Michael Folkman
Engagement
Regular readers of this update will know that employee engagement has been flavour of the month in corporate boardrooms for some time now. It seems that organisations are waking up to the fact that engagement and the willingness to go the extra mile in terms of discretionary effort is not necessarily down to pay and benefits but a far more complex and intangible set of criteria that require specific insight and understanding of culture, relationships and values. Given the number of conferences and seminars on offer covering engagement it appears that there is a cottage industry developing to guide senior executives through this tricky area.
However, with engagement unlike some areas of corporate development, teaching executives about how to engage their people suffers from a number of inherent difficulties. Firstly, can something as naturally intangible as engagement be taught in a systematic manner? Secondly, do organizations and more specifically, senior executives actually want engagement given the change in outlook and culture it will require? Michael Specht lists five criteria for successful engagement:
• Involvement in decision making
• Feel they are able to voice their ideas, & managers listen to these views
• Have line of sight between employee performance & company performance
• They have career development
• When the organization is concerned for employees’ health & wellbeing
To this I would also add strategic and e case for improved engagement is something all organizations are striving for? Well, I’m not convinced that many are willing or able to undertake the necessary changes in outlook and culture to achieve this. Digging a little deeper it appears that pursuing engagement as a key strategy in boosting performance is going to require change or a reversal in corporate attitudes that many executives may find too unpalatable or difficult to achieve even if they wanted to.
By looking a little closer we can actually start to understand what an organization would look like if it were to really focus on cultivating engagement as a key value. To start off with one of the main requirements of engagement is to give people autonomy or control over their role and an active say in decision-making. This came up in a provocative blog post by Paul Gillin5 entitled Gain Control by Giving it Up, where he talks about a new book called Open Leadership by Charlene Li6. In her book Li puts forward the notion that the traditional model of focusing hierarchical reporting and concentrating decision making and influence in the hands of a few senior executives is damaging to organisational performance. This is not a new idea but on this evidence I think Li makes a very strong argument. “Open Leadership will make a lot of people uncomfortable because it proposes that the only way to govern effectively in a transparent business world is to give up control and trust people to do the right thing.” “Li asserts that today’s business world is too complex and competitive to permit organizations to continue to manage the way they have since the Industrial Revolution. That top-down philosophy assumes that people are idiots who can’t accomplish tasks without instructions, rigid rules and constant oversight.”
“New business leaders set examples, demonstrate confidence and create cultures that tolerate intelligent, wellintentioned failure.” Li is not alone in her views on the damaging nature of traditional organisational structure, these are reflected in an excellent blog post by Gary Hamel7 in the Wall Street Journal. “I believe that many of the tools and methods we use to manage people at work are ill-suited to the challenges of succeeding in today’s “creative economy.” All too often, legacy management practices reflexively perpetuate the past—by over-weighting the views of long-tenured executives, by valuing conformance more highly than creativity and by turning tired industry nostrums into sacred truths.” “We should remind ourselves that dogma often masquerades as truth, and that we are often comforted by the deception. There are many who would prefer a lazy ramble along the gentle contours of the tried-and-true then a hard scramble up the rocky incline of the untested and unproven.” Hamel goes on to cite HCL Technologies CEO Vineet Nayer as someone who has successfully managed to “invert the pyramid” and empower employees so that they are at the heart of the organisation. “We must destroy the concept of the CEO. The notion of the ‘visionary,’ the ‘captain of the ship’ is bankrupt. We are telling the employee, ‘You are more important than your manager.’ Value gets created between the employee and the customer, and management’s job is to enable innovation at that interface. To do this, we must kill command-and-control.” This same view of challenging the traditional role of leaders is echoed in a Financial Times article by John Kay8: “Domineering chief executives often fill their boards with cheerleaders, and rarely seek sceptical counsel. An army of professional advisers can hardly wait to get its hands on fees. The independence of equity analysts is compromised by their association with deal making banks. Both analysts and journalists find their access depends on good relations with the businesses they cover. Many of the worst deals were widely applauded when announced. The modern cult of the heroic chief executive is at the root of the problem.” To underline the need for radical change in the role of organizational leaders, Gary Woodill9 argues that traditional management of activities such as strategic reviews, long-term business planning and centralized setting of objectives is a waste of time. “What is interesting is that new methods have been developed in providing companies foresight, at least for a few years. But most strategic planning is an extension of the past.” Giving up what we have long held to be productive and positive is something that Jeff Sutherland blogged about10: “Study after study at MIT and around the world show that incentive bonuses cause people to perform worse if they have to do any thinking in their job. (Hopefully, that is most of us.) Of course, all the research shows performance appraisals demotivate people but we still hand out performance appraisals thinking that will help employees improve performance proving that much of what we think and do is fundamentally flawed.” In her book Li argues that decentralizing power is an inevitable change that organizations are going to have to make. I think that many organizations or those leading them run a mile from this concept and most organizations are currently moving in the opposite direction. Advances in technology and the recession have meant that organizations are monitoring and looking to standardize their employee’s activities on a greater scale than ever. With greater monitoring and the unsuitability of traditional organizational command and control, mediocrity is perpetuated and people are forced to take a narrow view of their role in the organization. A blog post by Johnnie Moore discusses the idea of “closing the field”: “services get analyzed by experts and chopped into smaller functional units. Front and back offices are created; some back office functions then get outsourced. Each unit is given its own performance targets. For example, a call centre operator has to clear 60 calls a day. Inevitably, everyone learns to game the system; one way to deal with lots of calls is to cut people off or pass them along - leading to even more calls later etc etc.” In short, what is required is not a new strategy to focus on engagement but a new organizational culture that places engagement at its heart to highlight the difficulties in effecting cultural change, Gautam Ghosh12 highlights a video entitled “Culture eats Strategy for Lunch”. The reality is that the vast majorities of organizations have a culture or organizational structure that suits the command and control indset. Advances in technology have meant that it is becoming easier and easier to micro manage and standardize procedure to the nth degree. The upshot of this is that it actively disengages people from their role and perpetuates poor performance. My feeling is that faced with the choice of giving up control and influence or maintaining the status quo the vast majority of modern executives will go for the latter. Part of this is inevitably down to the herd mentality. As with bonus culture, the negative effect on performance is well acknowledged. The reason cited by executives however for sticking with bonus culture is that everyone else is doing it. It will take a brave leadership team to abandon the traditional command and control mindset. This does not mean engagement will not continue to feature heavily in discussions and in seminars and conferences. Enterprises will still continue to roll-out annual engagement surveys and I suspect many organizations will be on the hunt for marginal increases in engagement, if it means the culture stays the same.
