By Bob Kelleher, Founder, The Employee Engagement Group
After spending a career helping companies engage their employees to drive business results, I suddenly realized that having engaged employees by itself is not the answer. Engagement is the secret sauce that separates you from your competition, but engagement along with profit, revenue growth, innovation, quality, and customer satisfaction are by themselves all outcomes of something bigger.
This epiphany occurred to me during a recent keynote talk while discussing how iconic New England companies such as Digital Equipment Corporation, Polaroid, Arthur D. Little, Stone and Webster, and Wang all went bankrupt. Why did firms that employed satisfied employees, were led by extraordinary leaders, and, in most cases, had exemplary cultures go bankrupt? Because employee engagement, profit, growth, client satisfaction, and even solid leadership by themselves are not sustainable.
I’ve often defined leadership, which originally morphed from management, as the ability to lead people, build fellowship, and make money. This archaic definition is so yesterday!
Today, leadership is about Creativeship, defined as the creation of sustainable cultures and business models. Creativeship will allow a business to compete and thrive in this world of unprecedented technological advances, globalization, shifting economic drivers, government intervention, changing workforce demographics, vastly different motivational drivers with Gen X, and the emergence of corporate social responsibility as a motivational driver.
For firms to be sustainable, they need to shift their leadership model to Creativeship and invest their energies and resources in six prominent and overlapping business priorities:
It has been proven that socially conscious organizations outperform those solely committed to beating the competition (Logan, King, and Fischer-Wright, 2008). Which is why organizations need to articulate both “what we do” and “why we do it” (their employment value proposition—EVP) if they want to retain, attract, and hire the best employees. For example, we know Whole Foods Market sells perishable consumer goods. But its purpose statement clearly specifies its EVP: “Provide choices for nurturing the body, the community, and the planet.” Or, we know that Starbucks sells premium coffee. But its EVP is: “To inspire and nurture the human spirit—one person, one cup, and one neighborhood at a time.”
Much has been written about Generation Y (the Millinium generation) being a purpose generation. A parallel trend is the increasing role Baby Boomers are playing in leading and initiating corporate social responsibility activites as they push their employers to donate to charities, reduce their carbon footprint, and support volunteerism. After years of focusing on wealth accumulation and climbing the corpoate ladder, Boomers now are refocusing their priorities.
According to Gallup research, companies with high engagement are more than 200 percent more profitable than organizations with low engagement levels. Luckily, we’re seeing evidence that leadership teams increasingly are asking their HR and Organizational Development staffs to build engaged workforces. According to December 2010’s Economic Intelligence Unit, 84 percent of C-suite survey respondents reported “disengaged employees” as one of the biggest threats to their business, and PricewaterhouseCooper’s 2011 Global CEO Survey found 83 percent of executives list talent management strategy as their No. 1 concern.
Successful initiatives will link engagement efforts to high performance while minimizing employee satisfaction goals. The last thing you want is a team of satisfied but underperforming employees. Employee satisfaction might be an outcome of a great culture, but it shouldn’t be the goal. I define engagement as “the unlocking of employee potential to drive high performance.” Helping employees reach their potential requires organizations to create descriptions that are fluid and captures the intrinsic motivational drivers of their employees. Creativeship is about developing a job match where you link what an employee is great at, what they love to do, and what needs to get done.
Creating sustainable cultures of performance at both the company and individual level is key. A well-known Internet company recently opted to reward all of its employees with a 10 percent pay increase. Over time, this decision will erode performance and create disengagement. There is no incentive for employees to be high performers when mediocrity is rewarded in kind. Firms must avoid this peanut butter approach to compensation (spreading it around evenly so everyone gets an equal share).
Creating cultures of innovation fosters engagement and sustainability. Companies fail when they cease evolving their product, service, or internal processes. Why didn’t Polaroid see the emergence of digital photography? Folklore has it that Polaroid invented the digital camera but was afraid of investing in a product that could potentially cannibalize its cash cow base business. This is an example of leading an organization for “today” and not creating cultures of sustainability. Creating cultures of innovation and sustainability requires investing today’s cash to discover tomorrow’s new technologies, products, services, geographies, and approaches.
Social media is a huge engagement, staffing, retention, and, increasingly, branding tool. Building sustainable cultures and business models requires what I call tri-branding, which is when companies build tenacious customer brand loyalty and passion—a process made easier today with the emergence of social media as an everyday communications (and branding) tool. Think Apple. It builds cool technological products and hires technically cool people who are avid Apple consumers themselves. It also has the loyalty of its customers who have a compulsive need to speak about and brand Apple products.
Social media represents a huge branding opportunity, and firms need to identify their most “connected” employees and engage them as brand ambassadors. Malcolm Gladwell highlights in his best-selling book, “The Tipping Point,” the importance of “connectors”—employees and the like who know how to get things done, know your organizations’ key players, and are the people most connected with other people. In the world of social media, connectors are your brand ambassadors.
The old business adage, “Grow or Die” is at the core of Creativeship. In this era of globalization and technological advances, companies need to understand that they will perish if they don’t evolve, grow, expand, and morph. For every one Levi Straus (producing the same product the same way for 100 years), there are 100 companies that become extinct because they don’t grow or evolve. Local companies need to think regional; regional companies need to think national; national companies need to think global. As Thomas Friedman points out in “The World is Flat,” technology is creating a level playing field regardless of where you produce your product or perform your service.
At the employee level, creativeship is about creating cultures of personal growth and development. Indeed, recent studies show that Gen Yers are three times more motivated by career development opportunities than financial rewards.
Bob Kelleher is an author, thought leader, keynote speaker, and consultant who travels the globe sharing his insights on employee engagement, leadership, and workforce trends. He is the author of Amazon’s No. 1 selling employee engagement book for 2011, “Louder Than Words: 10 Practical Employee Engagement Steps That Drive Results,” and “Creativeship: A Novel for Evolving Leaders,” a fable told through the eyes of retiring management consultant, fictitious main character Joe Daniels, that will be published in mid-October. Kelleher is the founder of The Employee Engagement Group (EmployeeEngagement.com), a global consulting firm that works with leadership teams to implement best-in-class leadership and employee engagement programs, workshops, and surveys. It recently introduced a virtual cloud-based employee engagement resource center, The Employee Engagement Library. Kelleher previously served as chief human resources officer for several global companies and has held positions ranging from executive vice president of Organizational Development to chief operating officer.