A version of this article was first published in my HR column on Troy Media.
A few weeks ago I sat with a small group of business owners who wanted to talk about culture. For each of them, culture ranks as one of their key human resource worries - how to shift their culture in a meaningful way, or maintain a culture they see as critical to success. One of the advantages - and responsibilities - of being a business owner is that you have the final say on the culture in your organization.
What is culture?
Too often we talk about building culture as though it were a knob you turn. In fact, culture is an output - the observable manifestation of a myriad of factors that interact and coalesce to create a unique imprint. Inputs that shape culture include strategy, structure, decision-making rules, rewards, customers, values, who you hire, policies, mission, and so on. You can see culture in how your lobby is decorated, and you can feel it in how employees treat each other. It usually takes outsiders only a few words to describe the essence of your culture.
How do you influence culture?
I do not understand the mystique that surrounds culture change. To me, tackling culture requires the same approach you apply to any other business problem: What is your goal? Where are you now? What is your plan to close the gap? You begin with a vision for your culture. Then you take a hard look at what your culture is today. If there is a gap, you systematically look at the key inputs that shape and influence culture and assess which of these you need to address to get a different output. For example, if you envision an egalitarian culture where everyone has a voice, decision-making processes that include some and exclude others will not support your cultural vision. If you aspire to a culture of innovation, a reward system that punishes failure will quash that dream. The important thing is to look at all of the inputs that can shape culture and determine which are most critical to shaping the culture you want to build. Those are the ones you will want to target to align with your cultural vision. You also want to ensure your inputs are not in direct conflict and sending mixed messages. That only gets you the reputation of saying one thing and doing another.
Culture-building strategies that can save you time and money
There are six things you can do to fast-track your culture building efforts:
If you really want to drive change, don’t carry a megaphone
Stealth is vastly under-rated as a change management strategy. Contrary to popular belief, you don’t need to start with a mesmerizing communication program that tells employees what is wrong with them and how they must change. You need to start by doing things differently. Quietly, consistently, differently. Trust me, people will catch on.
A version of this article was first published in my monthly HR column on Troy Media June 24, 2015.
I recently read a blog by marketing guru and all-round provocative thinker Seth Godin entitled “The fruitless search for extraordinary people willing to take ordinary jobs” (June 4, 2015). It took me back to a board room conversation about executive pay. Every company has a ‘compensation philosophy’ that it uses to guide how it sets the pay of employees, from the CEO on down. We talked about the challenges we were having meeting the performance expectations of shareholders and our need to increase the level of talent in the organization. Then, as if we had just forgotten the previous conversation, we reconfirmed our compensation policy - to target pay at the market median (otherwise known as ‘average’). We were doing exactly what Mr. Godin proposes as lunacy - expecting above-average talent to deliver above-average results for average pay. Guilty as charged. Reflecting on this got me thinking about other ways organizations and leaders ‘kill’ the potential for excellence:
Rate everyone’s performance as ‘above expectations’. A few years ago I had the opportunity to help a client ‘fix’ their performance review process. We discovered there was nothing wrong with the performance criteria, the forms or the process. The problem was the ratings - the average performance score was 4.2/5. Only 10% of employees scored a 3 (‘meets expectations’) and no one scored less. If the organization was delivering exceptional results perhaps this statistical improbability could be overlooked. But it wasn’t. The organization was reinforcing average performance and getting exactly what it deserved - average results.
Reward loyalty and effort. Long-service, loyalty and effort are all laudable and should be encouraged. But they are insufficient if the goal is to create organization excellence. The world stopped being a meritocracy several decades ago. One of the most common reasons I hear for keeping long-serving but poor-performing employees around is their knowledge and institutional memory. We are in the information age. It is time to think long and hard about how you are managing and transferring knowledge in your enterprise. The statute of limitations on gold service pins has run out.
