Employee engagement has never decreased as sharply as over 2010. In comparison with other parts of the world Europe scores lowest, according to research from Hewitt[i]. This is worrying because enterprises with high employee engagement on average outperform their competitors and beat the stock indices even under poor economic conditions. In contrast, more than 10% of enterprises have shown a growth in employee engagement. New, fast-growing and financially successful organisations indicate that some fundamental changes are taking place. A return to old and comfortable times may prove impossible. New values for new leadership are being forged. What are these new values?
Enterprises have been challenged over these past few years to drastically cut costs and to boost employee productivity to realise top line growth. This has taken considerable sacrifices from employees and it has laid a heavy burden on their enthusiasm and their engagement. After a long period of stress, insecurity and confusion many employees and their managers display signs of fatigue and exhaustion. And this situation does not seem to change. Again and again new setbacks surface. To even more emphatically control an enterprise on margin and results may prove counterproductive.
On top of that employee engagement is not an easy subject to cover in the board room. When we look at the balance sheet we do not find the words motivation, enthusiasm, engagement or loyalty. These are the so called intangible assets. One cannot express these assets in terms of a monetary value, but in times of crisis we do draw on the goodwill of our employees, something that is also stressed in the cited research: “Never before in history have so many people felt so disengaged from their work and have felt more distanced from their managers and their organisations.”
A lot of research is currently being done and there are many pointers to how we control and manage our organisations. Dan Pink2 has done research into the science of motivation. He discovered that the traditional form of management by reward and punishment with financial incentives, promotion and dismissal are effective tools when the work is mechanical and simple. However it proves counterproductive when only the least bit of thinking is required. This is, so he argues, because the financial incentive narrows your thinking facilities, while instead, one needs the creative thinking mind for problem solving.[ii] Influential scientific research institutes underwrite the vision that financial incentives have a negative impact on business results and even prove detrimental.
Let this be the bad news. The good news is that there are good alternatives. Alternatives that have proven to be effective in practice and that have shown to be successful in general—but not by rule—outside the walls of the vested organisations. And that is less surprising than it seems at first glance. A traditional and big enterprise, especially a listed one, finds itself in the midst of a complex web of relations, within which it is far from obvious to drop ones ways and make a fundamental shift. At the same time the need to try alternative ways and to attempt to shift the paradigm is unprecedented. When one adds together recent findings on motivation and employee engagement four pillars that may shift our leadership paradigm emerge: meaning, autonomy, support and growth.
Meaningful work is important because people want to make a meaningful contribution. It may differ from person to person but we consistently find that purpose and meaning are important ingredients to good work and a good life. The search for meaning lives at several levels. One of course is the level of the company itself. Companies that have a strong connection to the ‘why’ of what they are doing and that have a clear vision on ‘what’ they want to contribute to this world are more successful than others. An example of a company with a calling which is outperforming most if not all of its competitors is Apple. It is of course a very special company, but at the same time it also is just another company that builds computers, with access to the same resources, the same employees, the same talent-pools, the same money and other assets as any other company of comparable size. And still, the engineers of Apple are the most innovative each consecutive year, they take the lead in new developments, they lead in dominant design, and they have set new world standards for smart phones, tablet computers and laptops. Leadership expert Simon Sinek[iii] thinks that what sets Apple apart from its competitors is that the people with Apple have a strong belief in ‘why’ they do what they do: “We believe that we can break the status quo in everything we do. We believe in thinking differently. And the way in which we challenge the status quo is by designing our products beautifully and making them extremely user friendly. And we also make great computers.” Most companies, says Sinek, aim at ‘what’ as in ‘what are we going to make’ and at ‘how’ as in ‘how are we going to make it and how are we going to sell it.’ His argument is: aim at ‘why’: What do you want to contribute to this world?
