-performance organizations must inquire into the quality of their plans, as well as the effectiveness of their organizations and their own leadership if they are to succeed” (Beer, 2009).
These leaders ask questions about themselves and the organizations for which they are responsible. They seek knowledge about how they are doing in meeting the needs of the organization, as well as those of their employees. When people bring up issues or problems, these leaders stop and listen. They also seek counsel on how to address or solve these issues or problems. Working for these type of leaders causes employees to believe that they care about them and their families in a personal, “real” way.
Yes, we have had the opportunity to work with organizations where leaders have these traits and behaviors. In those organizations, we have found a high degree of employee engagement. Below we have summarized these results and provided a path forward for building an engagement culture.
To build the appropriate culture, leaders must require that developing engaged work teams be a part of the business strategy. This means engagement becomes the way the company operates, not something done in addition to the company’s work. In other words, it is a fundamental tenet of the company that business performance is achieved by leveraging the organization’s human capital. High-performing leaders make employee engagement non-negotiable, by establishing two things: importance and accountability.
Making engagement important is done in several ways:
It is part of the company’s operating system.
It is talked about constantly and at every opportunity. Many of the best companies that we have worked with conduct very short five- to ten-min meetings that focus on improving one engagement area daily.
Engagement data are consistently revisited throughout the year to determine areas where teams can leverage things they do well or manage around areas where they have trouble. This allows leaders to “aim” engagement at solving business problems, launching new projects or completing other company goals. Many of the companies we have partnered with have utilized engagement to correct a variety of business performance issues, such as increasing safety ratings, reducing turnover, driving client loyalty, improving per-person productivity, etc.
Engagement data are used as one of the points of consideration in succession planning (you would not want to promote someone to a role that oversees more team members if that person has difficulty building engagement with smaller teams).
Providing managers and employees with appropriate training on the value of engagement and what steps the organization will take after the survey. Most organizations fail miserably in this area – the collected data rarely have any real utility in the day-to-day business, because managers do not understand its importance and relevance for their team’s day-to-day activities.
Leaders must also build accountability into the engagement initiatives of their organizations. All too often, this is omitted, preventing most companies from getting the most from their investment. There are three important things following an engagement survey: sharing the results with all of the team members, creating action plans on those results at the small team level and making progress on those action plans. As part of a leader’s decision process, there are several things to consider with respect to accountability:
Is there managerial and team accountability for completing action plans based on the team’s results? The most engaged teams take action and attempt to improve the workplace to drive better business performance. Leaders should consider this non-negotiable.
Are managers held accountable for building engagement among their team year-over-year? Companies that truly understand the value of an engagement culture incorporate engagement growth into each manager’s annual performance review.
Is there accountability for ongoing engagement activities? High-performing leaders decide that engagement is important to the company’s success, setting clear expectations for managers and teams relative to the activities and frequency of engagement conversations.
Is there an appetite to consider that some portion of a manager’s variable pay be tied to engagement growth? When it comes to money, tell me how I am paid and I will show you how I behave. Linking pay to engagement is a bit of a tricky task, but it can be done so that there are no “false positives” on future surveys. Do not compensate for overall score – if you set the mark at 4.0 on a five-point scale, then your company may
miraculously get to a 4.0 on the next survey. Instead, think about paying for business growth based on the past year’s results or picking one key item that will be the driver of growing engagement (check with your provider for some help in this area).
Let us now take a look at some outcomes of accountability. As previously mentioned, the three things that are vital after the survey are sharing the results with all of the team members, creating action plans on those results at the small team level and making progress on those action plans. These three steps are so important that Activate Human Capital Group asks items that give an insight to how teams and managers perform on these points on every administration after the initial benchmark. We have learned that how people respond to these three additional items has a strong impact on an individual’s level of engagement.
We classify engagement participants into four categories – fully engaged, engaged, not engaged and actively disengaged. The chart below reveals the engagement levels of one of our heavy industry clients. The left column displays the percentage of employees that fall into each category.
In this illustration, team members that strongly agree with the statement “I saw the results from the previous survey” have a very different engagement profile versus that of the whole company. The population of those employees who are fully engaged increases from 10 to 15 percent just by sharing the results. Also, notice that the population of actively disengaged employees declines. Team members that strongly agree to the next two items also see dramatic changes in the engagement levels.
As stated earlier, organizations that have strong engagement cultures are populated with senior leaders that make every day and everyone count daily. They exhibit a high degree of responsibility toward accountability that they both expect, and demonstrate, outwardly and openly. There is a strong sense that the accountability and importance around the engagement culture they are building is absolutely non-negotiable. These leaders are the guiding light for the organization and the facilitators of the company’s “why”.
So what is the payoff? More loyal employees, better employee well-being, better family well-being, better business performance and, potentially, additional jobs. Increased business performance comes in a number of ways: increased sales/market share, an increase in client engagement metrics and decreases in turnover and safety incidents.
In one organization we tracked, as engagement grew from one year to the next, so did their market share – by 69%. The groups that did not have an increase or remained unchanged in their engagement each saw a decrease.
In another example, we see how an engagement culture that is fostered by senior leaders can affect client relationships.
The above-mentioned illustration reveals that business units with higher levels of engagement also have higher percentages of top box responses in four key client indicators – a direct reflection of the health and stability of the relationship between an organization and its clients.
Senior leaders have three “levers” they can pull to drive business performance. They can invest in capital assets (purchase new equipment, build new facilities or invest in other assets to increase their business) and improve processes (deploy programs like Six Sigma, Learn Thinking, etc.). While these two levers are important, they typically only give you a “first mover” advantage – meaning, that other companies will eventually catch up.
The true differentiator is the third lever, especially in a heavily commoditized world – the human capital lever. This approach involves leveraging the talents of the organization’s employees and engaging them to produce a stronger business performance. The world’s best-in-class organizations understand that human capital yields organic growth and creates brand loyalty.
When senior leaders align their top team through the development of a core purpose, embracing stewardship, practicing feedback and modeling caring and listening, we then see an engagement culture emerge that drives business performance and creates a true competitive advantage for the organization.
References
Bartlett, C. and Ghoshal, S. (1994), Changing the Role of Top Management: Beyond Strategy to Purpose, Harvard Business Review, Boston, MA, p. 88.
Beer, M. (2009), High Commitment High Performance, Jossey-Bass, San Francisco, CA, p. 133.
Collins, J. and Porras, J. (1994), Built to Last, Harper Collins, New York, NY, p. 72.
Covey, S. (1991), Principled Centered Leadership, Summit Books, New York, NY, p. 64.
Senge, P. (1990), The Fifth Discipline, Double Day Publishing, New York, NY, p. 148.
About the Author
Jay Romans, SVP Global HR, Owens & Minor, has a career of consulting for large, global organizations and has held Senior Leadership positions at two fortune 500 companies. Romans is a proven executive with deep experience in the oil and gas, manufacturing, distribution and medical service industries. Romans has worked in all areas of human resources on a wide variety of operational improvement projects, organizational effectiveness initiatives and transformation issues that include executive compensation design with the board of directors, succession planning, talent acquisition and development, executive assessment and benefit plan design. Jay Romans is the corresponding author and can be contacted at: jayr2@me.com.
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