Offer a defined benefit pension plan. You are not enjoying one of these unless employed by a large corporation or anything resembling a government. Had I understood the implications of the pension when I was 20, I would now be happily retired and vacationing on a desert isle. Pensions are wonderful things and of tremendous benefit to employees and society, and I wish we all had one. They are also guaranteed to stop people who really need to get out and do other things from voluntarily leaving your organization.
Ask extraordinary people to work for average leaders. Talent is attracted to talent. If your goal is to bring in exceptional people, you need to staff your leadership roles with people who will inspire and engage them. A strategy of recruiting exceptional people to shore up an organization’s weaknesses is guaranteed to create a revolving door.
Make personal development optional. My job requires me to regularly ask people ‘what is on your current development agenda?’ The answers I typically hear makes me want to tear my hair out. ‘Nothing really’ or ‘I actually don’t have a development plan right now’, or ‘I still need to have that conversation with my boss.’ I used to think people were busy working away on things designed to help them get better and just didn’t want to tell me about it. I turned out to be wrong. Many of us don’t seem particularly concerned about honing our performance, as if personal excellence has little to do with organizational excellence. Leaders, when they put off having those conversations with their teams, are complicit. Organizations who take a casual attitude toward people development will never deliver consistently outstanding results. Because for a business to survive these days requires constant improvement, and we’re not just talking about processes and IT systems.
Building and sustaining organizational excellence requires exceptional people dedicated to the task and supported by the right values, expectations, processes and leadership. Jack Welch was a lighthouse for all of us on the topic of organizational excellence. As the CEO of GE he taught us exceptional performance is a relentless and disciplined pursuit, not a happy accident. Jack may have retired and moved on, but that idea still burns bright.
Seth Godin, June 4, 2015.
According to recent surveys, employee engagement is at an all-time low. At the same time, the focus on engagement seems to be at all-time high. Even worse, organizations have handed off driving employee engagement to the human resources department when so clearly it is a leadership accountability. The culprits of low satisfaction scores of old - poor wages or working conditions, lack of training and tools, insufficient communication, no recognition, lack of empowerment - have largely been resolved in many of our work places. And yet malaise is increasing. What is going on and how do we fix it?
Why we are disengaged at work
Recession fatigue. The fragility and inconsistency of the economic recovery is wearing us down. For most organizations cost-management and ‘operational efficiency’ seem to have permanently replaced growth and innovation as a strategic vision. It is hard to get excited about pinching pennies 7 years in a row. The human spirit needs a more meaningful purpose.
Technology fatigue. Whatever lines used to exist between work and life have been erased by the phone-sized computer we carry in our back pocket. Other than the few hours when we are asleep, chances are we are constantly multi-tasking job and life responsibilities. Although humans invented computers, we are not computers and we do not function well when we are all-systems-go, 24/7. The human physiology needs a different set of rhythms and programs.
‘Just world’ hypothesis fatigue. There was a time when we believed in a just world - that commitment and hard work were rewarded and the world, including the workplace, was a fair and just place. Instead, we see a world that is not so fair. The rich and powerful get richer and more powerful while the rest sit on the sidelines waiting for a turn that never comes. Average CEO pay has risen 22% since 2010 while average wages have declined or barely kept pace with inflation (Mishel & Davis, 2014). It's no wonder employees are disgruntled.
Middle child fatigue. Drawn in by the now infamous War For Talent argument (McKinsey & Co., 1998), organizations have concentrated their recruitment, development and retention efforts on executives and future executives. The remaining time is spent trying to manage the performance and exit of under-performers. Meanwhile, 85% of the workforce - solid contributors who are critical to success - have been left on the sidelines. Discretionary effort and emotional engagement are hard to muster when no one seems to be paying attention.
Engagement fatigue. It is possible we are all tired of being surveyed and then told that on top of everything else we are expected to do, we have to work on our attitude. There is no evidence proving organizations that measure and manage engagement in the same way they tackle equipment maintenance have more engaged employees. Workplaces visibly humming with engaged employees are probably not worried about measuring it.
