Sunday, 30 August 2015

The ABC for successful business performance

"Employee engagement bombards me at workshops, conferences, seminars, social media forums, in journal articles, survey reports and conference room presentations. Everybody’s talking about it. Most don’t know what they’re talking about."

Jim Shaffer (pictured right) has spent the past 35 years helping global companies improve business performance through strong leaders and high performing people. His clients have included FedEx, IBM, Kellogg’s, Marriott, Verizon and Visa. He is also author of The Leadership Solution, a classic treatise on leadership, change management and communication, which has been frequently listed as one of the top “must have” business books.

I wanted to speak with Shaffer to explore the link between communication and business performance. In this interview he shares his view on what employee engagement is and is not and how communication can add value to the business. Plus, what he thinks great leadership should do.

Gloria Lombardi: Different definitions of the term employee engagement have been used over time, and you argue that lately, some of the core ideas have been lost in translation. In fact, you talk about 'the overselling of engagement'. 

Jim Shaffer: Many people use the term 'engagement' arbitrarily and in a very informal way; what they really mean is that they have involved their people. You will hear them saying: ‘We engaged our people at that meeting’. But, having engaged employees doesn’t mean that they attended your events; it doesn't mean that they showed up; and it doesn’t mean that they went through all your training programs.

Employee engagement is a condition inside an organisation that causes the business performance to improve.

GL: What is required for this 'condition of employee engagement' to form?

JS: Two things need to happen. One is cognitive identity, which is what happens when people identify with an organisation’s values. There is a great affinity between the employee’s values and the values of the business. Take the Mayo Clinic, whom I’ve advised. Their people are very caring people. There’s a huge sense of purpose among them and throughout the organisation. They go home at night feeling good about what they did at work. That’s cognitive identity.

The second element is discretionary effort. When employees have to choose between different options, they will be inclined to pick the one that will help improve the company. They understand the organisation’s goals well enough to know that if they do X as opposed to Y, it will cause the business to improve.

GL: What types of activities lead an employee to improve business performance?

JS: Four different things need to occur. First, people need a line of sight between what they do every day and the results they can influence. For example, if I’m working in a manufacturing operation and I’m making a part that is going to be sold to a specific customer, I need to know and understand that customer’s requirements so I can make sure that those requirements are met.

Second, people need to be involved in the decision-making process. They need the autonomy that’s required to make the right decisions so the customer’s requirements are met or, when appropriate, exceeded.

Third, employees need the right information at the right time so they can make the right decisions and take the right actions to meet the customer’s requirements and improve the business.

Finally, people need to understand why it’s in their best interests to help the business succeed. That’s the “what’s in it for me?” factor that is delivered through both intrinsic and extrinsic rewards. Intrinsic rewards include working environment and that sense of purpose I mentioned. Extrinsic rewards include pay and benefits. If those four conditions exist, you are very likely to have an employee who is engaged.

GL: Despite the many methodologies and studies around measurement, it is still hard for some organisations to measure employee engagement effectively in a way that produces concrete business results. What's your advice?

JS: Various diagnostic tools that we use can tell us whether employees are engaged. Some questions we use in our assessments measure drivers of engagement. Others measure the degree of engagement. But, the real issue isn’t whether people are engaged or not. It’s whether people are engaged in doing those things that meet customer requirements which, in turn, improve business results.

Engaged people can do good things and bad things. They can help an organisation succeed. They can sabotage the organisation in order to get even with a lousy supervisor. Some of the really horrible things that are going on in the world today are being led by highly engaged people. Likewise, some of the really wonderful things that are going in the world are being led by equally engaged people.
What we should care about is not whether our organisation’s engagement scores are a 65 percent positive or an 85 percent positive. We should care about creating the condition that helps our organisation win.

A lot of people also lose sight of the fact that creating an engaged workforce requires resources - strong leaders, intense communication, the right pay plans, skills, knowledge, tools, superior work processes and a culture of excellence and continuous improvement.

That investment in resources needs to pay off. If it doesn’t, you’ve likely drained value. A primary goal of engagement has to be to add value. This is something that often gets lost on people who are passionate about engaging people but forget that engagement is a means to a better result. It’s not an end unto itself.

GL: Could you give me some concrete examples of organisations that are approaching employee engagement that way?

