The multinational pharmaceutical company was prospering, but something was clearly amiss. While the leaders considered their workforce a highly engaged team, the job-satisfaction surveys painted another picture. The employees’ comments echoed with laments about stresses and strains. What was going on here?
When Korn Ferry’s Hay Group division did a deep dive into employee attitude at the company, they found a startling clash of emotions. On one hand, workers admired the business (“Best company I ever worked for!” “The sky’s the limit!”) But then came the revelations: “Why does everything have to go through 12 people?” “Why is our parent company so involved in our operation and slowing us down?” “Why are we ‘managing around’ and not dealing directly with performance problems?”
The overarching challenge is one that continues to plague legions of executives: what to do about the disengaged worker. Recent studies have shown that an estimated 15 to 20 percent of people across the workforce feel frustrated.
That’s a lot, said Mark Royal, a Hay Group senior principal. “If you’re talking about a 1,000-employee organization, that is equivalent to 150 to 200 people who would tell you they could be contributing at a higher level if problems in their work environment could be resolved.”
The frustration is not limited to the back office or shop floor. “If you think about a team of five people sitting around a conference table,” Royal said, “at least one of those people is in that position.”
Twenty-five years ago, when Jack Welch’s Vitality Curve, his famed rank-based employee evaluation scale, held sway, the assumption was that the top 20 percent of the workforce was the most productive, the next 70 percent was adequate and the disgruntled bottom 10 percent should be fired. But studies by MIT and others showed that such a rigid application of rank-and-yank dynamics has its costs.
With millennials rapidly moving into the workforce, the message has become clear: Find out what’s ailing your employees.
One need only look at the shifting fortunes of General Motors, one of the world’s largest corporations. For most of the past 40 years, GM has been a perennial punching bag in the business media. Its bloated inefficiencies and obtuse management reflected a company that had lost its way.
In 2009, when GM filed for Chapter 11 in the wake of the recession, the government stepped in with a bailout and essentially swept out the executive chambers. Two years ago, the new GM found itself with a new and unlikely CEO, Mary Barra, a GM lifer who knew firsthand how the old top-down management style had served to quash all the talent at the middle levels. She gathered the top executives and insisted on an atmosphere of openness and responsibility. She made a point of listening.
“And guess what?” said Alan Batey, GM’s North America president. “When you get 10 people around a table actively engaged, you get a better decision than when two of them are telling everyone else what we’re going to do.”
“She really focuses on ‘Your problem is my problem,’ ” added John Quattrone, GM’s senior vice president of human resources (a position once held by Barra). “In the old GM days it was ‘Do your job well and to hell with the next guy.’ ”
-Old GM: Rigid dress code, strict hierarchy protocols. Take a suggestion to your boss and know that he’ll lose the memo before he sees his boss.
-New GM: No dress code, leave your ego at the door, behave likes it’s an entrepreneurial company, walk into anyone’s office with a suggestion. And listen.
“The biggest change with Mary is that she zooms in and gets her leaders to concentrate on their behaviors,” Quattrone said. “Be accountable for your behavior. Encourage candor. Don’t hide things. If things go bad, bring it up.” Such good behavior, she believes, will push down through the next eight or nine layers of management.
In a voluntary group called GM 20/20, employees are given free rein to reimagine the way work is done. “We give them permission to positively disrupt the business,” Quattrone said. The payoff, he added, is reflected in the company’s return to solvency. “Those behaviors are driving those results.”
The Best Rewards
When an employee feels abandoned, he or she often stops producing.
“Being invisible is one of the hardest things for people in big organizations,” said Iris Goldfein, chief people officer at Sutherland Global Services. “People like to be seen, they like to be recognized.”
The important thing, said Goldfein, is to recognize that it takes more than just a Starbucks gift card to enrich the hearts of your people. “People make the mistake that engagement is all about parties and contests and having a pizza brought in to celebrate a good win,” she said. “They try things, like the engagement du jour. But nobody says ‘I’m going to stay working for you because you have the best Halloween parties.’ ”
The critical issue is to connect engagement with the strategy of the business. “To have a truly engaged individual, first they have to connect with their work. They understand the context, their impact, what their role is and why it’s important. People need to understand their place in the whole.”
Thus at Sutherland, the strategy is to free up the first line of supervisors so that they can spend 80 percent of their time with the people they lead, coaching them to do their jobs better.
Hay Group’s Royal found that the most engaged employees are those who feel they can advance to another level. Goldfein concurred: “I have long thought that people’s ability to remake themselves is essential to survive and thrive in this work environment. So I tell my people, ‘You have to be able to remake yourselves. What you did yesterday is no longer a valuable skill.’ The trainers and the employees should be free to push each other to new heights.