There is risk in citing Apple because the company figures in many success stories. And there are other, more ‘mundane’ examples closer to home that are very inspiring nonetheless. ‘Buurtzorg Nederland’ is a Dutch home care provider. They opened their business in 2006 and compete on the Dutch home care market which is a traditional, non-innovative market with high pressures on margins and staff (mainly nurses). From the outset the company worked as a magnet to experienced nurses, a magnet to clients that seek good healthcare and in all reports they score the highest grades on customer satisfaction and professionalism[iv]. This goes radically against the predominant view that there is hardly any credit left to obtain in home care, that being employed only means to do ever more with less and that one certainly should not want to be a client of home care. Buurtzorg Nederland shreds that view and draws a lot of attention from curious journalists and researchers. What makes them stand out?
Buurtzorg Nederland is founded on the idea that the need for care of the client and the craftsmanship of the nurses combine as one, and that one has to trust that these two parties can work out a beneficial home care relationship between them. The organisation is geared to leverage that potential between client and nurse; small scale, self-directing teams of 12 dedicated care professionals, no management but coaching, smart automation and beyond anything a lot of responsibility, accountability and trust. The result? Halfway through the year 2010 the organisation and its revenue had grown from zero in 2006 to more than 2.000 people employed and almost EUR 50 million in revenue.
Purpose and meaning go beyond individual interest, and touch on something of greater and deeper relevance for people and communities, or society at large. The combination of good work and a good life are of great value for a social community. Many thinkers claim that our society is in trouble because we lack a definition of what a good life is. Without the Socratic notion of a good life, or a shared definition of how much of enough defines contentment, we seem doomed to perpetually chase after more and to live a life that is never good enough. People however do not only search for material satisfaction nor do they only find their happiness in things. People do consistently—and maybe now more than before, that may very well be—search for meaning and purpose in life and in living. Through that process also, many people find that meaning and purpose are about deeper connection with others, with life, with the earth and with spirit. These quests for meaning are for the most part contained to private life. The challenge is to bring meaning and purpose into our working lives. It is a contradiction to lead an inspired life and to work in an office environment that reduces your spirit and passion to an ‘outcome’. I have seen so many employees who are very involved in local church work, who excel in community work or who even take on big responsibilities in organising a charity, but for the rest of the week go unnoticed in their day jobs.
In the view of others it is not so much ‘Man’s search for meaning’ as Victor Frankl put it, but very essentially a question of survival of the species. Paul Polman, Unilever’s CEO, says: “We cannot continue to steal from future generations.” Responsible growth means choosing for a future that concerns all of us. We have only one planet. We have to responsibly deal with that fact for the generations to come.
The second pillar of a successful organisation and engaged employees is autonomy, in the sense that people like to decide for themselves on matters of their interest; they like to self-direct. To create space for people to seek out for themselves how to fill in their jobs uplifts their intrinsic motivation and supports them in coming up with smart and valuable contributions. With Google, engineers have 20% of their time to work on their own projects. “They have autonomy over their time, their task, their teams, their technique. And with Google about half of their new products are the fruit of this 20%time.” [v] Products that you know and that you maybe use to your own benefit, like Gmail and Google News.
Also in another aspect autonomy is a word of our times. As an employer it is becoming harder to attract young, intelligent and talented people. It is referred to as the ‘war on talent’. But it is not hard to find talented people. In fact it is easier than it is to find a free lunch table at the Café Dauphine near the Amsterdam Amstel station. There you will find them, young, smart independent entrepreneurs, with their laptop computers and smart phones. Also small establishments in Amsterdam fill with these young entrepreneurs. Or they gather in business centres where small companies share office space and often co-operate in projects. They hire each others’ services and connect through social media. They do not mind to work for the large established firms, but to become an employee? No thanks.
Another example in this respect is The Hub, a social enterprise that has the ambition to support entrepreneurial and inspiring initiatives for a better world, to seed them and to support their development. In a short while The Hub has opened 26 offices over 5 continents, where young entrepreneurs flock together, start their companies and find funding for their business ideas that should contribute to the most urgent social, cultural and ecological challenges of our times.
