Want to Close the Engagement Gap? Offer Growth and Learning Opportunities

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There’s an old adage that goes like this: you take the job for the money, stay for the people, and leave because of your boss.  If we believe this is true, then it becomes more about the quality of relationship, environment, and fulfilling expectations (the job actually reflects the brochure), than managing precisely what people do, how they do it, etc.

So why is it that organizations have such highly refined analytics about when and how to interact with customers and prospects to maintain the highest revenue uplift and retention rate?  Companies invest enormous sums to understand exactly when to place a deft customer service phone call, or extend a sweetened interest rate, or include that ‘bonus VIP’ service – all to raise customer retention, and revenue.  We employ neuroscience and psycho-graphic profiling to understand motivating factors in buying behaviors (did you know grocery stores use slow ambient music to seduce you into staying longer and buying more?) – and yet, many companies still operate in a command-and-control fashion with their people, treating them more as instruments.

In Closing the Engagement Gap, by Julie Gebauer and Don Lowman, they argue that one of the keys (there are five) to heightened engagement is to offer continuous learning and intellectual development opportunities.  In one example, at EMC’s R&D facility in China, the general manager understood that professional growth and camaraderie were big motivating factors and created both formal and informal learning, networking, and socializing activities.  Consider the inverse effect – years ago EMC opened a technical facility in India and immediately offshored/insourced the more rudimentary and mundane tasks that the U.S. engineers didn’t want.  You can guess the Indian engineers were frustrated, annoyed, and characteristically weren’t so inclined to give any discretionary effort to their work.

And there’s the key – since everyone can exercise a discretionary choice whether to be engaged or not, what are the factors that determine employee engagement?  According to Lowman and Gebauer’s Global Workforce Study, these are the top five:

  1. Senior management’s sincere interest in employee well-being
  2. Opportunity an employee has to improve skills and capabilities
  3. Organization’s reputation for social responsibility
  4. Opportunity an employee has to provide input into decision-making in his department
  5. Organization’s ability to quickly resolve customer concerns

Right there at the top – #1 and #2: strength of relationship with your boss, and opportunity for intellectual and professional growth is what drives engagement, innovation, and yes, shareholder value.And even if you’re not so hip on driving equity-holder wealth, it sure makes a fun and interesting place to work.

Step Up Change Agents

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Dream well. You may find yourself there. -Neal Bushoven

“Companies are people” is a popular expression to celebrate that the engine of a company is the people who work there, and it’s success or failure is built on the collaborative, innovative and actionable power of those people.  But remember, a Company is a kind of legalized fiction – a set of codified relationships between shareholders, employees and customers, bound together by contracts – the value of which is predominantly wrapped up in future deliverables – yet to be fulfilled.  Sure enough there is brand, reputation, and pent-up expectation, but the future employee contribution or innovation, the equity value yet to be delivered to the shareholder, and the product or service value to be delivered to the customer, all make up the promise of a Company.

These are much more manageable deliverables than managing the fickleness of people.  People, on the other hand, are people – and susceptible to having babies, or heart-attacks, or mid-life crises, or jumping to the competition, or opening yoga studios, or whatever else strikes their fancy.  A Company’s ability to first: attract and retain the best and brightest, and then: allow them to collaborate in innovative and actionable activities together, is what comprises all those promises codified in the contracts upon which the Company is based.

So let’s look at the people.  The people are “consumed by more fear-based motivation than I’ve seen in my lifetime” said Robert Reich in a presentation today.  There are 77 million baby-boomers working today who were born between 1946 and 1964 and they are:

  • retiring later because their 401K has evaporated (exaggeration – but diminished indeed)
  • more worried about losing their jobs than any time in extant memory
  • unable to borrow yet more from their home equity against diminished home values
  • trying to escape from existing debt load

The result of all is that fear has become a primary motivating force and change agents are becoming more scarce, and yet more valuable than ever, because bold idea makers are shackled by fear.  The biggest barrier to change is past success.  That’s right, when things are good and products and services are moving along at a nice clip, companies encourage more of the same – more of the past successes to fuel growth.  But what if what worked, doesn’t work any longer?  This is when idiosyncratic change agents are most needed. Now more than ever, change agents can be more effective in innovating and bringing new opportunities and actionable ideas because companies are hungry for emergent successes.

The ability to envision how to do new things effectively is now more valuable than ever.

