Because employees can’t be trusted!

I read a recent article by Liz Ryan published in Bloomberg Businessweek (see http://buswk.co/YyfkXp for the original article) which had the title “because employees can’t be trusted”. It highlighted how ludicrous the command and control techniques are that companies use to prevent their employees from, as they see it, “taking advantage”.

It made me think about how we focus on the problems caused by the minority so that we treat our employees in a reverse Pareto way. If you’re not familiar with it, Pareto observed that in most relationships approximately 80% of the effect of activities comes from 20% of those activities. An often quoted example of this is that around 80% of the profit in most businesses are generated by 20% of their sales.

I don’t know if anyone has ever looked at this for employees, but my bet is that 80% of the problems come from 20% of the employees, and this distorts our view of the general workforce. We devise complex and costly procedures to try to control their wayward behaviour, and completely ignore the effect that these controls have on the majority. In doing so we send a message to those employees, no matter how diligent and hard-working you are, we have no respect for you and we know that you will take advantage of us at the first opportunity. If you have ever been on the receiving end of this type of message you will know how damaging this is.

I recall a classic example from early in my career when our personnel system required a “back to work interview” for every employee who had more than a week off work due to illness. There was no discretion allowed, because it was believed that managers would take the easy way out and find a reason not to undertake the interview. In other words they didn’t trust us either! The employee in this case was a supervisor with 20 years service who had been off sick following an operation. This employee had not had a day off in 15 years, and was one of the most reliable and conscientious employees in the factory. You can imagine her reaction when she was treated like a naughty schoolgirl. Despite my best diplomatic efforts to sugar the pill, she was incandescent. I doubt that the company ever got any discretionary effort from her after that, and it certainly destroyed the previously good relationship we had.

I often see questions like “How do I motivate….” being asked on internet and LinkedIn forums. The answer is easy, stop doing this sort of thing! Focus less on the rotten apples and concentrate on the 80% of employees who don’t cause any problems. If you start to create an environment where that 80% feel that they are part of the solution and not part of the problem, you will find that they will fully justify your faith in them. Not only will their performance take off but they will start to take responsibility for controlling the wayward 20%, because they don’t want their hard work spoilt, and the peer pressure they will exert will be far more effective than anything your system can deliver.

A prime example of this was given to me during a tour of the Jaguar Land Rover factory on Merseyside. This had once been a Ford plant with a poor reputation for quality and employee relations. It had all the usual multinational controls which had absolutely no effect on the poor quality, high absenteeism etc. etc. When it was decided that the factory should be converted to manufacture the new Jaguar range, following the acquisition of Jaguar by Ford some years ago, a great deal of effort was put into changing the culture of the plant into one which would produce high quality vehicles. The hard work paid off, and this plant is now highly successful, with largely the same workforce previously employed to make the old Fords. Several things struck me about this tour. One was that the person leading the tour was not a manager, but someone drawn from the shop floor, another was his obvious pride in the work they were doing, and third was his comment that some of the old workforce couldn’t make the transition and had decided to leave. Rather than being forced out by some management process, peer pressure had resulted in their decision.

I am sure that like any organisation there were still things that could be done better, but it is still a great example of what happens when you get the employees on side, and the success can be seen in the fact that sales of cars from this plant are growing rapidly, despite the economic situation, and they are expanding capacity and taking on additional staff.

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Customer service – the potential value of employee engagement

Having  posted some time ago on the subject of poor customer service, breakfast television this morning had a feature on a survey which showed the financial benefits of good customer service. Apparently a customer receiving good customer service spends up to 39% more than those receiving poor service.

I understood that the survey related to the retail environment, but I believe that the point is equally valid in a business to business (b2b) situation. In fact probably more so, in that many, if not most, b2b transactions are part of a long-term supplier relationship which has long-term value far greater than the immediate sale.

An interesting point made in the report was that businesses, both retail and b2b, spend considerable amounts on marketing and promotion to get customers to the point of purchase.  At the same time they often spend very little on ensuring that the experience at the point of purchase, and the after sales service, ensures that the customer feels valued, resulting perhaps in them spending more as the survey suggests, but more importantly becomes a fan who will both promote the supplier to their contacts and come back themselves and spend more in the future.

Many businesses who have picked up on the importance of customer service have tried to address the problem by training. However, in my opinion, although raising awareness among the staff, and providing them with a range of options with which to respond to customers, are part of the solution, it will only work where the staff attitudes are right. This is the difficult bit, and it isn’t solved by encouraging the employees to force a smile and parrot “have a nice day”.

First of all it must come from the top with consistent policies and actions that show that the customer really is the most important person in the business. Get that wrong, by acting in ways which conflict with the message, will just breed cynicism in the staff and make matters worse.

Then, most important of all, is that the employees are treated as valuable members of the team that delivers these policies. After all they are the people who are the first, and sometimes the only point of contact, not the management, and this is where employee engagement is key.

It is a fact that most front line staff are not the most highly paid in any business, but evidence shows that pay alone is not a motivator. It can be a demotivator if the pay levels are inadequate, but paying more once pay levels are at what is understood as the norm for the job, and preferably a bit above, won’t help solve the problem of poor attitude which is at the heart of most poor customer service. If  however the business and its management have a consistent policy of treating their front line staff with respect, providing them with the tools they need to do the job and leaving them to get on and do it, they will very quickly develop a response from these staff which will transform their customer service and a lot of other areas of the business as well.

This is obviously a simplification of what is required, but in essence the solution is simple, however that doesn’t mean it is easy! While this blog is not the place to expand on the subject of employee engagement, getting it right will have a profound and substantial effect on business performance and if the survey that prompted this post is right then an increase in sales of up to 39% is not a bad start.

