Following is a sneak peak of an article I wrote for the American Management Association’s Journal. It’s about the necessity for organizations to increase employee engagement (including leadership development, team building and talent management) as the forces of globalization and demographics collide.
A perfect storm is brewing that will threaten many a firm’s survival in the decades ahead. Market forces, like storm fronts, are colliding to produce volatile conditions. Companies that anticipate and prepare for these threats can convert them into major opportunities to leap ahead of their competitors. There’s plenty of evidence that savvy companies are already moving to gain a competitive edge. Rather than being crushed by the massive waves, these companies are effectively surfing them and will leave competitors in their wake.
To comprehend this perfect storm, one must understand the interaction of the forces of globalization, technology, demographics and changing cultural values. Much has been written about the effects of globalization. Without question, the opening of markets has meant more firms compete globally. The widespread availability of new equipment and technologies has empowered new competitors to meet world-class cost and quality standards. It has also accelerated the rate of new product and process innovation. The bar is constantly being raised as these new competitors emerge from around the globe.
The limited resource for most organizations today and in the near term is human capital, the people with the specific skills and talents in demand by organizations. Professionals in fields such as technology, healthcare, and oil and gas are already in short supply. This talent crunch will only become more acute as baby boomers retire in the years and decades ahead.
Large companies may be especially hard hit because Generation Y employees (born between 1982 to 1994 and also known as “millenials”) eschew larger corporations as toxic workplaces. They are choosing to work for small companies or begin entrepreneurial endeavors of their own. Generation Y has learned from observing their parents that most workplaces suck the life out of their employees. Research studies done by Gallup, the Corporate Leadership Council and others over the last decade have found that nearly 75 percent of American employees are not engaged in their work and approximately 20 percent of these employee are at times working against the interests of their organizations as a form of retaliation. The media has had a field day mocking the workplace with popular offerings such as “The Office” (television), “Office Space” (movie), and the syndicated comic strip “Dilbert.”
You would expect that the “weather forecasters” within organizations are monitoring the conditions and recommending that a change of course be implemented. However, too many fail to fully appreciate the urgency to take action. Human beings are typically slow to alter their behavior when it comes to change. Neuroscience has taught us that neural connections are formed when we change our behavior and that it requires a considerable expenditure of energy to form new neural connections. It’s easier to take the path of least resistance so we are prone to keep doing what’s always worked in the past even when we are aware that it may not work in the future. Corroborating this view is research by Professor Stanley Finkelstein of Dartmouth’s Tuck School of Business that examined cases of business failure. Finkelstein found that most managers were aware of developments in their industry that produced unfavorable change but failed to do anything about them until it was too late.
Companies Catching the Wave
There are companies that are moving aggressively to seize the opportunity to ride the wave. Recognizing the strategic importance of creating a workplace that attracts, motivates and retains the best people, they have put some of their most talented leaders in place to drive their efforts. These organizations are measuring employee engagement and in many cases integrating talent management and employee engagement activities into their strategic planning process.
Much can be learned from the creativity and variety of their efforts which generally fall into three categories: (1) making employees feel proud of their company, (2) making employees feel valued, and (3) making employees feel “in the loop” by keeping them informed and giving them a voice on the issues that matter to them. Notice that each of these areas focus on how employees “feel” and are therefore emotional in nature. Experience and recent research have taught companies that rational factors such as compensation may satisfy employees but it’s the emotional factors that motivate and retain them.
1. Company Pride Beginning in the 1990s, the Gallup Poll found that Americans’ personal identities were more closely associated with their companies and jobs than with their families or communities which had been the case historically. Individuals today have higher expectations for the social status that comes from the companies they work for and their positions. Research also indicates that employees are looking for greater significance in their work.
More companies are realizing that a corporate identity (or employer brand, as it has also been described) that is meaningful and makes employees feel proud helps them attract and retain the best employees. For example, the biotechnology firm Genentech has a tag line beneath its name that says “In business for life.” Genentech keeps the mission in view. It has cancer patients visit with employees and throws big company-wide parties to celebrate product breakthroughs.