Building an international business? Go Native

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I first heard the phrase Go Native (with respect to business anyway) from Stuart Hart, author of Capitalism at the Crossroads. Stuart intended this phrase as advice to companies looking to construct and gestate new products and services in partnership with indigenous markets. Last week we had an interview with Bruce Churchill, President of DirecTV Latin America. He understands the implications and expansive power of working closely with local operators and distributors, and not trying to manage businesses in foreign cultures from a head office located deep overseas.

Going native in emerging market ventures means leveraging the benefits of:
Culture: who knows better than a local operator in Venezuela that La Vinotinto is the football (soccer people!) team to watch and not La Furia Roja. A programming operator in Miami or NYC can’t possibly replicate the value of the local knowledge of cultural interests.

Credibility: again when creating the promotional and assembling programming packages (in the case of DirecTV) who knows better than the local operator in Lima, Peru what the population will respond to. Famously, think of Chevy’s efforts to market a car in Latin America called NOVA – uh, that’s means “No Go” in Spanish. Ow.

Financial excellence: operating on the local Mexican Peso or Venezuelan Bolivar means that the operating business isn’t managing currency fluctuations, but the local operator is working on local currency. In the end, reconciling P/L is more actual.

Ultimately, DirecTV disbanded offices trying to manage the business ventures in Latin America remotely from Miami or New York, and gave the creative and operational power to the local operators. The result? 62% Q3 growth reported November 5, 2009. Seriously.

Lessons from Dan Glaser, CEO of Marsh

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The Results-Only-Work-Environment is certainly on the rise but it doesn’t appear to be a new phenomenon.  Yesterday afternoon we had an interview with DirecTV President Bruce Churchill who was describing how years ago as a McKinsey partner, they had fairly specific vacation requirements of executives and thus, people dutifully filled out their paperwork and took allotted vacation.  Then McKinsey leadership communicated that any executive could take whatever vacation they wanted – they were grown-ups and could manage their own time against obligations.  The result?  They worked more, were more productive, and took less vacation.  That’s right – once treated as accountable governors of their businesses, they chose to take less ‘official’ vacation and created more integrated balance in their professional lives on a self-regulated agenda.

Earlier that same day, we were interviewing Marsh CEO Dan Glaser who described a current experiment Marsh has constructed in Rotterdam.  They renovated a warehouse and set up an open, non-tiered based environment where associates can collaborate as appropriate depending on what projects they happen to be working on.  No schedules, no punch-cards, and no mandatory office time.  However, he visited their group and stated clearly that the office was accountable for results – they would need to demonstrate margins exceeding their peers elsewhere, and if they could, Marsh was committed to replicating the model.

Glaser went on to say, in his mind the three keys to effecting a successful turn-around at Marsh once he took office in 2007 were – and remain – Clients, Colleagues, and Performance.

Clients: He walked the corridors of Marsh and asked associates, “Do you understand what the mission and values of this company are?”  Quite often, he couldn’t get a clear answer and would reinforce the importance of focusing on the customer, and solving what the customer was trying to accomplish.  According to Glaser, if you do this, customer retention, and revenue, and shareholder value will follow.

Colleagues: He gathered his top team in a closed session in the building – not at an expensive resort junket – and emphasized they needed to focus less on what people do, and more on managing the quality of the relationship.  He described how new managers can get stuck wanting to be the go-to person to achieve as specific result, but ultimately only by giving trust can you allow everyone working with you to shine.  Marsh had also been a highly matrixed environment, where associates often reported to up to four different directors, and as such had differing focus and possibly competing objectives.  He was adamant in simplifying and cleaning the reporting environment so people developed clear focus.

Financial Performance:  Focusing on customers is great, but not at the expense of sacrificing your business model.  An overly eager fulfillment group can wag the company and distract from the core operating model.   And giving open entitlement to colleagues to execute on their own terms will empower for sure, but toward what end?  Above all, by communicating a shared vision of what success looks like, performance will follow.

Subtract for Elegance

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“Exaggerate the essential; leave the obvious vague.”
– Vincent van Gogh

Years ago Marshall Goldsmith taught me the lesson: stop adding too much value. I’m sure you’ve been in meetings and conversations in which those around the table keep upping the ante in an effort to display their brilliance and impress. This can be fun but sometimes not terribly constructive because there comes a point in which the idea or solution becomes over-engineered in way that is distracting for the customer and burdensome for the provider. The solution becomes inelegant.

