Engaged Employees Produce Shareholder Value

Organizations that put the effort into fully engaging employees are more likely to reach peak performance and that is a mandatory step in achieving increased shareholder value. This may sound like common sense, yet it is all too rarely implemented.

In my experience, the best companies are those who focus on customers and employees in that particular order. Providing customers with the respect and value they deserve can help maintain a company’s position through fierce competition and often lean economic times. The same could be said for employees. To get the best out of your workers, treat them with respect and provide them with the value they deserve.

Too often when a company decides to go public, shareholders replace employees in spot number two and sometimes customers in the top spot. When this happens, share price may increase in the short term, but is not sustained in the long term. Customers who are no longer the focus will find another company that honors them above stock price. The same could be said for employees who are no longer treated respectfully.

When employees are treated as liabilities instead of assets, they often lose interest in doing what’s best for the organization. And this eventually contributes to a drop in shareholder value. On the other hand, effectively engaging employees to achieve their best performance can directly lead to an increase in shareholder value.

To get the best performance out of employees requires motivating them and capitalizing on their abilities. Motivation means clearly understanding what rewards are of particular interest to each of them. These rewards could be monetary and take the form of a bonus or raise, or more ego-related and mean recognition or a promotion. Regardless, motivation is key in engaging employees to deliver their best performance.

Capitalizing on individual employee’s abilities is equally necessary. This means not only getting the most out of his or her knowledge and skills, but gaining a better understanding of their individual talents and putting these to work. Talents may not pop out on resumes, but they are ultimately the true gifts and strengths employees bring to the workplace.

As I discussed in an earlier post, knowledge and skills are competencies that can be taught. Attitudes and beliefs are what constitute talents and these are very difficult to teach.

Talents are recurring patterns of behavior that can be productively applied, according to Marcus Buckingham and Curt Coffman in their book “First, Break all the Rules: What the World’s Greatest Managers do Differently.” The key to excellent performance then is finding a match between an employee’s talents and his or her role.

These talents may include:

Striving Talents (why of a person) What motivates her to get out of bed in the morning? Are these talents based on achievement, stamina, competition, service, ethics, beliefs, etc? Drive, for example, is a striving talent and very important for someone who needs to initiate rather than respond in the workplace.

Thinking Talents (how of a person) How does he think, how does he weigh alternatives, how does he come to decisions? These talents may be based on focus, discipline, responsibility, performance, and many others. Analytical is a thinking talent and very important for someone who must effectively weigh alternatives.

Relating Talents (who of a person) Who does she trust, who does she build relationships with, who does she confront, and who does she ignore? These talents could be based on empathy, relationship, stimulation, persuasion, etc. Communication is a relating talent and essential for someone who regularly works with other people.

Matching employees’ talents along with their knowledge and skills in the right roles is the best way to capitalize on their abilities. And getting a clear understanding and offering what motivates each of them individually is equally important. These employee engagement activities can then result in them reaching optimal performance.

But engagement needs be more than a human resources initiative—it should embraced as a strategic foundation for the way of doing business. And that is a powerful step towards increasing shareholder value.

Mark Craemer               www.craemerconsulting.com

Presidents’ Day and Great Leadership

Here at a time when we celebrate our nation’s presidents and the leadership they provide our country, it’s good to reflect on leadership itself. Is it possible we expect too much of individual leaders and too little of followers? Do we over value our leaders and under value everyone else?

In the same way the leader of our country has only so much power and influence over getting things accomplished, the same could be said of CEOs, executive directors and other leaders of organizations. Is it really possible for President Obama alone to create new jobs, reform health care and stimulate the economy? He obviously must rely on Congress to accomplish (or keep from accomplishing) these and many other things. Nevertheless, we are likely to credit or blame Obama depending on what gets done.

Unlike big government, leaders of organizations do not depend on politicians with their own constituents as well as special interests and lobbyists. Business leaders instead rely on employees with a different kind of constituent (a.k.a. families) and these employees should be delegated to and depended upon in a leadership partnership.

Recent research by Nitin Nohria and colleagues at the Harvard Business School found that, on average, only 14% of a company’s performance is dependent on its leader. Many factors ultimately determine how well an organization performs, and along with leadership, they include overall strategy, employee talent, market focus, and corporate culture.

Leadership, ideally, should be shared and organizations that recognize this are more likely to excel. Top leaders obviously must take charge and convey to employees how important their individual behaviors are to the success of the organization. A great leader must lay out a clear and consistent strategy, and then empower his or her people to effectively execute that strategy. If a leader has surrounded him or her self with the best talent in the right roles, then fully delegating to these people should be a natural progression for getting things done.

