Never Stop Coaching!

The Importance of Effective Coaching

Over the weekend I had occasion to purchase and read Strengths Finder 2.0. If you are not familiar with it, Strengths Finders is the assessment tool first developed in 2001 by the Gallup organization.

The essential concept behind it is that people who are given the opportunity to focus in the areas where their talents are most pronounced are much more likely to be engaged and have much higher levels of productivity.
A lot of these concepts were discussed in detail by Marcus Buckingham in his series of books and it isn’t my intent to go into them in detail, but there were some things that I feel are worth mentioning and reinforcing again.

The first is data collected by Gallup indicating that individuals who feel that like their work is aligned with their talents are six times as likely to describe themselves as highly engaged at work and three times as likely to describe their overall quality of life as excellent.

The reasons this matters to us as organizations-
• Engaged employees contribute at a level 20 to 25% higher per capita than non- engaged employees
• Organizations with high engagement scores outperform their competitors in every key performance metric
• Highly engaged employees are 80% more likely to stay with their employer

Now let’s examine the role of your manager in your engagement-
If you manager’s primary style is:
Ignoring you then the chance you will be actively disengaged is 40%
Focusing on your “development needs” or weaknesses the chances decrease to 22% you will be actively disengaged
Focuses on your talents or strengths there is a less than 1% chance you will be actively disengaged!
I think it is important that we recognize that active disengagement is not a passive behavior. These are people who come to work every day and spread their negativity. Studies estimate that this group represents about 17% of the U.S. workforce.

I think it is also important that you can’t count on these people to leave. They are not necessarily any more likely to leave than partially engaged employees. These are the energy vampires who tend to be heavy utilizers of your health and time off benefits, more prone to industrial illness and accidents and just generally drain your productivity.

I have been reading a lot lately that the Human Resources function is in jeopardy of becoming obsolete because responsibilities like administering compensation, hiring and selection, coaching, and corrective action are being “delegated” to line management.
It makes me frankly laugh my ass off. In organizations I have been associated with those responsibilities have always belonged to line management. My role as a human resources professional is to be a consultant; to provide systems and training to those managers so they do those things well, in short to build capacity. The professions obsession with compliance has always been a disappointment to me.

The other thing that bothers me is that we still refer to skills like coaching, setting expectations, giving feedback, and taking corrective action as soft skills. Look at Gallup’s numbers again; is something that can have that significant of an impact really soft?

I also get frankly annoyed when we take the course that interpersonal skills like emotional intelligence and empathy are somehow gender based. They are competencies and talents that need to be identified and reinforced.
Anybody that knows me or has read anything I have written knows I am a passionate advocate for employee engagement. It is quite simply a better way to manage organizations and increase quality of work life and productivity.

My model is pretty simple:
• Manage for commitment not compliance.
• Hire and manage whole people.
• Include congruency in your hiring, selection, and coaching.
• Hire hard- manage easy.

This is a journey not a destination and as the Gallup numbers underscore it doesn’t stop with hiring or onboarding. Coaching and reinforcement is an ongoing process, but the return on investment is astronomical….

Creating Complete Solutions

The Complete Approach
My colleague Brad Federman shared a blog post today that I found interesting and very accurate. His point was that creating a great culture doesn’t mean that it is going to represent and be a great place for everyone and automatically translate to high employee engagement.
In fact in my experience this is one of the issues I observe constantly in organizations as they approach and fail in creating a highly engaged environment- they address it as a program or initiative rather than a fully integrated strategy or culture.
I remember back in the late 90’s when I had a client who had decided to “flatten” their organizational structure and embrace more of a “self-directed” workforce. The problem was that in large part their strategy was to eliminate most of their middle management infrastructure, buy everyone a book on teamwork and a team T shirt and declare that they were now embracing this new culture.
Problem was they never defined the parameters and prepared the teams, didn’t set and reinforce appropriate decision making boundaries, and the majority of the population wasn’t receptive or comfortable to this type of approach. In short the culture didn’t fit their intent.
As I mention in my book, Managing Whole People, when you try to create a high engagement culture you can never forget a couple of things-
• You hire whole people. This means their values and attributes as well as their knowledge, skills, and abilities.
• Don’t borrow someone else’s culture. Their culture is a function of their shared values, attributes, and history. You can emulate some of their practices, but culture is unique to the organization.
We also tend to glom on to good cultures and bad cultures. In my opinion the goodness or badness is determined by the people who share it and the outcomes they agree on.
Another colleague of mine, Joseph Skursky, has a model he calls Hire Hard, Manage Easy. The context of this is that every hire is a key hire and ensuring every hire fits either the current culture or the culture you aspire to is critical.
Studies show that over 40% of newly promoted or newly hired managers, including new executives, fail within their first 18 months on the job. The reason most typically cited for the failure isn’t capability, but rather fit, which to me is another way of saying culture.
So you might be asking – what is my point. I have several:
• You will never survey your way to a highly engaged environment.
• If your hiring practices don’t include consideration for cultural fit you will not create an engaged environment.
• Highly qualified, smart people who don’t fit your culture will underperform, quit, or both.
• Create and reinforce your desired culture not someone else’s.
• Culture permeates everything; hiring, training, promotion and development, communications, etc. It never stops and you can’t address a single element and expect sustained outcomes.
• You have a culture whether you intended to or not. Being intentional is better.
• Culture is shaped by leadership, but belongs to everybody.
Do the work. Define your culture, hire accordingly and be consistent in reinforcing it….