Over-engineered coolness! Venetian Blind Sunglasses, 1950

Over-engineered coolness! Venetian Blind Sunglasses, 1950

Matthew May is working to convince companies that sometimes the very best ideas have something missing, are often elegantly simple and even imperfect.  Social media examples include Twitter in which the user community is building upon the architecture and constructing their own rules and functionality.  In-n-out Burger has their own secret menu constructed by their customers.  And Red Hat has created their own version of open source leadership they simply call the Red Hat Way.  A core tenet of the Red Hat Way includes the concept of transparency.  I asked one of their senior leaders what they meant by transparency – did they mean transparency in communication, or in their value chain management, or transparency in their customer business practices?  He said yes, and went on to explain their value system is intentionally non-specific, intentionally open by design.  Red Hat expects every one of their associates to come prepared to not just do their own work, but participate collaboratively in the mission of the company which is, to be the catalyst in the communities of customers, partners, and contributors.  That’s not only an audacious goal, but also a moving target in a constantly changing technology landscape.  And so Red Hat understands that they need to get everyone involved to keep their knees bent, stay open to change and adapt collaboratively to build signature processes, and be the market-changing surprise instead of be surprised by their competition.

The culture defines the outcome

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Autonomy, mastery and purpose are the new building blocks for the emerging workspace – or what Pamela Meyer calls our Play-space.  Because as Don Tapscott reminds us the emerging Net Gen has it right: work = collaboration = creativity = fun = work

The Results Only Work Environment is coming of age and the hypertension-inducing nation of clock-punching is eroding.  WL Gore, HCL Technologies, Google and Whole Foods are currently out front in management innovation and the race is on to build the 21st century play-space environments that foster the kinds of killer app product creation that happened organically in the 90s.  The thing is – we’re now understanding that these creative hotbeds don’t have to happen by happy accident.  We can create environments that are not command-and-control, that allow the best ideas to emerge and where resources gravitate to the best ideas, instead of being hierarchically allocated.

Google wants to be a highly inventive company with little tier-based control, and so attracts highly inventive people and then assigns managers about 60 direct reports, which is intentionally unmanageable.  Who can possibly exert granular management over 60 people?  That’s the point.  Google also is a world of radical transparency, or as Schmidt puts it, “highly porous.”  Because remember, if you want real sustainable competitive advantage it has to be in the DNA.  A product sleight of hand, or lucky market timing break won’t persevere.  As Eric Schmidt, CEO of Google, says it so nicely here, “The culture defines the outcome.”

Medicine is for the people, only after will profits follow

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“We try never to forget that medicine is for the people.  It is not for profits.  The profits follow, and if we have remembered that, they never fail to appear.” – George Merck II

In 1995 CEO Ray Gilmartin described the principle driver for Merck as growth.  Not profitability, not cutting edge scientific breakthroughs, nor medicinal innovation or R&D… no, but growth.  That intent continued into 2000 when the chairman’s letter to shareholders stated, “As a company, Merck is totally focused on growth.”  At the time Merck had good reason to believe it could, in fact, accomplish this goal.  They were on the cusp of releasing the FDA-approved and PTO-patented drug Vioxx.  By 2002 Vioxx sales worldwide approached 2.5 billion, which weighed against a 25 billion company represented significant growth indeed.  But in the same time period studies were finding an alarming relationship between Vioxx and an increase in ‘cardiovascular thrombotic events’ – heart attacks and strokes.

In 2008 the New York Times published an article revealing that research papers on Vioxx were often ghostwritten by Merck writers and then published under the byline of prestigious doctors and scientists.  All in efforts to substantiate the value and public perception of Merck and Vioxx.  By early 2005 the FDA had officially attributed up to 139,000 deaths to Vioxx and unofficial estimates ranged upwards of 250,000 globally, although statistics are difficult to gather in developing nations.

And while Gilmartin laudably ordered Marck to voluntarily remove Vioxx from the market in the fall of 2004, sending Merck’s stock from $45 to $33, one must wonder if Merck’s goal in the product Vioxx served the vision of George Merck II.  Jim Collins reminds in How the Mighty Fall that the pursuit of profit over value, of growth over service can destroy even the mightiest of companies.  Motorola, HP, IBM, even NASA have all suffered from hubris, conceit, denial of risk, and yet returned from the brink of disaster.  Merck’s lesson is: remember the core vision and values, money will follow.

We all have new tricks to share

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Last week we did a gig with Keith Ferrazzi in Philly at SAP – webcast and satellite event to about 20,000 people around the world (although I’m guessing our friends in Singapore might not have stayed up to see it live…).  It was my second interaction with him and again I learned something new (this post was the first).  Before the live broadcast he was generous enough to spend about 25 minutes interacting with the studio audience of about 200 or so people in the local studio at SAP and he opened with a riff about recognizing our prejudices.