The way in which the leader of an organisation thinks and acts is of decisive influence on how people feel about their jobs and about the organisations they work for, states George Kohlrieser of IMD.7 One of the most destructive forces in organisations that kills employee engagement is management and the predictable and forceful way of controlling peoples efforts. But we live in the information era where more and more of our work is dependent on the creativity, the resourcefulness and the professional knowledge of our employees. If one wants to stimulate a knowledge worker and spark their enthusiasm, you have to give space. And that is through support, not through management and control.
Fred Kofman[vi] said it beautifully in one of his lectures: “What we want from our employees is their engagement, their heart, their passion, their dedication and their enthusiasm.” The threat ‘give me your passion or else’ does not fit well with that. In exchange for a salary and the promise of a possible bonus, promotion or dismissal the most I can give you is my compliance. I can never give you my heart unless you win it. I must be willing to open my heart to you. I cannot give you my heart and my passion when you control me as if I were a thing. It demands that you sincerely care for me and that you support me.
In an effective and successful work environment values such as ‘safety’, ‘trust’, and ‘integrity’ are of paramount value. I have said it before: the way in which a leader thinks and acts is decisive. Leadership and organisational change work from the top down. So it begins at the top. If you don’t show it there it certainly will not surface in the rest of the organisation. If you do, it may infect a whole organisation. Just as it works to reinforce a negative spiral, it works in the opposite direction for the positive just as well. It is the same mechanism. We live and work in environments that are characterised by quick changes and many insecurities and to deal with this turbulence requires out of the box thinking, inspiration, creativity and high motivation. We must make environments that are safe havens for exploration and inspiring spaces for people to grow and flourish. All that is required is sensible and much needed investments in values led leadership
The fourth element in building organisations with high employee engagement is growth. Growth refers to development as a professional, to development as a team, to development as an organisation and to development as a human being. To start with the first: people enjoy to be good at something and they find honour in that. Nurses love nursing, teachers love teaching, patissiers like to bake and wood workers love to work with wood. People always admire dedication and craftsmanship. These are honourable affairs. As an organisation you will want to support people in what they want to become better at. In that sense it is always a good thing to invest in training and education and to arrange for people to invest in their professional development. Most researchers would agree that it pays dividends. It is interesting to see that in the Netherlands, as in other countries, the first place to cut back on costs are education and culture. Just as in companies one of the first places to cut costs is training and development, while it is one of the few investments where the benefits consistently outweigh the investment.
A second aspect of growth is development as a team and as an organisation. Despite investments in team activities and team building sessions, real teamwork often is more of a theoretical possibility. In most organisations it is not about teamwork but about individual performance. That is what people are scored on. And that is, of course, mirrored in the organisation’s development. And it remains a question if teamwork per se leads to better organisational performance. The work has to lend itself to it. It is always interesting to see how teams perform in group assignments with outdoor events. Teams of fire departments always score high marks; they switch easily and quickly, they focus on the group outcome, they have no competition between team members and they support each other to reach their goal. And in these and similar organisations one is, of course, very dependent on those qualities. You literally trust your colleagues with your life. You will recognise similar patterns of behaviour with teams that cooperate intensively and that perform under stress and where the quality of what they do depends on their joint effort, such as teams in the army and, I can tell from my experience as a chef, in very good restaurants.
Another aspect that touches on this is enlightened by Chilean-American coach and one of the founders of the coaching profession, Julio Olalla. He says ‘we become in the dance with others’: We are fathers because we have children, we are leaders in an organisation because there are people that accept our authority, we are sales people because we find customers that are willing to buy from us, we are teachers by the grace of our students. The quality of our becoming is always relative to others. When people love what we do and when their number grows we become bigger. “Leadership in organisations and growth therein means also to grow and nurture our relations with others, and as a result we grow in these relationships ourselves.” But we mostly do not pay too much attention to it for whatever reason. However, in the end an organisation is nothing much less than a group of people in relation to each other that share a common goal. If you want to be successful, you have to be successful in how you build and maintain relations.
