August 6, 2020

The most business critical issue of our time?

Once upon a time, passive compliance and the ability to take instruction were the main qualities of the ideal employee. But in a knowledge-based economy it’s ideas and innovation that matter most and they will only be forth coming from people who want to give them.

Global employee surveys regularly show that only around 20% of workers are fully engaged in their work, which means 80% are giving less than could. Gary Hamel, leadership professor and author of The Future of Management says this can help explain why so many organizations are less capable than the people who work there. We’ve never really questioned the fact that business puts money first, but organisations are slowly waking up to the fact that the focus on engagement is not just a passing trend that will be here today and gone tomorrow and that there is a direct correlation between engagement and results. They now need to find a way to balance the demands of human nature against those of the economy, the environment and society.

According to management commentator Simon Caulkin, “Some basic human desires for advancement through our careers and for security have been sacrificed on the altar of economic efficiency.” But there is a price to pay for business too when levels of employee engagement are so low because, ironically, this has a knock-on effect on the very efficiency for which human nature was sacrificed in the first place.”
As Caulkin says, engagement is reciprocal; “Think of it as the return you get for giving people a job they enjoy, control over how they do it, the belief that it is worthwhile, and managers who respect them and care about their well-being.”

Big companies are making a real effort to engage employees and appear to mean it. But do they mean it enough? Do they have what it takes to be a genuinely engaging employer? In short, are they prepared to start asking and stop telling?

There are encouraging signs but it remains questionable whether the current level of effort by the UK’s largest employers will bring about meaningful change.

It’s very clear that companies are eager to attract and keep the most talented people, and also want to minimise costly industrial disputes, through engagement. And as anybody who has worked in the service industries knows, workforce dissatisfaction can be devastating to customer relations. Even more importantly in terms of long-term planning and building a sustainable competitive edge, and as enlightened bosses are already aware, businesses need to start harvesting ideas from the shop floor because, as the nature of work continues to change, they will need people’s creative involvement in order to succeed.

Companies are certainly talking about engagement but how much action is there? According to some observers, not enough. Nita Clarke, Co-author of Engaging for Success, a UK government commissioned report says, “It’s amazing how little attention the investment community pays to the fact that employee engagement has a real impact on medium and long-term company performance.”

John Smythe, author of The CEO: Chief Engagement Officer, suggests engagement has become more important because the old paternalistic relationship between staff and company has disintegrated. “The old contract has broken down. I’m looking for two things in my work – to participate creatively and to build my skills so that I have security.”

For those of us who believe the key to sustainable success in any industry today is engagement, and who see it as an everyone-wins strategy, the research is at least encouraging. In UK it shows that more companies are making the effort to engage their workforce, with nearly 70% conducting regular surveys, with some of the top scorers (Lloyds Banking Group, British Airways, BT, J Sainsbury) conducting quarterly surveys. The most popular way of communicating with employees was through the company intranet or a newsletter, a method used by 70% of companies. Only 13% send their senior executives back to the shop floor and only 4% conduct exit interviews when employees leave.

Overall, the research seems to confirm what we can already feel on the ground – that there is a collective shift away from command and control and towards communicate and collaborate. Companies are shooting to win the hearts and minds of employees, as engagement rapidly emerges as the imperative in organisational development and possibly the most business critical issue of our time.

Vivienne Ladommatou
Co-founder of Hall & Grace