Mainstream media gives far too much attention and makes superstars out of a small subset of executives and leaders in many high-profile companies. Most-admired or highest-paid CEOs do not always make the best leaders nor do they necessarily deliver the best in shareholder value or make for a desirable place to work. The best leaders are often lesser known, share the limelight with others, and put the organization’s interests above their own.

A recent report by the Harvard Business Review on the 50 best-performing CEOs in the world ranked the performance of leaders of large public companies over their entire time in office. This long-term view is unique in these kinds of lists and of particular interest.

What their research found was that many of the most celebrated leaders regularly written about in the business press were not included and many lesser known names were. Though Apple’s Steve Jobs topped the list, other well known CEOs such as Jamie Dimon of JPMorgan Chase, Satoru Iwata of Nintendo, Jeffrey Immelt of General Electric, Sam Palmisano of IBM, and Rex Tillerson of Exxon Mobil did not even crack the top 200 of those in the study.

The study also found there was no corner on the market in terms of an industry or country dominating the list. And, interestingly, only 15 of the top 50 CEOs had an MBA.

Like the greatest U.S. Presidents, the best business leaders are those who map out an effective strategy, then inspire and enable their people to carry it out. Empowering employees with their own leadership responsibilities allows them to fully participate in leading the organization. This shared leadership approach actively engages employees to be part of the solution rather than simply staying on the sidelines.

In the same way President Obama needs to get the best out of Congress to accomplish his goals, other leaders need to find a way to inspire and fully delegate to those employees who can help get things done. Effective change does not come from passive hope with followers standing on the sidelines. Great organizations, like great countries, succeed when leadership is shared and responsibility for getting things done is embraced by everyone.

Mark Craemer       www.craemerconsulting.com

Genuine Praise Makes Good Business Sense

Having worked in for-profit and non-profit organizations provided me with an appreciation for both environments. In the for-profit sector, the pay was typically better and I generally found a greater sense of urgency for getting things done. In the non-profit sector, I felt a sense of altruism for what I was contributing to society and I received a great deal more praise. This last item always made me curious as to why giving praise to employees was not more widespread in the for-profit sector.

It turns out that giving an employee genuine praise often goes a lot further than even monetary rewards, and that makes good business sense.

According to a 2003 Gallup survey outlined in the book, “How Full is Your Bucket?” by Tom Rath and Donald O. Clifton, 61% of American workers received no praise at work. And the biggest reason people leave their jobs is because they feel unappreciated.

Through their research of some four million employees in 10,000 business units and 30 industries worldwide, they found that workers who do receive regular recognition and praise: 1) increase their engagement among colleagues, 2) increase their individual productivity, 3) receive higher loyalty and satisfaction scores from customers, 4) have better safety records and fewer job-related accidents, and 5) are more likely to stay with their organization.

All of us need recognition and reassurance in our work lives just as we do in our personal lives. Praise increases the pride we take in our work and that improves job satisfaction as well as the quality of our products and services. Praise reinforces our relationships with co-workers and supervisors. Praise also keeps us from feeling that we are taken for granted and it builds company loyalty, which is all too rare these days.

So if praise is so vital to productivity, customer satisfaction, workplace safety, employee engagement, and employee retention why aren’t more organizations dishing it out more liberally? There could be many reasons. For instance, some managers, directors and executives simply are not comfortable with giving praise. This could be due to their family or educational backgrounds, or because the corporate culture doesn’t encourage it. Some may believe that a paycheck and standard benefits package is sufficient and if you want a pat on the back, you should get it in your personal life.

Whatever the reason for-profit organizations skimp on this simple strategy, it is time to reverse the impulse to hold back praise and instead let it flow.

Here are some suggestions for delivering praise in your organization:

Praise with purpose. Your purpose in praising someone at work is not to get him or her to like you. The purpose is to increase employee productivity, engagement and retention. Praise should not be confused with a compliment. You compliment someone on their sweater, but you praise them on their skill at finding a solution to a business problem.

Praise with honesty. Employees can easily see through an empty statement that lacks genuine appreciation. This can damage your credibility and possibly make things worse. Instead, genuinely deliver praise on something you see them do that is beneficial to the organization.

Praise with specificity. Target the praise you offer someone and don’t just say “great job.” Instead, say something specific such as, “That presentation you gave this morning was informative and has generated a lot of buzz around here.” Or ask an employee for his or her input on a specific project or problem. Soliciting someone’s advice or opinion is praising their intelligence and it makes them feel valued.