Corporate values that appeal to employees also make them feel proud. McDonald’s Corporation’s resurgence in recent years is in part due to CEO Jim Skinner’s leading a company-wide effort to return to the values former CEO Ray Kroc established in McDonald’s early days. Management workshops were conducted. Materials including film clips were used to bring the values to life and touch people’s hearts. It has now become an ongoing effort to capture stories that illustrate employees living out the values and to raise awareness of where potential conflicts exist. McDonald’s is effectively continuing a company-wide conversation about its values and how to remain true to them. This makes employees feel proud to be a part of the McDonald’s family. Values-laden actions such as providing healthier items on its menu and continuing to support the Ronald McDonald Houses for children with serious illnesses and their families are a source of pride to McDonald’s employees.
2. Valuing Employees Companies are doing more to make their employees feel valued. Training supervisors to coach the people they are responsible for leading is one such avenue. Supervisors are learning how to help employees identify their strengths. They are spending more time in conversations with employees to learn about their aspirations and help them see career paths that align the employee’s interests with those of the organization. Companies such as Goldman Sachs have mentorship programs that supplement supervisors’ efforts to help employees learn and grow.
Marc Effron, Vice President of talent management for Avon Corporation and head of the industry group The New Talent Management Network, oversees a talent pool of Avon’s top thousand management positions. Effron thinks of this group as being in a talent pipeline that Avon must intentionally and continuously develop in order to meet its growth objectives. Effron and his team track the performance of this group, and provide stretch assignments, and peer and behavioral coaching to help them learn and grow.
Office design and amenities factor into how employees feel valued. Brian Fitzgerald, head of Google’s engineering office in Chicago (recently rated the best workplace in the Windy City) said that his goal is to make the workplace so attractive that people would rather be there than work at home (which they have the flexibility to do). Fitzgerald’s office has amenities that include free gourmet food and a masseuse who comes to the office each week.
Reaching out to provide support to employees to help them deal with the inevitable difficult times in life is a sure-fire way for companies to demonstrate they value their people. These efforts include employee assistance programs that provide access to counselors, faith-friendly programs that include access to clergy, and even support programs such as the Beryl Companies’ “Beryl Cares” that is described on page __ herein. Beryl is so attuned to this need that it looks for ongoing opportunities to make employees feel valued and recently handed out $50 gas cards to help offset rising transportation costs for its lower paid employees.
3. Keeping Employees “In the Loop” Companies are becoming more serious about keeping employees informed and making sure their opinions and ideas are considered on matters that are important to them. Efforts of this sort help meet human needs for respect and belonging. Fred Stokes, head of Employee Relations at Lowes, said the company created “Voice Teams” in Lowes’ stores to allow frontline employees to share their opinions and ideas with decision makers. Some leaders in Lockheed Martin, the world’s largest defense company, have implemented “Start-Stop-Continue” meetings that are designed to hear employees’ opinions on what actions their business unit should be undertaking that they are not at present, what actions they are presently undertaking that they should stop, and what actions they should continue to implement.
Companies are also employing social media technologies such as employee blogs, wikis and beefed-up employee profile pages that include personal pictures and interests to better inform employees, and give them a voice and a means to express their personal identities. According to Kristina Patrick, Senior Project Manager, Outreach & Business Development for H&R Block, the firm developed Block Central, a corporate news site where employees can add comments to internal news items and submit questions anonymously. In addition, H&R Block employees also have internal instant messaging capability and personal blogs. Sabre Holdings developed a social media platform branded “SabreTown” as a means to connect its geographically dispersed workforce, according to Al Comeaux, Senior Vice President of Internal Communications at the firm. SabreTown generated 65 percent adoption among Sabre’s 9,000 worldwide employees in just three months.
Social media technologies are helping companies attract and retain Generation Y. Like most large companies, Wachovia’s employee engagement surveys indicated Gen Y employees were very engaged at the beginning of their careers. By the end of their first year, however, Gen Y’s engagement levels “dropped off the table” according to Pete Fields, Senior Vice President of eCommere at Wachovia. Fields led the launch of new social media capabilities that are proving to be especially popular with Gen Y. Wachovia expects to phase in additional social media capabilities over time.
Time to Act
As the examples above show, there are many ways to begin developing a workplace that will attract, motivate and retain the best employees. Each company’s efforts should be tailored to their unique situation including the types of employees they require and the actions that are most valued by these employees. Wise organizations will begin their efforts soon so that they will come out of the perfect storm on top of the waves, rather than buried beneath them.
Michael Lee Stallard is president and co-founder of E Pluribus Partners and the primary author of the book Fired Up or Burned Out.