Despite huge expenditures for motivational speakers, employee engagement and executive coaching on leadership, U.S. levels of customer and employee engagement remain stuck at historic low levels. This begs the question: What type of ROI do organizations achieve in their executive coaching and motivational speeches if nothing fundamentally changes in the way they conduct business? The coaching field, investors and consumers, not to mention ISO (The International Organization for Standardization) are prompting organizations to take a more strategic approach to engagement that in turn is giving rise to a new paradigm for leadership, coaching and motivational speaking.
By Bruce Bolger
I recently talked to a well-known speaker on the employee engagement circuit who presents dozens of plenaries a year and who shared with me an impressive fourth-quarter calendar demonstrating just how well this speaker’s practice on employee engagement has flourished.
You would think this keynoter, who for obvious reasons I cannot name, would be charged up about the cause of employee engagement and optimistic about the future. In fact, the opposite is true. In this conversation I was told: “I can’t tell you how many times I have HR managers coming up to me after the presentation saying how inspired they were and promising to follow up about their organization’s employee engagement needs, and how rarely I hear back from most of them. I get top ratings, yet in most cases nothing happens. I’m convinced that the problem is in the C-suite: CEOs simply don’t understand the economics of engagement, why they should focus on it, and I am sure most wouldn’t even know what to do if they did because they’ve never had any formal training on the subject. So the excitement generated in my presentations usually goes nowhere.”
In other words, this highly-rated speaker has determined that the roadblock isn’t the human resources professionals who come to learn about employee engagement, it’s the CEOs.
I had a special insight into this generation of CEOs in the 1990s, when I was invited to speak at a Young Presidents’ Organization meeting on the field we then called People Performance Management.* This group is comprised of presidents at larger companies who are under 49, and many in the audience at this event were in their 30s, meaning they represent the generation of senior leaders in business today. I shared the 90-minute session with a colleague who was an executive at the American Productivity & Quality Center at the time. The audience being from my Baby Boomer generation, I was optimistic about the appeal of our message, but mindful of their titles, I dug out every piece of research I could find at the time to support the financial benefits of a strategically focused approach to people. By that time, Harvard professors Leonard Schlesinger, James Heskett, et al had published the original version of the Service Value Profit Chain (click here for more recent version), based on a study of Sears stores, which made an early connection between engaging customers, employees and all parts of the value chain in a strategic way. Despite my enthusiasm and best efforts, the polite applause did not suggest success.
Before our session, my fellow speaker, who had just arrived breathlessly after an all-night flight, confessed that he hadn’t had time to prepare, but for a few scribbled notes during breakfast. I was irritated because I thought this was our big opportunity to present this new field and that he should have invested more time. For 40 minutes he mesmerized the audience with off-the-cuff tales about the leadership qualities of Alexander the Great, Caesar, Napoleon and other notable historic figures and made a vague reference to only one study: research on twins who had been separated at birth but were later identified as siblings. In this classic study, a researcher recruited them for tests to determine to what extent nature versus nurture affected their development. I do not recall the findings, but at the conclusion, the speaker received nearly a standing ovation. As folks walked out of the meeting room, my colleague and I stood at the door to hand out cards: almost all heartily complimented my colleague: several asked for copies of that study on twins, and only one for a copy of the Harvard professors’ Sears study.
Afterwards, one of the attendees sat down beside me as I sulked in the lobby. He put his hand on my arm, looked me straight in the eye, and said: “Don’t be discouraged; it wasn’t you, it was your message. This isn’t the right audience for this. They want to hear about themselves, not how they can transform their organizations through people. These are the principles upon which we founded our business. You’re on the right path. Stick with it.” The man introduced himself as Gordon Segal, whom I discovered shortly after is the co-founder of the home furnishings retailer Crate & Barrel, a company well known for its avant-garde approach to people management.
All signs point to a generational change in CEO priorities, but it takes time. That meeting was about 20 years ago. Despite the recent popularity of the television show “Undercover Boss,” and the growing pressure from investors and ISO Annex SL requirements, few people would say their CEOs mirror those leadership stories. That said, it is now safe to predict that the next generation of CEOs and other leaders will bring with them a greater focus on people, and it’s not just because of the influence of Millennials. Some of it will come from management coaching firms that are leading the way, such as Korn Ferry, whose mantra is: Engage or Die. See ESM: Engage or Die. More will come from shareholders: at least $15.7 trillion dollars is now managed based on ESG (Environmental, Social and Governance) principles that include a focus on people. Alibaba, a Chinese rough-equivalent of Amazon.com, has just released a formal report for ESG investors that includes a first step in disclosing its human capital practices. The Social & Human Capital Coalition of 200 leading multi-nationals will shortly release a protocol of voluntary human capital disclosures that in the early draft includes a systematic approach to the engagement of all stakeholders. That which gets disclosed almost always finds a higher ranking in C-suite priorities.
