The topic of leadership is one that consistently takes up space on every social media forum and management development curriculum, but the interesting thing is are we learning and changing anything?
If we look at the opportunity costs offered by things like employee engagement and reduced expenditures in health care from partnering with employees and health care providers to manage health not health care they are enormous, yet over the last few years we have seen minimal progress.
Employee engagement, where employees feel aligned and are contributing at their highest and best levels has pegged at around 30% even though there is an abundance of information tying higher engagement to increased productivity, higher profitability, and reductions in health care expenditures, absenteeism, and related costs.
In many cases the responsibility for increasing employee engagement is placed with the human resources department so I see a lot of criticism of that function including why it should be eliminated or minimally split into two distinct functions; administrative- which would manage payroll, compliance, benefits administration and other procedural activities and organizational development, which would lead talent development, succession planning, and other “higher end” activities.
As a former human resources and C level executives I see a simplified solution like that as an “epic” fail.
The dirty little secret that most of us don’t like to discuss is that engagement doesn’t fail in the HR department; it fails where employees and managers collide.
The problem is that society has evolved beyond our leadership models.
Ted Santos covers many of the issues very nicely in his recent blog post,
“For decades, many CEOs rose from sales and marketing. They were great at knowing the product, customers, driving innovation and selling the organization on a vision. In the recent past, they rose from finance and law. They bought back their own shares, orchestrated financial reengineering, changed accounting practices and down sized the company. They have been the masters at making the organization profitable”.
For over 100 years the prevailing model was that people were at best human capital, their sole purpose was to perform a set of routine tasks. As a result they were usually marginally paid and treated as expendable.
This was the leadership model I “grew up” with. As an emerging leader the skill sets were planning, directing, budgeting, and controlling. Last time I checked these were things you do to rather than with people.
We then evolved into the technology age where technical specialists were exalted and paid very well with the key leadership skill being how to leverage their ingenuity and expertise into marketable products.
Over the last few decades the financial analyst has reigned supreme. This is where we saw aggressive downsizing, offshoring, and other techniques to maximize short term financial return.
I mentioned in a previous blog that the vast majority of the benefits of the financial recovery where “reinvested” in things like stock buybacks and dividend distributions which exacerbates that mentality.
Santos quotes several former CEOs as recognizing this model is untenable for the long term-
“…When I was younger, I worried about managing the money, metrics and processes of the company. As I became older, I realized the business was about people. Therefore, I learned to take care of the people first. When I did that, they did a great job of taking care of the money, metrics and processes. It made my job a lot easier. If only I would have figured that out when I was younger.”
He goes on to say (and I hope he is correct) that the most important skill set for emerging leaders will be that of social reengineering.
This shouldn’t be rocket science. If you look at top performing companies like Zappo’s, Starbucks, Amazon, Google, etc. they have made significant efforts to reengineer their human resources processes not only internally, but externally as well.
Jack Ma, the CEO of Alibaba, spoke directly to this when he mentioned that in his stakeholder model the interests of customers and employees come before shareholders. When he was told that isn’t the U.S. model he simply replied, “I know, they are doing it wrong.”
Another very good post on LinkedIn today reemphasizes this concept with Three Ways to Frustrate Your Frontline Employees-
- Unrealistic Expectations
- Dictate From On High
- Sub- Par Supervision
Now hear is the bad news.
Technology isn’t going to fix any of these issues, nor is lean or six-sigma, or other new age solutions. The other bad news is that none of these three elements live in Human Resources so splitting or getting rid of your HR department won’t fix them either.
It is going to have to get messy. We have to do a better job of hiring, selection, and deployment. We also have to rewire our Leadership paradigm.
I am not going to make any apologies for being a huge advocate for developing and implementing employee engagement strategies in every organization. The key word is strategy. Simply announcing an initiative or doing a survey annually is not going to cause engagement to spread like the Ebola virus in Africa! You have to do some real work.
The first thing you do is to identify the core value proposition of your organization and develop a strategy to clearly communicate it to all of your stakeholders; this includes employees, suppliers, customers, shareholders, and communities where you do business.
The second thing that you do is that you develop hiring and selection processes that ensure that the people you invite to join your organization share the value set of the organization and that the connection between their personal values and your organizational values is transparent.</p>
The third thing that you do is ensure that anyone in a management or leadership role has the competencies and skills to create and reinforce that line of sight.
The fourth thing that you do is make sure all your other systems reinforce the values as well. By that I mean your hiring and selection, training, compensation, performance management, and your succession planning, and promotional decisions.
The fifth thing you do is to benchmark your progress and recalibrate as needed. Perception is reality, if your employees don’t feel aligned with your core mission and objectives they will not perform at peak.
This requires a different model for both developing and defining leadership.
I like the way Jack Welch describes it-
“…leaders are generally not judged on their personal output. What would be the point of evaluating them like individual contributors? Rather, most leaders are judged on how well they’ve hired, coached, and motivated their people, individually and collectively—all of which shows up in the results.”
I guess it isn’t essential that organizations accept the need to evolve and embrace the new management model, but when you weigh the consequences-
- The latest Gallup poll provided some pretty eye opening statistics, including the fact organizations with high employee engagement saw a 147% advantage in earnings per share over non- highly engaged organizations in 2011 and 2012.
- The fact that the Department of Labor estimates that disengagement costs the U.S. economy between $450 and $550 billion dollars annually and for me at least that garners some attention.
- Recent studies indicating that voluntary turnover was up 45% year to year from and cost per hire is up 15% for the same period and you might think that more organizations would be examining their strategies and taking action.
Why in the world would we want to continue with a model that is obviously outdated and not generating the kinds of financial and social outcomes we deserve?
What do you think….?