The Wrong Direction

Caught in the Circle

Over 100 years ago Frederick W. Taylor introduced the concept of scientific management to the world and unfortunately to a large extent his theories are still the foundation that much of the relationship between employer and employed are based upon. Taylor’s position is that the world is divided into two kinds of people, managers and labor. Managers think and labor does. This is also where the concept of white collar versus blue collar originated. I would tell you that much of our failure to evolve our management and leadership theories go back to this premise. Even today most managers and supervisors are promoted based on their technical capabilities rather than their abilities to select, train, develop, and deploy talent. We still buy into the concept of human capital. When scientific management really caught on we wrote a new social contract-rather than individuals learning a skill and negotiating the value of that skill the model promoted breaking tasks down into simple, easily repeatable steps that were easy to train and could be monitored for consistency. By breaking the skills down and removing the thinking part, you also lessened the value of the activity being performed. This was the model for a long time. You came to work for your employer, did your work competently and obediently and in return your employer took care of you, providing you with wages, health and retirement benefits, and other inducements that required little or no action or participation on your part. Edward Deming and others recognized the flaws in the model in the early Forties, but because the U.S. was the dominant economy and it wasn’t “broken” most U.S. based organizations rejected his theories of more worker involvement. In fact even the legal framework of collective bargaining in the U.S. has the principle of Taylorism embedded within them. Under Federal law employers are required to collectively bargain about wages, hours, and working conditions if it can be demonstrated that the employees choose to surrender their individual rights to a collective bargaining representative, typically a union. The interesting thing is in the U.S. employers are not obligated to negotiate over the means of production, like the introduction of technology or similar decisions. This model created a kind of corporate paternalism that still exists in many organizations today, a codependency. Do what we ask as an employer and we will take care of you. I personally think it is a bad model, disrespectful on its face, assuming employees are not capable of making or at least participating in decisions about their work and their employment. This is a compliance based model and after over 30 years as a human resources and C level executive and management consultant I completely and totally reject it, so a number of years ago I created an alternative model I call moving from compliance to Commitment, or little c to Big C.

There are five distinct elements to my model.

  • Respect
  •  Responsibility
  •  Information
  •  Rewards
  •  Loyalty

Respect

Respect is the cornerstone of any healthy relationship and is especially important in the employment environment. Respect means that you describe my job to me in a way that has context and I can see where my role fits into the bigger picture. It means that there are clear performance expectations and that I receive balanced, meaningful feedback as to how to improve my performance and contributions. If I am not meeting expectations, that information is presented to me in a timely and constructive manner with the objective to eliminate the variance between my expected and actual performance. It also means that I am held accountable for working up to my potential and meeting expectations. Respect means we have a social contract between equals. I do not expect you to “parent” or take care of me. I’m not just talking about diversity here. This value must be consistently reinforced by every level of management every day. We must be prepared to explicitly state to employees, “I respect you too much to tolerate less than your best performance. I respect you too much to nag you about independently executing your tasks and responsibilities. I will not be co-dependent with you.”

Responsibility

Similar to respect, responsibility means that I have clear expectations, periodic feedback and a reasonable level of control over as many dimensions of my work as possible. I am allowed to demonstrate personal curiosity and creativity and that you, the management or executive, measure my work in terms of the results as well as the process. In concert with respect, responsibility means that I carry out my activities independently and competently to the best of my ability. If I need assistance, I ask for it. If I am unclear, I ask for clarification. I hear a lot about empowerment. I like to say to employees that the flip side of empowerment is accountability. If you “own” the process, you also “own” the result. We should not let employees off the hook for simply appropriate performance. Employees who “own” the process and the result demonstrate higher levels of productivity, lower absenteeism and reduced turnover. All of these results increase the bottom line. This refers again to clarity of purpose: What is my job? How does it fit in the Big Picture? Management owns the responsibility for clearly answering these questions.

Information

Information is critical to creating an atmosphere of commitment. I have often said to employees that I reserve the right to answer a question they ask me in one of three ways:

• I know the answer and it is ________.

• I don’t know the answer, but I will do my best to obtain it for you.

• I know the answer, but I am not able to share it with you for reasons of confidentiality or related concerns.

My experience has always benefited by sharing as much relevant information with employees as possible. By providing them with context, they arrived at solutions that were much more effective than what I could design working in isolation. By creating an environment of collaboration, they feel invested in the solution.

Rewards

Rewards are always an interesting area to explore. In my definition, rewards include appropriate compensation as well as other areas that directly relate to employees sense of fairness and equity. I include everything from base compensation and incentive programs to awards for excellence and access to specialized training. I recommend to my clients that they ask their employees, “What represents meaningful rewards and recognition to you?”

I believe in communicating with employees the specific reasoning of compensation philosophy (i.e. who we see as our competitors, our “target” market, and other related areas). I also tell employees that “market compensation” is an artificial value that the market imposes on a particular set of skills and abilities based on supply and demand, as well as criticality to the mission of the organization.

Compensation is not meant to represent the value of the employee. Are doctors and professional athletes “better” people than anyone else? If we use the standard of compensation to determine the value of a person, drug dealers are at the top of the food chain and people like Mother Teresa at the bottom. The most important dimension of rewards is the perception of equity. In this context, I mean equity in terms of perceived fairness, not actual ownership.

One of the most important concepts we grow up with is fairness. Do I feel that my compensation, promotional opportunities, etc., are consistent with my contributions? How did you decide to pay me? Why did someone else get the promotion rather than me? Can you explain it to me? That wording is critical, explain it rather than justify it.

Loyalty

I often hear that the Gen X and Millennials are not loyal. I disagree. The new generations have a different view of loyalty. They expect reciprocation.

They will give their loyalty to organizations that invest in them. They understand the concept of “at will” employment at its most literal. They stay with an organization as long as they see the relationship as being mutually beneficial. They do not subscribe to blind loyalty to authority. Is that wrong?

My definition of loyalty: while someone is working in my organization or in collaboration with me, our relationship has integrity and respect. We hold each other accountable and meet our mutual obligations. I do not measure loyalty in terms of tenure or “obedience”.