For more information on employee engagement, and examples of how it benefits businesses in all sectors go to http://www.btmengagesemployees.com.

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Employee Share Ownership – a nice thought but does it deliver?

In a recent presentation to members of the City of London business community the UK deputy prime minister, Nick Clegg, advocated that more companies offered shares to their employees citing the example of the John Lewis partnership. As an incentive he said that the government would cut red tape and reform the tax system to make this easier.

In his comments he equated employee share ownership with an engaged workforce which would deliver better performance across the organisation. Now I have no doubt that an engaged workforce will produce all the benefits he stated, but I do not believe that share ownership alone will deliver this. Ownership of a small number of shares will not change the way an employee feels about his or her employer. They will still be powerless to influence the way the business is run and have their voice heard, unless the business is run in a way that permits it. Bad management practice is as prevalent in companies where employees own shares as any other, and it is this that needs to change in order to develop an engaged workforce not the ownership of a piece of paper.

If companies don’t operate in a way that produces an engaged workforce, and want to access the benefits that an engaged workforce can deliver, then they have to change the way they manage to a much more participative model. This is not a short term initiative but a consistent long term approach which delivers performance beyond what most businesses would believe possible. This is not a just a theory. I and my colleagues have applied this approach in real businesses and have seen the results it produces  (a ten fold increase in profit from £300k to £4m+ in six years is documented in my earlier blog “a workforce set free”).

So by all means give your employees shares or some other incentive but don’t expect it to produce an engaged workforce. If that is your aim then there is a methodology which will deliver the changes needed to deliver it called Breaking the Mould, and a group of practitioners who can work with your company to make it happen. If you want to know more I can be contacted at trevor@uniqueconsulting.co.uk.

A business lesson in the power of engagement – from a football team?

A business lesson in the power of engagement from a football team.

I am not that interested in football (soccer for non UK readers), but a recent result on the breakfast news caught my attention, or more precisely the circumstances that surrounded this particular result.

The club involved was a relatively minor player in the Scottish premier division called Inverness Caledonian Thistle. Now the team at the bottom of this division would not normally be that newsworthy on the main UK news channel, even though they had won their match the day before by 6 goals to 3. However the events which led up to this result were.

This team, having achieved promotion to the premier division the previous season, were struggling, and after 13 games were firmly anchored at the foot of the division. They had won only 2 games, drawn 3 and lost 8, and had scored only 13 goals while having 25 scored against them. Things were going from bad to worse and, according to the coach, on the Friday before the match they had the worst training session ever.

What seemed to have turned things around was that, in desperation, the coach got the team together, and they jointly agreed the strategy and tactics for the game. As the 6-3 win showed, this had a dramatic effect on performance. I believe that this was because it was now their strategy and tactics, not those imposed on them, and they moved heaven and earth to deliver.

Since this story had piqued my interest I have monitored their progress over several weeks just to see if this was a flash in the pan. Their first test came the following week when they played Glasgow Celtic, one of the two top teams in Scotland and one with huge financial resources and international class players. Predictably they lost but were not disgraced, and in subsequent games have slowly pulled away from the bottom of the league. As a club from a small city with limited resources, with the best will in the world they are not going to win the league when you compare them with the top teams. However they are certainly punching above their weight, having won four games since they first came to my attention and scoring 16 goals while only conceding 15. A significant improvement on their early season form!

This is just another example of how people respond when they are allowed to create their own solution, rather than having one imposed on them, and the power that taking ownership of the solution can release even in a poorly performing team, whether that be in football or in a business environment. Their challenge now is to make the change sustained, or now that things have begun to improve will the coach feel that it’s time to take charge again and destroy all the progress made? Only time will tell, but for the moment things seem to be looking up and I for one will be looking out for them when the match results are announced each week.

Employee Engagement – Good for your health and your wealth.

When talking about employee engagement in a business context the focus is understandably on the positive benefits it delivers for the business. By chance I caught a radio programme driving back from a breakfast meeting that reminded me that there are also significant benefits to the health of employees working in an engaging environment. I had heard of the research, called the Whitehall Studies, which provided the evidence for this conclusion, but had filed it away at the back of my mind and to all intents and purpose forgotten about it until this programme gave me a nudge.

The programme focussed on the work of Professor Michael Marmott who has followed the health of a group of over 10,000 civil servants aged 35 to 55 (2/3 men and 1/3 women) based in London over many years. The study was initiated after it was found that, against all expectations, the long-term health of senior staff, particularly with respect to heart disease, was far better than that of their subordinates. In fact, rather than being tough at the top, it was far tougher lower down the pecking order. Moreover there was a direct relationship between the position in the hierarchy and the incidence of heart disease, the lower the grade the higher the risk.

This effect of status affecting health outcomes has become known as the Status Syndrome and has been seen to be globally applicable.

In order to establish the cause of this health impact, this group of civil servants have been studied over a number of years, and the results analysed after the other risk factors, including the classic risk factors for heart disease, had been adjusted for. The clear conclusion was that there was a correlation between risk of heart disease and the level of control over the work carried out. Hence the result that highly ranked staff, although in demanding jobs, were at low risk as they had a high level of control over their work, while lower ranked staff were working in a much more controlled environment with much less control, and consequently were at higher risk. Interestingly the effect was as strong for perceived control as for real control, funny thing the human mind!

Among the conclusions drawn from these studies was that policies which gave people a stronger say in decisions about their work produced positive long-term health benefits; and that is exactly what is at the heart (pardon the pun) of programmes which deliver real sustainable employee engagement.

From a business perspective the driver for employee engagement programmes are the effects that they produce right across the business in terms of improved financial results as well as the less direct benefits of reduced labour turnover and absenteeism, reduced accident rates and even improved levels of innovation

So there seems to be no doubt about it, employee engagement is good for your health and your wealth.