“They learn something on Monday, they go to bed and wake up a new person on Tuesday,” she added. “That’s my advice for people coming up: Be incredibly open to learning to be agile in this environment.”
Although last year Sutherland Global was named to the Achievers list of Top 50 Most Engaged Workforces, this was not always the case, Goldfein admitted. What brought about the change was more consistent messaging to its people. The way to build a successful company today, she said, is not ramping up the speed but establishing an atmosphere of truth and trust. “Don’t spin,” she said. “Tell the truth. If not, you will spend an incredible amount of time unspinning, and that’s the death of speed.”
According to Hay Group research, frustrated employees tend to take one of three paths. Some employees, Royal found, are actually able to work things out with their managers. But the other two actions likely to be taken are not so beneficial for the company. One group simply gives up trying. The others walk out the door within 12 to 24 months. These workers are not only taking some hefty intellectual capital with them, Royal pointed out, but they had a lot of time to spread a noxious airing of their grievances in an organization’s hallways.
Even if your employee turnover rate is nowhere near Walmart’s annual 44 percent churn (or, seven times the rate of Costco), it is well worth identifying those unseen obstructions to a fully engaged and enabled workforce.
First, it is critical to recognize that the frustrated workers are not necessarily malcontents. They might well be highly motivated people who don’t want to be seen as part of the problem. “They want to be seen as pulling from the right side of the rope,” Royal said. “So they suffer in silence and soldier on. You don’t notice it until Joe is walking out the door.”
These departures often involve the most talented people “because they tend to be the most sensitive to barriers at work and have opportunities elsewhere if they want them,” he said. “They didn’t hear Joe because they weren’t asking the right questions and Joe wasn’t volunteering. And Joe is one of the good guys!”
There are two keys to enabling employees, said Royal, co-author along with Tom Agnew of “The Enemy of Engagement.” First, match people to their roles so they’re able to use the full range of their skills. Then make sure you’ve created a work environment where people get all the information and collaborative support they need to function properly.
“Minimize the barriers that stand in the way,” said Royal. “Get rid of unnecessary procedures, non-value-adding tasks, red tape. Over and over we’ve seen that when organizations combine the want to that comes with engagement with the can do that comes with enablement, they see results.”
So why don’t all companies find these things readily apparent? We can blame the usual blind spots. Or maybe it should be called deaf spots, because the real deterrent to success is simply not listening. Or worse, said Royal, managers sometimes just don’t want to know.
“There’s something comforting about defining performance in motivational terms. ‘If you’re not performing, whose problem is that? It’s your problem! Get more motivated!’
“But motivation is only part of it,” he said. “We also want to enable motivated people to succeed. Now the finger points back at the organization and the manager. And not every manager wants to take that on. So the manager has a blind spot because the enablement message is not as comfortable to them.”
Good management, as Mary Barra has been advocating at GM, is one that pushes the message through the ranks.
This was learned eight years ago at Kimberly-Clark, the personal-care products goliath. Things were going well, but they could have been better. When a comprehensive survey was conducted among its employees, managers discovered that not everyone knew, so to speak, where the trains were running.
“Our strategy was clear at the top of the house,” observed Gary Short, director of talent management, “but it was not embedded all the way down to the individuals.” Discouraged workers felt that regular feedback just wasn’t happening.
“We didn’t listen,” said Short. “It was clear we needed to share information and improve our leadership effectiveness. We needed our leaders to be better coaches.”
There was no way to turn a deaf ear to the findings. “When you get a survey return rate of 99 percent,” said Short, “leaders just can’t ignore the voice of the employees. It’s all right there.”
Kimberly-Clark went to work with Korn Ferry’s Hay Group division on building what they called the Trust Index. Diversity inclusion became a major driver. And while millennials were very happy to see these changes, Short believes that all generations prosper when they feel involved. “In the end, we all have basic needs to feel valued and have control of our destiny,” he said.
The mistake was getting caught up in the technology-driven maelstrom of run harder, faster, farther. “That’s when we drop the little things that tend to add up,” Short said. “Then we ask, ‘What happened?’ Well, we didn’t spend as much time with our people. We didn’t listen, we didn’t coach as much.”
Positive results were swift, and Short pointed to the great trend line in the stock price, which doubled in five years.
“It’s the small things that make a big difference,” Short said. “The most important things you can give to inspire and to empower are your heart and your ears—and less of your mouth.”