Loyalty is a personal relationship. Typically we are “loyal” to individuals or groups with in whom we have shared values and whom we trust. To the average employee, his or her direct report is their “world”. If they feel that their immediate supervisor has their best interest in mind and treats them with respect and fairness, their loyalty will be earned and authentic (i.e. not political loyalty). The key to authentic loyalty: you earn it through action and time. I also submit to you that if the organization does a good job of executing on the first four elements of respect, responsibility, information, and rewards, loyalty will follow.

Information that I have garnered on the “emerging” workforce – our future employees, customers, shareholders, and stakeholders – make these issues even more relevant. From an employment standpoint, Gen X and Millennials have stated five requirements for them to form a meaningful relationship with an employer:

• Satisfying work content.

• Association with an organization that they respect and that respects them.

• Mutual commitment to them and their careers.

• Meaningful and timely feedback to help them improve their skills.

• Equitable compensation.

In addition to desiring feedback, they also describe four other elements in an optimal employment environment:

• Maximum delegation.

• Personal responsibility and “ownership” of their projects and tasks.

• Clear boundaries and a sense of the big picture.

• Shared ownership (credit) for end results.

Current Tends That Concern Me

When I watch a lot of the discussion going on these days there are a number of areas that concern me:

• The Affordable Care Act creates access to health care for theoretically everyone, but it doesn’t address the shortage of health care providers in many jurisdictions to actually see patients and provide care.

• Study after study shows that over 60% of our current health care related expenditures are related to conditions that are directly or indirectly lifestyle related, but the ACA doesn’t address lifestyle management or individual’s responsibility to participate in managing their own health.

• I see organizations like McDonalds, Wal-Mart, and other employers under assault because they don’t pay living wages. In my experience many organizations have entry level positions where the wages are commensurate with the skills and market conditions. Individuals can almost always enhance their earning abilities by learning new skills and increasing their value to the organization.

• I see jurisdictions stepping in to help – Seattle decided to impose a minimum wage of $15.00 per hour for all employers within its municipal jurisdiction. I am going to go out on a limb and suggest they didn’t do a cost benefit analysis to determine what effect this might have on pricing of goods and services and aggregate employment

- Portland, OR and other cities are interjecting themselves into the employment relationship between employers and employed and trying to dictate things like compensation, paid time off, etc.

What problem are they trying to solve and why given that there are multiple State and Federal agencies who operate in that space why do we need another player.

We aren’t talking about discrimination here; we are talking about injecting themselves into the employment relationship.

I live in the real world. Right now less than 30% of the workers in the U.S. rate themselves as highly engaged in their current employment relationship and that represents a huge lost opportunity, but I fail to see how municipalities interjecting themselves into the employment relationship is going to address even one of the factors I identified as creating or sustaining engagement. I would also submit that given the fiscal circumstances that most cities, counties, and even States find themselves in in large part because of outdated entitlement programs that there providing us with the benefit of their expertise and leadership will help any.

There are organizations like Google, Starbucks, Dutch Bros, Les Schwab, and others that are very successful and treat their employees very well because they get that the two are related. I have yet to find a governmental entity on that list, let’s not move back to organizational codependence or corporate paternalism…it doesn’t work.

An Urgent Issue!

The Problem We Need to Fix NOW!