Despite the overwhelming economics and common sense of Enterprise Engagement principles, sometimes it takes a spiritual awakening for a CEO to have the epiphany. Ironically, the multi-billionaire investor Paul Tudor Jones, founder of the JUST Company Exchange Traded Fund—See ESM: Goldman Sachs Launches ETF Based on Just Companies—says he got his inspiration for his new ESG fund launched earlier this year by Goldman Sachs from spiritual advisor Deepak Chopra.
Sometimes it takes a sobering personal incident. As recently reported in the New York Times, Aetna CEO Mark Bertolini admits that it was a difficult recovery from a serious injury that led to his discovery of the importance of his people. The connection of his own physical recovery to his employees, he says, came when “The yoga teacher who was working with our employees came to me and said, ‘I’m hearing things about the way people feel in your organization, and you should feel bad about it. You should do something about it.’ So I said to our HR people, ‘I want to know who the people on the front lines are. I want to know how they live.’ We got enough information, and people were using Medicaid and food stamps and all these other sorts of things, and they’re incredibly stressed. But here we are, this successful company.” Aetna subsequently raised its minimum wage to $16 an hour and improved benefits, among other steps. “Our messaging with our shareholders has changed,” says Bertolini. “We stopped giving quarterly guidance. We reduced our guidance metrics. We said, ‘We’re going to invest for the future.’ We had some investors leave because they wanted more dividends or more share buybacks. We cut our share buyback in half. We didn’t increase our dividend until we had a lot of extra cash on hand. You get the shareholders you deserve.” Note, Bertolini engineered the sale of the company to CVS and could not guarantee that company would continue his vision.
That it took an accident for an intelligent, highly educated, experienced and well-meaning executive at a Fortune 500 organization to prompt this change of heart is not a reflection on him, but rather on today’s antiquated leadership paradigm that puts profits over people, even when it’s now clear that people are the best path to profits. The more we depend on machines to automate work, the more we need people with heart to bring a brand’s promise to life at the critical points of sales and service and maximize human connections and engagement. Whether in the neighborhood dry cleaning shop or in the world’s largest businesses, institutions and governments, as clearly stated by Korn Ferry’s executive coach Kevin Cashman, success goes to those who can engage all stakeholders in the mission, vision and values of an organization.
Speakers and coaches can play a critical role in the Enterprise Engagement framework. They can help communicate the vision through meaningful stories and facts and reinforce values; they can bring fresh ideas and different perspectives that can bring an organization’s values to life. Yet, as with all other engagement tactics, they provide the best results when their roles are aligned with a strategic and tactical plan orienting everyone toward common values, goals and expectations.
This meeting at the Young Presidents Organization was arranged by Richard Ross, who sold his family’s travel agency and incentive travel firm in 1996 and created the first-known company focused specifically on what was then called People Performance Management and which later became Enterprise Engagement. Ross was so passionate about creating this new field he started from scratch so that he could provide a completely neutral solution to clients based on their needs, along with a practical implementation framework, rather than being perceived as a provider of one specific type of solution. Ross died on Sept. 11, 2001 on American Airlines flight 11, on his way from Boston to California to launch an engagement initiative with a leading consumer products company.
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Online: The Enterprise Engagement Academy at EEA.tmlu.org, providing the only formal training on Enterprise Engagement and the new ISO 9001 and ISO 10018 quality people management standards. Provides preparation for professionals to support organizations seeking ISO 10018 employer or solution provider certification, as well as elective courses on Trade Show Engagement, Rewards and Recognition, Government, and other topics.
Services: The International Center for Enterprise Engagement at TheICEE.org, offering: ISO 10018 certification for employers, solution providers, and Enterprise Engagement technology platforms; Human Resources and Human Capital audits for organizations seeking to benchmark their practices and related Advisory services for the hospitality field.
The Engagement Agency at EngagementAgency.net, offering: complete support services for employers, solution providers, and technology firms seeking to profit from formal engagement practices for themselves or their clients, including Brand and Capability audits for solution providers to make sure their products and services are up to date.
Enterprise Engagement Benchmark Tools: The Enterprise Engagement Alliance offers three tools to help organizations profit from Engagement. Click here to access the tools.
• ROI of Engagement Calculator. Use this tool to determine the potential return-on-investment of an engagement strategy.
• EE Benchmark Indicator. Confidentially benchmark your organization’s Enterprise Engagement practices against organizations and best practices.
• Compare Your Company’s Level of Engagement. Quickly compare your organization’s level of engagement to those of others based on the same criteria as the EEA’s Engaged Company Stock Index.
• Gauge Your Personal Level of Engagement. This survey, donated by Horsepower, enables individuals to gauge their own personal levels of engagement.
For more information, contact Bruce Bolger at Bolger@TheEEA.org, 914-591-7600, ext. 230.