How to improve engagement
Rather than focus on measuring engagement and spending countless days in post-survey focus groups and action planning committees, I have some ideas about how to instantly improve the engagement of employees:
Vision. Give people something to believe in and strive for that ignites their imagination and spirit. Say it like you really mean it.
Balance. Take the IT system off-line for 12 hours each day and/or encourage people to deal with pressing personal issues during work hours, whenever they may arise and no matter what is going on at the office.
Equity. Share the wealth. Consider skipping the executive team retention bonus and distribute it to the customer service reps or safety officers instead.
Respect. Treat everyone like they are important today and a critical part of the organization’s future.
Leadership. Ask teams to vote for the person they want as their leader and appoint them. Repeat annually.
These may seem like radical ideas at first blush. But, frankly, if you are really serious about having people show up at work excited, committed, giving it all they’ve got you are going to have to do something really different.
A version of this article was first written for my column on Troy Media and is posted at http://marketplace.troymedia.com/2015/01/29/5-sure-fire-ways-to-improve-employee-engagement/
CEO Pay Continues to Rise as Typical Workers Are Paid Less. Mishel & Davis, Economic Policy Institute, June 12, 2014.
The War for Talent. The McKinsey Quarterly, 1998 Number 3.
Because it is January, chances are you are frantically trying to schedule year-end performance reviews. The dreaded performance review - quite possibly the most detested HR program ever invented. It doesn’t matter what process, form or technology is in place to accomplish this task, it is always bad. But what if I were to tell you that you can put an end to the madness? It is probably not realistic to eliminate the task altogether (someone from HR will hunt you down eventually), but you can put an end to the dreaded part. I know I did.
Step 1: Focus on performance planning, not performance review
How would you feel, as a fan, if your favourite hockey team showed up on the ice without a game plan. Instead of carefully crafted and well-rehearsed strategies and plays to get the puck in the net, the coach decided just to ‘play it by ear’. That is what a lot of leaders do with their teams. Instead of investing time and energy in crafting well-considered performance contracts that align tightly with business objectives, a lot of leaders leave their direct reports to ‘wing it’ on a day-to-day basis. I have seen large, complex organizations with serious strategic objectives fail to engage employees in anything resembling a robust performance planning process. Each member of your team should have clearly defined deliverables that directly align with your deliverables, which should directly support your boss’ deliverables, and so on. This process takes effort, but at the end of it each of your team members will have a concrete business plan they will use to prioritize their time and performance. They will know what is expected of them and align their activities accordingly.
Step 2: Hold weekly review meetings based on the performance contract
When I took on managing a senior team my coach gave me a piece of advice: hold weekly 30 minute update meetings with everyone. The prospect of that seemed overwhelming to me at the time, but I decided to trust her and give it a shot. While it wasn’t always easy, and sometimes the weekly meeting drifted to a bi-weekly meeting, I can tell you it worked. For 30 minutes each week, team members provided a short and snappy update against their performance plan. Anything not directly related to the plan was dealt with in a separate meeting. What did this accomplish? Focus. Momentum. Timely, relevant two-way feedback. No surprises. Results. My team got the important stuff done. This is what performance management (and people leadership) is all about. More importantly, as a team we knew we were contributing in a significant way to helping the organization achieve results and we felt good about our accomplishments.
Step 3: Watch performance review become a non-event
When formal mid-year or year-end performance reviews were due, it was a non-event for us. Everyone knew where they stood because we tracked this on a regular basis. And because I knew my team were achieving their goals, I knew I was delivering on my commitments to my boss. So instead of spending time arguing about and negotiating performance ratings, we spent our time talking about development and career goals. And that is how you engage employees. Not by handing them a report card like they are still in grade-school, but by helping them paint a picture of their future.
I have many shortcomings as a leader, but performance management is something I was pretty good at. But only because I was intentional in building it into my management routine and relentless in executing against it. So make this the last year you say you hate performance reviews. It’s January, after all. Time to get on that performance planning process.
This month's blog was inspired by a conversation on building organizational alignment with DC, a newly appointed CEO.