I came across a couple of things recently that unfortunately reinforced what I have known for a long time- we need to put serious energy into how we identify, train and deploy managers and leaders.
A recent Gallup poll concluded that 82% of the time organizations fail to make the right choice in selecting candidates for leadership and management positions.
James Harter, Gallup’s chief scientist for workplace management was quoted as indicating that only 18% of the population of current managers possesses a high level of talent for managing others.
The critical talents identified by Harter include:
• The ability to motivate others
• The capability of being assertive balanced with making people comfortable
• The ability and commitment to making tough decisions
• The ability to build and maintain strong relationships
The big culprit is our selection process, in the U.S. the majority of managers are promoted based on one of two criteria-
• Their competency at previous non-managerial roles
• Their tenure in the organization
The Gallup study concluded that typically 1 in 10 employees possesses all the traits necessary to be a strong manager, but that 20% of current managers have the capacity to increase their capabilities with coaching and training.
I am not a proponent of the managers are born not taught model, but on the other hand I do believe that managerial competency is a skill set that needs to be taught and reinforced separate and apart from a candidate’s technical skills.
A recent survey conducted by the Society for Human Resources management concluded that the top three challenges facing organizations today are directly connected to the competent management issue.
The survey identified leadership development, employee retention and engagement, and re-skilling the human resources department as the big three. The reason these are linked is that previous Gallup studies concluded that less than 30% of U.S. workers rate themselves as engaged, and …managers account for 70% of the variance in employee engagement scores.
What I find personally very frustrating is how have we let this go on for so long?
If we knew that a particular flaw in our manufacturing or production process was bleeding off significant amounts of productivity and profitability and that 70% of the cause could be traced to one process would we ignore it for this long?
There is enough data to demonstrate that engagement isn’t ethereal and something soft and intangible, the correlation between engagement and organizational performance has been clearly demonstrated time and time again.
Engagement is a culture and a deliberate process, it isn’t an event. It doesn’t belong to any particular department or position. It needs to be cultivated and deployed throughout the organization.
Engaged cultures start with some things that make many of us uncomfortable including; a foundation of trust, mutual respect at all levels of the organization and reinforcement throughout the organizations selection, reward, and performance management systems.
It is relationship oriented rather than a function of compliance, policies, and procedures. I think that is one of the reasons we struggle with it.
We don’t teach the skills that create and reinforce a culture of engagement in most of our universities and business schools. We tend to teach tactical skill sets rather than relational ones.
And I believe strongly that these skills can be taught. The Gallup organization may take the position that only 1 in 10 has all the attributes to be an outstanding manager or leader, but you don’t need all 10 to be competent.
Most organizations do not begin to invest in that leadership development until the person is already in a leadership role. Their research and my experience conclude that taking that approach results in a significant dip in productivity for those new leaders while they try to master their new responsibilities.
Other research indicates that 40% of newly promoted or newly hired leaders fail within their first 18 months. The primary culprit for this failure is interpersonal or so called soft skills.
This entire theme correlates to Gallup’s research that most “leaders” were promoted into their roles because of their previous competency in “technical skills”.
The Center for Creative Leadership points out those organizations who prioritize leadership and focus on it proactively enjoys a 66% increase in business results.
Teaching those skills to people who are well into their career is more difficult and expecting managers who have never mastered those skills themselves to coach and reinforce others is a lousy strategy.
There are probably a lot of reasons organizations don’t do this training and development proactively. I hear that they are concerned about creating false expectations of guaranteed promotion; they are concerned that employees will immediately expect increased compensation for this new “capability”, and the other big one is time and expense.
On the other hand do we really want to just accept a competency rate of 20% and a potential productivity leak of 70%?
Contrary to popular opinion I don’t believe an MBA prepares people for leadership. It exposes candidates to systems and integrative thinking and how the disciplines interact together, but there is little emphasis on the management of talent, so the answer isn’t to populate your management ranks with people with no managerial/leadership experience or training, but MBA’s from “name” schools…
I also agree with the perspective from the SHRM survey that “re-skilling” the human resources profession is a critical priority.
Although I have moved out of the traditional venue of human resources into first C level operating roles and then into management consulting I am disappointed when I see surveys and writing from colleagues in the profession that continue to assert that the most important role of HR is compliance with the myriad of regulations and restrictions that guide our relationship with employees.
Similarly I see tomes written on the application of technology to hire, manage, deploy and optimize performance. I am not technology phobic by any means; I do adhere firmly to the belief that technology is a tactic, not a strategy.
I don’t believe that becoming certified as a HR professional, or gaining your black belt, or Six Sigma will necessarily make you a better leader or manager or give you the capability to deploy the skills of effective management to others.
When I think of “re-skilling” the human resources profession and function I would like to see us focus in these areas:
• Technical skills. The proliferation of rules and regulations has indeed made the profession more complex as has the application of technology, phenomenon like social media, outsourcing and global workforces, and related challenges. We need to be technically proficient, not only in our craft, but to understand the businesses and organizations we serve.
• Project Management. Similar to the Total Quality Management movement I believe human resource competency in core areas needs to be deployed broadly and deeply rather than be seen as a departmental competency. It is fundamental to the management/leadership role.
• Facilitation. We need to help our client organizations recognize that by building relationships with individuals as people first and resources second we can create enormous gains in sustainability, productivity, and profitability through alignment of organizational and individual goals.
We are at a time and place in our society when we need to consider people, processes, and systems in an integrated manner and stop trying to apply analog solutions in a digital environment.
The old employment model, which largely originated during the Industrial Revolution, has been outmoded for some time. In this model, a feudal-style relationship came to pass. Employers sought the skills and contributions of labor and in return for those contributions, the employer would provide for a certain degree of economic security, career progression (as the employer saw fit), and retirement, usually in the form of defined benefit pension plans. In return, the employee was expected to provide loyalty (spelled o-b-e-d-i-e-n-c-e) in the form of tenure. The employee was expected to stay with the employer as long as the employer saw fit.
For the record that model is dead, let’s bury it!
I have a model I call managing whole people. It is a model based on five factors: respect, responsibility, information, rewards, and loyalty. It is a partnership based on trust and mutual respect. I believe it yields engagement. The latest studies would tell you that employers with high engagement outperform their peers on every key metric!
As you might suspect my model isn’t going to be widely proliferated with a management cadre composed of less than 20% of those involved in leadership having the skills and attributes necessary to manage people not human capital.
The numbers aren’t getting better, so what are we waiting for…?

 

Where Have All The Flowers Gone?