Praise in public and reprimand in private. This can be tricky if the employee is easily embarrassed, but publicly praising an individual employee can often improve morale of all employees. Simple kudos during a meeting or in a company newsletter can be good forms of public recognition. Just as important, leave all reprimands or critical feedback for private meetings.

Praise also does not have to come only from those on the top as praise should emanate in all directions throughout the organization. And it is likely to be contagious. Give it a try in your organization. Catch someone doing something especially well and tell them why you personally think that is so great. You may find in this little act that you end up appreciating your own job a little more.

Mark Craemer                      www.craemerconsulting.com

When Employees Don’t Trust the Boss

In a previous post I addressed how important the attribute of trust is in leadership. Nothing impacts an organization’s overall productivity more than the level of trust found within it. But what happens when employees don’t trust their boss?

If you have strong and irrefutable evidence that your boss is not to be trusted, it seems to me you have four choices: 1) ignore the situation and hope things will improve on their own; 2) tell someone you believe can help make a change for the better; 3) leave your boss and find another job within or outside the company; 4) trust him anyway and help enable a change in behavior.

Ignore the situation. If you choose to avoid the problem of an untrustworthy boss, this only perpetuates the distrust and does nothing to improve your life. In addition, by not confronting him, you are ultimately accepting his untrustworthy behavior. A person cannot be untrustworthy by himself—someone has to be the recipient of this distrust. You have a choice as to whether or not this is you and, if you fail to confront him, you are enabling his untrustworthy behavior. Like any relationship, you have to take responsibility for your part.

Tolerating untrustworthy behavior results in harming yourself by continuing to work for such a person, and also contributes to the dysfunction of the organization as a whole. By not doing something to rectify things, you become as responsible for the dysfunction as your boss.

Tell someone who can help. This is a tricky option because your boss’s untrustworthy behavior is unlikely limited to you alone and, if nothing has been done, it may be condoned or at least tolerated by others. Who you talk to and what you expect him or her to do could end up reflecting poorly on you. If you do speak up, it is best to have your facts straight with plenty of supporting evidence. You should also make it clear what you believe needs to be done about it. And be prepared for nothing to actually happen.

If you have a progressive company where 360 assessments are regularly conducted, then perhaps the feedback of a lack of trust will get back to your boss anonymously and encourage him to rectify his behavior. However, without specific examples to refer to, any comments regarding his untrustworthy behavior may only breed ill-will towards those around him. Regardless, by not confronting your boss directly, you are leaving others to determine your fate.

Leave your boss. You could choose to look for a new position away from your boss either within the company or at another one. By doing so, you may be taking a stand that integrity matters and you will not tolerate working for someone who lacks it. If you choose to communicate to others the distrust you feel in your boss, this could have immediate and/or long-term repercussions. Like it or not, your immediate supervisor can have a huge impact on your future employment. It is therefore important to protect this relationship as much as you can, even if you lack respect for his behavior.

Trust him anyway. Okay this may be the hardest to swallow, but I think it is ultimately the right choice even if after your best efforts you end up needing to move back to the previous option. If you believe your boss is not to be trusted, I suggest you trust him anyway. I don’t mean this out of pure naivety or passive allegiance, but out of hope for a change in behavior. Most human beings (bosses included), respond favorably to being trusted. If you are genuine in your trust and listen respectfully to him, he is likely to reciprocate and trust you back. That’s how trust works and it is also how it spreads.

Trust requires respectful listening and this is filled with opportunities for self-improvement. Listening attentively with an open mind and open heart can make a huge difference in one’s ability to trust others. Trusting him may very well cultivate trustful behavior.

Trust is a two-way street. It cannot be imposed on someone and it requires risk. The only way to find trust is to look for it and expect it in others. This is risky, yet it is the only way trust can build in any relationship.

It’s difficult for most of us to confront any person in our lives. When it’s our boss, this becomes magnified because we believe he may use his power over us to make our work lives worse or perhaps fire us.

The thing to keep in mind is that everyone wants to be trusted and most people will make every effort to become trustworthy. In addition, most of us also want feedback on how we are being perceived. As hard as it is for you to talk to your boss about untrustworthy behavior, if your mistrust is representative of a group of people and not yourself alone, you may be surprised to find just how willing he is to listen and try to improve things.

More importantly, you will have taken a very courageous leadership step that will serve you throughout your personal as well as your professional life.

Mark Craemer            www.craemerconsulting.com