JS: There are a lot of them, but not nearly enough. I worked with the communication team at ConAgra Foods’ to reduce damage in its supply chain. In one large distribution center, people were getting mixed messages about what was important - quality or productivity. Leaders said quality and productivity were important but when push came to shove, too often productivity - getting product out the door to customers - won out. They also pointed out that their incentive plan was weighted more toward productivity than quality, which was perpetuating a productivity focus.

Employees they said they would gladly improve quality if there was an equal emphasis on quality and productivity.

Over a period of five months, we worked with the leaders and their people to better align the systems and processes so they communicated that both quality and productivity were important. The systems and processes included leadership communication, rewards, recognition, work processes, measurement, recruiting and training. The place shifted from being a productivity-first culture to a quality-and-productivity culture.

By getting everyone involved in the improvement effort, by eliminating mixed messages and aligning the organisation to the customer, we were able to improve quality by 65 percent and productivity by 16 percent.

Using similar performance improvement efforts we helped FedEx Express increase export sales by 23 per cent with a 1,447 percent return on investment. We transported the approach to five more FedEx Express locations and $6 million in revenues and a 1,667 percent ROI.

I could tell you similar stories that took place at Owens Corning, ITT Corporation, Honeywell, and other companies. Focus on customer requirements, bring leaders and the people together, remove root causes to performance gaps and celebrate success.

In each case people were excited, turned on and passionate about taking their organisations to heights they’d never thought they could achieve.

GL: This is a clear example, and yet another confirmation, of how communication can dramatically influence the performance of a business, both badly and positively depending on how it is managed. 

JS: There’s huge opportunity here. I spoke recently with the head of commercial operations for a large pharmaceutical. He was complaining about his communication people always “addressing business problems backwards,” as he explained it. He said they start with the activity they plan to employ - a poster, video or meeting - instead of identifying and removing root causes the problem.

Every department, every function must be seen as adding measurable value. The communication function is no exception. Where communication people are acting like business people first, communication people second, they’re in huge demand. And they’re making some pretty big bucks. Those big bucks, remember, are investments that are generating acceptable returns.

GL: You also make a distinction between communicating to change as opposed to communicating about change. The former is what we need today, you say. Could you tell me more? 

JS: Historically, the communication profession and in particular internal communication, has been formal channel oriented. People manage social media, newsletters, videos and PowerPoint presentations at all employee meetings. That’s a pretty narrow niche given the enormous communication environment that exists in most organisations.

Their job has been to communicate about what is changing or about to change. But what contemporary communication at companies like I’ve discussed earlier do is manage communication to remove communication breakdowns that cause under performance. Communication breakdowns include mixed messages that I discussed earlier. They include inaccurate information, missing information and slow moving information. When you eliminate these breakdowns, you can cause performance to rise. That’s managing communication to change versus about change.

Both are important. But typically, managing communication to improve results adds more value.

That’s a fundamental shift that has to be made if people want to add value. People need to ask themselves: Do I add value or not? Did that newsletter, tweet, video, all employee meeting, poster or whatever add measurable value to the organization? Would the customer be willing to pay for the cost of that activity? That’s the lean definition of value. Is the customer willing to pay for it? If not, don’t do it. If so, keep it up. Do more.

The advice I give to communication people who attend our workshops is: Starting today, start shifting your work today to things shareholders and customers care about.

I’ve worked with many communication people to help them make this shift. I know it can be done. Is it easy? No. If it were easy, everyone would be doing it. So differentiate yourself by adding value - perhaps a little today, some more tomorrow and even more next week.

GL: How should leaders themselves approach communication? 

JS: They should start with inspecting what they do and asking themselves if their actions communicate what they want to be communicated about vision, strategy and execution. They should perform a calendar review. What does it say about their priorities?

They should ask if what they’re championing is what is critical to them. What’s first and last on their agendas? What questions do they ask? Who do they recognise and celebrate? All these things signal to people what’s important to a leader.

Leaders need to make sure their communication people are getting the skills and knowledge needed to perform a more value-added role. These include consulting skills, change management skills and increased understanding of the business and financial sides of business.

Many leaders also need to shift from too much dependency on communication people to “do the communicating” for them. Instead they need to build the organisation’s capability to communicate better. Superior communication should be a strategic capability. It’s the difference between fishing for someone and teaching them to fish.

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This article originally appeared on simply-communicate