I borrow this line from the classic song whose refrain “when will they ever learn” resonates with me to my chagrin and disappointment.
Today I read another post about how the human resources department and profession are relics of a bygone time and largely obsolete.
I have been involved directly and indirectly with the human resources profession; and yes I see it as a profession, for going into my fourth decade. I have been at times a harsh critic of the methods and priorities of the profession, but given the state of the state- employee engagement at still dismally low levels, voluntary turnover at historically high levels, and the available talent pool shrinking rather than growing I ask, so who are you going to turn over the management of talent and organizational structure to when you eliminate your HR function?
I strongly agree that the profession of human resources management needs to be re-prioritized and refocused. Much of what we delegate to human resources departments today in my mind belongs to managers.
Things like setting appropriate expectations, giving appropriate and constructive feedback, assessing performance and using well thought out systems to allocate compensation adjustments should be in the hands of managers, not a staff function.
You shouldn’t be allowed to send employees who are broken to HR to repair or terminate.
HR departments shouldn’t have to spend the majority of their time tracking compliance with various Federal and State laws that were enacted because we didn’t value people appropriately and treat them with the respect they are entitled to as a person, but until we make a profound change in how we define and measure management and leadership that may remain the case.
When I have hired and trained human resources professionals I have looked for and managed them with a focus in three key areas:
• Technical expertise; do they understand the science as well as they art that makes up the management of talent?
• Project management; do they possess the capacity to deploy the skills and abilities to hire and manage staff to others and design systems that are user friendly and aligned with organizational goals.
• Facilitation; do they understand and are they capable of creating integrated models that include consideration for the three critical elements of every organization- People, Tasks, and Systems and balancing them appropriately?
The purpose of a well-constructed human resources function in my opinion is about identifying, acquiring, aligning, and retaining the talent necessary to achieve the organizations goals and objectives.
There are a lot of sub-systems that cause that to occur, but that is my simplified version.
As anyone who has read my work or heard me speak I am an advocate of a new social contact- employee engagement.
Employee engagement is taking a lot of heat lately, I believe largely because we haven’t landed upon a common lexicon and practice model. In some ways it reminds me of the Totality Quality Movement from a few decades back.
Our industrial management model including the legal infrastructure in the U.S. is based on a very exploitative, top down model from the early 20th century – Scientific Management.
The primary premise of scientific management is that there are two kinds of people, management and labor and that you should try to dumb things down for labor to create the lowest costs and highest expendability possible.
Almost sounds like a precursor to the concept of human capital doesn’t it?
Our labor relations models still reinforce that concept. If you take a look at the National Labor Relations Act it defines the rights of labor versus management- the right to negotiate over wages, hours, and working conditions. You might note that collaboration between management and labor about process is missing.
It is a highly paternal model designed to protect employees from management.
Doesn’t sound like much of a platform for employee engagement does it?
A post on The Motley Fool the other day advocated a model that would likely cause the writers of the NLRA to cringe- they advocated doing away with formal sick time and vacation policies and instead create an environment where people trust each other and focus on the work. Employees take time off when they need it and you manage the exceptions rather than trying to legislate.
In my own community the City Council decide it needed to assist employers and employees with this pesky issue by mandating a paid sick time policy for all employers within the City’s jurisdiction.
I am not sure what caused this insight. It seems a survey indicated that many organizations already provide this benefit on a voluntary basis. I don’t know if somehow they became aware of widespread abuses that they felt they needed to resolve or what exactly stimulated their action.
The interesting thing is if we go back to the Founding Fathers one of the concepts embedded in the Constitution was personal competency, the right and responsibility of individuals to learn skills and to negotiate their value in the marketplace.
When I look at our situation locally and nationally I see government organizations that are at or approaching bankruptcy because of paternalistic entitlement programs around things like paid time off, retirement, and compensation.
I am not quite sure why they decided those of us in the private sector required their help…
We do have an economic situation where there are a number of under employed and unemployed citizens. We also if the studies are correct will be reaching a place where at least in some professions and trades we will see talent scarcity.
Top performing organizations have embraced and implemented employee engagement and employment branding models to tap into the performance differentials you gain with an engaged workforce- they did this voluntarily, not in reaction to government mandates.
So what’s my point? I actually have several:
• Our leadership and talent management models are outdated and costing our economy billions.
• That is a leadership issue not an issue to be resolved by scrapping the HR department.
• We need to create opportunities for employees and employers to collaborate and align. That will require new management models and a new social contract between employers and employed.
• The government; local, State, or Federal doesn’t bring much to the party. If they want to add value update the provisions of labor laws that were written in the mid- 20th century to reflect todays reality and reinforce a relationship between adults rather than additional parental legislation and action that is counter-productive.
We are leaving trillions in opportunity costs behind every year by not adopting new models. Let’s recognize this and reinvent our management and leadership models rather than continuing to pillory the HR profession.
There is plenty of blame to go around….

Examining the Social Contract

The Social Contract Part Deaux

I have been following a thread for the last few days on LinkedIn that intertwines two concepts I find very relevant and timely.

The title of the post was Is Engagement Dead? The author argues that as the traditional relationship between employer and employed continues to break down and become more transactional and temporary that concepts like employee engagement have lost both their relevance and their efficacy.

I disagree on both points, but I think it requires a bit more examination.

Employee engagement means many different things to different people. For many you see it described in terms of happiness or morale and by others in terms of tenure.

I define engagement as alignment between the organization and their employees as well as other stakeholders. I think that things like increased satisfaction, reduced regretted turnover, and other factors are positive, but ancillary outcomes of a strategy to create and reinforce that alignment.

Much of the discussion in the thread talks about programs and processes typically led or managed by the human resources organization, and why they fail to achieve their intent. The engagement survey is singled out for particular focus.

I agree that engagement is a culture rather than a program and that surveys are a snapshot rather than a strategy.

I don’t agree that redefining the social contract means that engagement is no longer necessary or important, in fact quite the contrary.

Much of our old social contact was based on an outdated relationship model that in my mind reinforced a form of corporate codependency. If you are loyal to the organization (spelled compliant and obedient) the organization would take care of you.

The advent of international marketplaces, the internet and a variety of other factors has blown that model up. I also believe that creating a mindset and referring to your employees and their combined talents and abilities as human capital contributes to that. It is a transactional not a relationship model.

In my opinion true engagement can only occur between willing and able partners, it is an exchange of value or as Ken Matejka, in his book Why This Horse Won’t Drink describes as where an employee feels psychologically, emotionally, and physically impelled, they willingly give up other choices.

They are not complying, but rather are sharing commitments with the organization based on perceived shared values and desired outcomes. There is no unequal power relationship here.

My own experiences with engagement are grounded in some personal beliefs that I have developed and believe in-

  • The most critical elements for the foundation of any relationship, personal or professional are trust and respect.
  • Everyone is entitled to respect for their personhood if nothing else.
  • Relationships are the most important systemic dimension in every organization.
  • People who share your values and are congruent with them will perform at a much higher level than those who are neutral or don’t share them.

Studies also show that when employees join a new organization unless specific actions are taken they go through stages beginning with the potential to be engaged and then diminishing over time. The stages look like this-

  • Stage one- enthusiasm and excitement about the new job
  • Stage two- they begin to question their decision
  • Stage three- they are disillusioned
  • Stage four- they consider leaving
  • Stage five- they begin exploring options
  • Stage six – they receive an offer
  • Stage seven- they are forced to decide whether to quit or stay
  • Stage eight- they quit and stay

I don’t think most organizations want to live in this space, especially stage eight so I recommend an alternative strategy that I think incorporates both the new social contract and can properly executed create an engaged environment.

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.

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.

Realistically all of your employees will not be with you forever and that is a good thing. You need to constantly refresh your talent pool and get new energy and new ideas. The key is that while employees are in your employment they are engaged. In many cases they represent your best resource for attracting the new talent you need.