His point was that each of us upon initial interaction have prejudices we bring to the table.  Before most introductions we come with pre-conceived notions about who that person is – based on their looks, their title – whatever.  He has a funny ice-breaker in which he picks out someone in the audience and throws out a typecast.  That morning he picked a white guy in the front row and brought some laughs about how that person was probably an Irish beer-drinking, weekend golf hacker, etc…  The routine isn’t crass, he is also making fun of himself as he comes from a humble Pittsburgh background and has himself worked through such prejudices.  The point, of course, is when you open yourself to the possibility that each person can bring interesting, valuable insights to the conversation, you can create the possibility of instant intimacy in that moment.  Keith is inviting people to discard prejudices to then find and build powerful new relationships.

Ok – so that’s clear and obvious enough, but I started thinking about how long-time entrenched relationships can also be leaden with existing preconceptions you may have with the people you already know very well.  You can almost hear your mind say, “here she goes again” when the professional you know so well starts to weigh in on a conversation.  Consider your next meeting in which your long-time colleague starts in with, “In my opinion…” and halt your prejudices for a moment.  Just halt your expectations for a moment.  Your inclination might be to anticipate their point of view and shut off your mind to what they might contribute.

Don Sull, whom we interviewed last year at London Business School, makes a compelling case that organizational leaders need to lean far on the side of invitational openness in discussions in order to allow all voices at the table to contibute clearly and openly.  If the goal is to find a solution somewhere between linear command-and-control and unregulated chaos, a leader needs to err on the side of openness to bring the best ideas to the table.  The lesson here is to curb your prejudices not only in new interactions, but also among those fellow colleagues whom you may have known for a long time.  If we believe we have the capacity to grow in our thinking, have the similar mindset when listening to trusted colleagues.  We all have new tricks to share.

Ideacide

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The best leaders understand that the best ideas come from the ground up – or rather in W.L. Gore‘s case, in the round, in teams.  At W.L. Gore there are no bosses, only mentors, champions, and other self-descriptors as associates are invited to define their own roles and play to their strengths in a collaborative fashion.  This approach has yielded a company which produces over 1000 products.

Matt May was consulting to a car company prior to joining Toyota, and after interviewing people in the organization he discovered theirs was a culture that stifled ideas in a command-and-control hierarchical fashion.  The leaders of the company rejected his report, didn’t believe him and insisted they had an open environment where all ideas were welcome to the table.

So Matt played a trick on them at an off-site meeting – watch here:

The Volunteer Generation

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“[GenY] has been called ‘fatally-flawed,’ accused of lacking values, social awareness or caring about anyone, or anything. In fact, Professor Mark Bauerlein says we’re ‘The Dumbest Generation.’  In a book of the same title, arguing that the internet ‘stupefies youth,’ author and professor Jean Twenge dubs the Net Generation as Generation Me, saying that self-esteem programs in school, combined with the internet, may be unleashing ‘a little army of narcissists’ on society.  Others argue that youth, consumed with their own celebrity and web obsessions, are superficial and lacking social skills.”

So says www.dumbestgeneration.com

I had the privilege to spend Tuesday with Don Tapscott, author of Grown Up Digital, and a number of other books. His latest is the culmination of a study about GenY/Millenials and how they think, interact, learn – and how their behavior will affect the way we interact and collaborate in our communities of work and play. Don has come to the conclusion that the emerging generation may be, in fact, the smartest generation – a generation able to synthesize information through all varieties of media and iterate new ideas, products, services, who-knows-what, much faster than any other generation.  Basically Tapscott describes younger media-saturated kids as developing greater carrying and switching capacities in their brains.

Contrary to Bauerlein’s view, I’m heartened by Tapscott’s optimism. In his research he discovered that more than any previous generation in the last 100 years, GenY is less motivated by money, status and power and more by interest and curiosity to explore, travel, collaborate and volunteer. This generation has the highest percentage of those entering public and non-profit vocations, and the highest percentage of those going into social, environmental and public works jobs. From 1988 to 2008 the percentage of college freshman who say they have volunteered in the last year went from 65% to 90%.

Last year my boys – then 5 and 7 – and I cycled in the Trek Across Maine on behalf of lung cancer. I used their cute faces on our website to help raise the minimum required to ride. This year I’ll make sure they understand what we’re riding for and ask them to help raise the contribution.