Disruptive and transformational change
Meaning, autonomy, support and growth may be keywords for new leadership and it does not sound all that complicated. Most enterprises will notice this trend and sometimes even experiment a bit, albeit very carefully. Dutch insurance provider Achmea experiments with ‘InShared’. The company has successfully gone back to the historical rationale behind insurance, the ‘why’—it is a way for a community to take care of each other. Theoretically or intellectually this is not such a big deal, but practically it is. Real change is difficult because it involves another way of defining reality in quite a fundamental way, you will have to re-examine the ground of your being, your rationale. It is a fundamental shift to present the future of your company in terms of your contribution to this planet, when you have always stressed the maximisation of profit and shareholder value. What will the analysts say to that? It is for this reason that companies pay lip-service to meaning and purpose, just as many companies pay lip-service to sustainability. But as John Elkington rightly states we are beyond the days of Corporate Social Responsibility or a yearly environmental-report: “What we need to focus on is disruptive, transformational change in our organisations, in our markets and in our economy” [vii].
And that is just the toughest thing to do, because that change is so fundamental. And every year that we wait and hope for old times to return it will become harder. It is like standing by the side of the pool in your swimming trunks: the longer you wait, the colder the water gets. I remember visionaries up till 1997 that prophesied the internet as a hype that would fade. For our enterprises and our societies change is becoming more and more urgent. So if we are beyond the days of CSR and sustainability as we know it now, we must do must do something different. It is time to reinvent the way we organise ourselves on the corporate level and to shift our paradigm and that is why it is fabulous that there are a growing number of entrepreneurs, companies, thought leaders and young and talented people that point us to new ways. I fervently hope that the reason for the cynicism with which some people respond to the values to which I have dedicated this article will soon die out[viii].
We must change, we can change and it certainly is much more fun if we do change the current ways of our big corporations. They can be places of inspiration and motivation, they can be places where we can develop and grow, and they can be places of leadership examples that benefit us also in our leadership roles outside the company as parents and as citizens. Our corporations can be places where we find meaning in our work, where we find room to be creative, where we are supported to excel in what we are good at and where we are supported and challenged in becoming. There may come a time where employee engagement is no longer a troublesome issue, but ordinary and obvious. And there may arrive a day where we do not have to eat our way through articles on these values because they are so common. And oh yes, we may make a decent profit and we may actively contribute to a world that is still there for our children to enjoy.
[i] Aon Hewitt (2011), Trends in Global Employee Engagement, Aon Corporation, Chicao 2 Pink, D.H. (2011). Drive. New York: Penguin Group (USA) Incorporated.
[ii] Dan Pink refers to research by Sam Glucksberg: http://psych.princeton.edu/psychology/research/glucksberg/index.php en MIT Professor Dan Areily: http://web.mit.edu/ariely/www/MIT/
[iii] Sinek, S. (2009). Start with why. New York: Portfolio, Penguin Group (USA) Inc.
[iv] van Dalen, A. (2010). Uit de schaduw van het zorgsysteem. Den Haag: Boom Lemma. de Blok, J. et al. (2010). Buurtzorg: Menselijkheid boven Bureaucratie. Den Haag, Boom Lemma.
[v] Pink, D. H.. (2009). Dan Pink on the Surprising Science of Motivation.Available: http://www.ted.com/talks/lang/eng/dan_pink_on_motivation.html. Last accessed 29 Aug. 2011. 7 Kohlrieser, G. (2011). Re-engagement, Opportunities for Great Leaders. IMD, Lausanne.
[vi] Kofman, F. (2006). Conscious Business, how to build value through values. Boulder, Sounds True 9 Waterreus, dr J.M.. (2006). Doelgericht investeren in het onderwijs: publiek én privaat.. Available: http://www.onderwijsraad.nl/upload/artikelen/doelgericht-investeren-in-het-hoger-onderwijs.pdf. Last accessed 29 Aug. 2011.
[vii] , John Elkington is founder and CEO of Volans and a much sought after keynote spreker. He made this statement in the WWF video film: Business Leaders Call for Transformational Change, WWF, 2011
[viii] Stern, S.. (2011). Who wants to got to work everyday and find it’s like The Apprentice. Observer. 2 July 2011