My colleague Michael Beck posted a great piece on why the majority of employers worldwide are doing the engagement thing wrong, addressing it reactively rather than proactively and I couldn’t agree more. Much better to build engagement into the fabric of your organization through appropriate selection and hiring, but it doesn’t stop there.

He pointed out that 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 and 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.

Add to that 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. The interesting thing is that we have seen at best incremental improvement over the last five years.

So in conclusion given the potential upside I am not prepared to declare failure and walk away from the concept or criticality of employee engagement.

Let’s embrace the new social contract and engagement and let’s commit to doing it right!

 

Creating Winning Teams

Creating a Winning Team

I had a chance to catch a few shares by others that really reinforced for me the critical elements of an organization that performs in a sustained way.

The first was an article on leadership training that not only discussed content, but more importantly timing.

The article titled The Lego ® Blocks of Leadership, published by international consulting firm BlessingWhite  points out some key considerations that bear repeating, and often.

The first factoid from the Center for Creative Leadership points out those organizations who prioritize leadership and focus on it proactively enjoy a 66% increase in business results. To me this is similar to what organizations that focus on employee engagement recognize better selection and management yields better business results.

The next tip is what is really important. Most organizations do not begin to invest in that leadership development until the person is already in a leadership role. Their research and my experience conclude that taking that approach results in a significant dip in productivity for those new leaders while they try to master their new responsibilities. Other research indicates that 40% of newly promoted or newly hired leaders fail within their first 18 months. The primary culprit for this failure is interpersonal or so called soft skills. They simply don’t fit with their new team.

The reality is that foundational leadership skills like setting clear performance expectations, giving and receiving feedback constructively, taking appropriate corrective action, coaching, and delegation never become unnecessary or don’t apply at every level of management.

Teaching those skills to people who are well into their career is more difficult and expecting managers who have never mastered those skills themselves to coach and reinforce others is a lousy strategy.

There are probably a lot of reasons organizations don’t do this training and development proactively. I hear that they are concerned about creating false expectations of guaranteed promotion; they are concerned that employees will immediately expect increased compensation for this new “capability”, and the other big one is time and expense.

The other big one is expediency. We have a need so we plug someone in and hope for the best.

In my experience leadership is about both capacity and skills. Some people will emerge as great leaders, but in my opinion most people are capable of being trained to be competent managers.

I have contrasted previously the difference in philosophy and approach between the private sector and the military.

In our military academies every graduate is exposed to and evaluated on leadership competencies as well as particular technical capabilities. Leadership isn’t an option. Not all graduates will achieve flag rank, but competence is expected.

On the contrary in the private sector we hire people largely on their technical capabilities with little emphasis on leadership capacity. When I describe technical I include skills like marketing, finance, etc. not just people with technical or science backgrounds.

Contrary to popular opinion I don’t believe an MBA prepares people for leadership. It exposes candidates to systems and integrative thinking and how the disciplines interact together, but there is little emphasis on the management of talent.

I have long held the belief that organizations with superbly trained front line and middle managers will outperform their counterparts who don’t make that investment. I have had a chance to validate my belief multiple times both as an executive and a management consultant.

The data is very clear that in the majority of instances where employees leave a position voluntarily their relationship with their manager is a critical factor.

The reason that building this skill sets into the foundation is so critical is that research also shows that the shelf life of most training is around 18 months. After that unless the learning and development is reinforced the retention rate is less than 10%. Given that in the U.S. alone we spend $100 billion annually on training that isn’t very good return on investment.

At New Paradigms LLC we agree whole heartedly with BlessingWhite. That is why we offer our Leadership Series which we break down into foundational and advanced leadership skills.

We want to build leadership capacity for our clients, a reservoir of leadership talent that can be deployed as needed.

The other great share I happened on was a republishing of an article from Inc. Magazine on why the annual pay raise is dead. This piece really reinforced my own viewpoints so perhaps that is why I liked it so much.

Here are some of the key thoughts-

  • Pay is a crucial part of every company’s employee motivation and retention. And the reality is, how we structure compensation is as important as how much we pay—if not more so.
  • Every position at every company has a specific value. This value is composed of what the position does for a company in and of itself (regardless of who occupies the position) and also what the person hired for that job brings to it. Seniority, cost of living, or social constraints should never be a part of the equation. Output is what matters.
  • Before I hire, I determine what each position is worth in terms of its importance to the success of my company. Setting this guideline helps to insure that all compensation is fair. Tying changes in compensation to contributions above and beyond the job description then becomes easy—both for employees to accept and for management to enact.
  • Waiting for an annual review, or until an employee asks for additional compensation, is not only frustrating and de-motivating for the employee but also dangerous for the employer, because it gives the employee time to think that her contributions are going unnoticed or that she might be better treated elsewhere.

I totally agree with these points. As I have put it previously compensation is not a reflection of an individual’s worth as a person, but rather the rent we pay them for the application of their skills and abilities on our behalf.

I want to be clear that I support the concept of a living wage and I have been a lifelong advocate of compensation that is fair and equitable based on the skills, market conditions, and the ability of the organization to distribute compensation relative to other expenses related to operating the organization.

In the models I have constructed I have always tried to create very clear line of sight for employees about what we ask them to do and what we pay. I am very open about how we make decisions around pay both for the total organization and on an individual basis.

I think it critical to talk with employees about how they can increase their compensation by increasing their value to the organization.

I have clients who hire people who are minimally skilled and they pay those people appropriate to their competitive market and those skills. What we also do is make it clear that we try to create and expect employees to increase their skills and value to the organization and increase their compensation accordingly.

We also have employees who are transitional. They work for us while they are in school or other developmental activities and sometimes we don’t have the capacity to retain them in their new career. We don’t resent them; we applaud them and feel grateful that we got to partner with them in their journey.

We hire whole people, but we don’t make promotional or compensation decisions based on their personal situation or desired lifestyle. That is a cognitive choice they make and we respect them too much to parent them or create a codependent situation.

Maslow’s hierarchy is very real. Compensation is a very critical component of safety and security. If you can’t feed yourself or afford meaningful shelter that is a critical focus. As we move up the hierarchy I find that compensation becomes more of a hygiene factor unless I manage it properly.

A simpler way of putting that is if you feel underpaid you likely resent it and withhold contributing at your highest level, but once you feel fairly paid or more you don’t perform at a higher level just for the money. You are looking for a higher level of alignment.

I also believe that once you cross a certain economic threshold “cost of living” isn’t a meaningful factor. Do we really think highly compensated executives feel the impact of a slight increase in the Consumer Price Index?

I also like the idea of compensation tied to market and organizational performance because to paraphrase another quote –

“Teams don’t win, teamwork wins”

It isn’t enough to have great talent; you have to have great talent that has a clear line of sight between organizational objectives and their own goals and works toward them collaboratively. That is where that leadership thing applies.

Doing these things well and building them on a foundation of trust and respect is how you create and sustain engaged organizations, and engaged organizations outperform their peers every time…

Being Aligned

An interaction with a number of clients and other people over the past couple of weeks has reminded me about how important alignment is, both personally and professionally.

As many know I am an advocate of and hopefully catalyst for engagement. To me engagement represents that sweet spot where the goals of the organization and the goals of the individual are aligned. I recognize that many other would describe engagement as high morale, happy employees, or a number of other factors. I don’t discount any of these I just see them as some of the ROI of engagement rather than engagement per se.

I am still puzzled and a lit disappointed in the fact that our body of knowledge about engagement has grown enormously over the last ten years or so, but our application of the concepts hasn’t moved nearly as quickly.

There is enough data to demonstrate that engagement isn’t ethereal and something soft and intangible, the correlation between engagement and organizational performance has been clearly demonstrated time and time again.

In my opinion engagement is a culture and a deliberate process, it isn’t an event. It doesn’t belong to any particular department or position. It needs to be cultivated and deployed throughout the organization.

Engaged cultures start with some things that make many of us uncomfortable including; a foundation of trust, mutual respect at all levels of the organization and reinforcement throughout the organizations selection, reward, and performance management systems.

It is relationship oriented rather than a function of compliance, policies, and procedures. I think that is one of the reasons we struggle with it.

We don’t teach the skills that create and reinforce a culture of engagement in most of our universities and business schools. We tend to teach tactical skill sets rather than relational ones.

A young attorney who I respect a great deal elected to take part in a leadership series that I co-developed. He is doing that even though he has no employees at the current time. He has decided that skills like treating people respectfully, giving and receiving feedback constructively, setting clear expectations, and having a positive intervention model when his expectations aren’t being met will serve him with clients, coworkers, family and friends.

He mentions that those skill sets weren’t part of his educational experience in either his undergraduate studies or law school. I suspect his experience isn’t unique.

When you start with a foundation of trust and respect and you apply those other skill sets engagement and alignment come much more easily.

Engagement doesn’t look the same in any two organizations, the outcomes and benefits are similar, but true engagement fits itself to the unique organizational culture.

Aspiring to build and maintain an engaged environment is I believe a best practice and many of the elements are consistent, but there is no one perfect way.

Millennials are much more about engagement than proceeding generations. We think of engagement wistfully, they expect it and are willing to keep looking until they identify organizations that can offer it to them.

I respect that. I think that if we all decide that alignment is a superior way to do things we will create a society that makes the world a much better place.

So be mindful. Think about what values you choose to be aligned with and then commit to actively seeking relationships where that is reinforced. If you find yourself in a place where you aren’t engaged or aligned then to paraphrase Gandhi “be the change you wish to see in the world”.

Who knows, maybe it will catch on…

 

So I was Thinking…

Things That Make Me Pause

I like to think of myself as a social moderate and a bit of a fiscal conservative. I am a big believer in personal responsibility and accountability, employee engagement (because it is far superior to the alternative), and treating everybody with respect.

Over the last 30 plus years I have been a human resources professional, c level executive, and management consultant. During that journey I have learned some truths

  • The most critical elements for the foundation of any relationship, personal or professional are trust and respect.
  • Everyone is entitled to respect for their personhood if nothing else.
  • Relationships are the most important systemic dimension in every organization.
  • People who share your values and are congruent with them will perform at a much higher level than those who are neutral or don’t share them.
  • I am entitled to my values and beliefs; however I am not entitled to inflict or enforce them on others.

I spent much of the formative part of my life in Arizona. In fact unlike many of the residents I was actually born there.

I left AZ for almost thirty years before returning for just over three years recently. I had always loved the pioneering spirit of the state and many of things it had to offer, but I have to say that there are things I don’t recognize or certainly don’t align with.

As anyone who gets the news is aware a bill passed both houses of the state legislature that would allow business owners to decline to do business with an individual or organization because of their religious beliefs. I think on its face that seems innocuous, but we aren’t just talking about choosing not to do business with a company, but literally refusing service to people.

There is discussion that this is primarily focused on people with alternative lifestyles as Federal law specifically excludes discrimination against individuals based on gender, nationality, age, and several other characteristics. I think we forget that at one time in the not so distant past it was in fact legal to discriminate against people for these views. I happen to see that as a darker part of our history.

Certain religious fundamentalist located outside the U.S. would be very supportive of this position I am sure. They actually do actively discriminate against people based on the protected classes I mentioned above. I don’t see them as company I would like to be associated with.

I have seen a lot on the blogosphere saying that allowing this kind of distinction isn’t that different than business owners choosing to prohibit gun owners from bringing their weapons into their place of business even though AZ has an open carry law.

I personally find that comparison absurd. Carrying a weapon is bringing an appendage and exclusion can be based on safety and other considerations. I find it difficult to say that there are any safety considerations in preventing people from entering a business while under the influence of their religion, ethnicity, etc.

I want to be clear I am not anti- gun. I don’t personally feel the need to carry one on my person on a regular basis, but if one is inclined to and has the appropriate training and mindset so be it. I don’t believe minors should be able to carry weapons; concealed or otherwise into schools and I believe that there are venues where unless you are in law enforcement or the military you don’t need to be armed.

I don’t know why some of the members of my former state are so angry. Before this latest round of exclusion there was a lot of controversy around illegal aliens, primarily of Hispanic origin. In fact one of the most prominent law enforcement officials in the state has made protecting citizens from illegal aliens one of the cornerstones of his policy.

I am glad to see that elected officials like John McCain, Jeff Flake, and even the Governor appear to be in alignment that this is a bad law.

I think you should have the right to your views and beliefs. I think you should be able to choose to a point that you do business with unless you are serving the public.

I also don’t fully understand how proponents of this law are going to determine how someone violates their beliefs.

  • Is it how they look? Be careful because you may be violating Federal laws.
  • Is it how they dress? Same issue.
  • Is it their language or manner of speech, or what they talk about?

I just get disappointed when I feel that we have made some progress towards Dr. King’s dream and we are seeing social attitudes become more tolerant and accepting of people whose views we don’t all share and we seem to slide back.

I also think that you can be judged by the company you keep and I wouldn’t like to see too many close parallels with the views of others who we are still engaged in armed conflict with or appear frequently on the despot list.

I can’t in honesty tell you I will boycott AZ if this bill passes, but it will give me pause about considering relocating there at any point in the future.

I guess I will remain consistent with my current prejudice, I am prejudiced against assholes.

In my experience they don’t limit themselves to any ethnic or racial group, gender, sexual orientation, or age. You aren’t born one you become one and it is a cognizant choice…

What do you think…?

A New Social Contract

Engagement- Getting It Right!

So we had a pretty gnarly snow and ice storm this last week in the PNW so I had time for a lot of contemplation and catching up on my reading.

As per usual, topics that speak to the concepts behind employee engagement continue to attract my attention and focus.

I will be honest; I am perplexed with why more organizations don’t invest in a strategy that clearly leads to significantly improved performance in every conceivable key performance indicator. Especially today, when studies are recoding that voluntary turnover was up by almost 50% between 2012 and 2013 and the cost of a new hire is up 15% for the same period.

When you add those statistics to the fact that on average engaged employees contribute almost 50% more per capita and you have to ask – “what’s up”?

Engagement has taken a pretty good pounding because a lot of people still see it as some kind of a motivation tool or a survey to be conducted by the HR organization. Others see it as soft science.

The reality as well demonstrated by organizations like Zappo’s is that engagement is about culture and alignment. “Happiness” is a byproduct.

The other reality is that most employees are reasonably engaged or have the potential to be engaged when they first join an organization; their engagement level usually diminishes over time as reality sets in.

Executives tend to be more engaged that front line employees. Not a huge surprise as they make considerably more money and hopefully have much clearer line of sight on the organizations objectives and progress. The bad news is that is that this often gives them a distorted view of the engagement level of employees across the organization.

A recent BlessingWhite study indicates that the majority of employees see their next significant career opportunity as being outside of their current employer and having control over their own career.

To me that says that fully recognizing that the social contract has cycled back to where employees see themselves in the driver’s seat and no longer view careers in the linear context they have previously means great employers will be looking at a new partner style relationship with employees, especially the best and brightest.

For me that means that we should put a stake through the heart of the concept of human capital, managing people as a two dimensional asset rather than whole people.

The really bad news is that front line sales and service employees typically record the lowest levels of engagement, and it is this level where your brand meets reality.

My experience has taught me that there are a couple of key ways to create and sustain engagement:

  • Hire the right people. I talk and write a lot about things like building a foundation based on trust, respect, and congruency. The reason I do that is because those characteristics of a culture have been proven over and over again to generate outcomes we want.
  • Invest in front line leadership. The criticality of front line management shouldn’t be a surprise to anybody. Heskett talked extensively about the impact of even one bad manager in his book The Service Profit Chain, and it has been discussed extensively by others as well.  Employees have different expectations of their manager/supervisor than previously. The concept of manager as boss is severely outdated. Employees expect their manager to partner with and coach them in their career.
  • Engagement is a culture, not a program and it doesn’t belong to or live in HR. If you ask most human resource professionals what their critical contribution to their organization is the vast majority will answer compliance. Compliance isn’t engaging, it represents the bottom rung of the trust ladder being based on authority and rules.
  • Engagement is not a survey. If you have no intention of making meaningful changes don’t annoy your employees by asking them to respond to a survey. Pre-survey they might give you the benefit of ignorance. Post survey they know you are either incompetent or apathetic.
  • Although leadership and management are a continuum and every manager doesn’t have to be an enlightened leader every manager must be competent at some core skill sets among which I include; setting clear expectations, giving and receiving feedback constructively, diagnosing performance issues and taking appropriate corrective action, coaching to optimize performance, and creating line of sight between organizational and individual goals. These skill sets are critical to every management role. The bad news is they don’t teach these in business school or most university curriculums of any discipline.
  • The best organizations have a clearly defined employment brand. An employment brand clearly identifies for current and prospective employees what you are about. It is reinforced in hiring, training, performance management, and the reward system. Every organization has an employment brand; superior organizations are managing theirs proactively.

So I can’t guarantee that if you follow my rather simple prescription you will suddenly see massive productivity improvements, but you will see improvement if you do the work.

If you are a small organization I recommend you invest your resources primarily in two areas:

  • Hire the right people up front.
  • Train your frontline supervisors

Experience and the data suggest these are the two most important steps you can take…