This Is How World-Class Executives Facilitate Employee Engagement
Workplaces with meaning.
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The workplace has become profoundly destructive to the human spirit. What are top executives doing to reverse the trend and keep their employees engaged?
Management Advice > This Is How World-Class Executives Facilitate Employee Engagement
Why do so many corporate professionals want to escape their jobs? That was the question at the heart of a study by EscapeTheCity.org, a UK organisation that helps “talented professionals escape unfulfilling jobs and transition into the new world of work.”
With over 250,000 tribe members and counting, it seems they’ve struck a chord. And if you’ve been paying attention, I doubt that comes as a surprise.
It’s a story that sounds familiar to Dalene and Pete Heck, a former procurement specialist and accountant who now run a tourism consulting business whilst on a never-ending round-the-world trip chronicled on their blog.
“After a very difficult time that involved a lot of personal tragedies, we were compelled to reevaluate how we were living our lives,” wrote Dalene, typing poolside from Hawaii.
“Sure, the six-figure salaries and perception of a secure future were nice, but we wondered what else was out there. And so we hung up our soulless corporate careers we had lost all ambition for, and struck out on our own.”
Say Hello To The 21st Century Careerist.
Escape the City’s website is full of what they call 21st Century Careerists:
Ben, who escaped KPMG to become CFO of a solar energy charity
Jamie, who said goodbye to his life as a stockbroker to start a wine business.
Emma, who left a ho-hum PR job to join Airbnb;
A quick look at the website, and it’d be easy to dismiss this as a millennial talent problem: after all, everyone featured looks young and full of promise.
But if you dig a little deeper and ask around, you might see what I do: talented, highly-educated and driven people are voting with their resumes, willing to leave behind money, security and prestige for freedom, fulfilment and values-driven work.
And it’s a huge loss to their former employers.
As someone whose business depends on the intellectual output and engagement of my team, it’s a trend I want to stay ahead of.
If I were the executive of a massive company, figuring out how to keep my best performers would be near the top of my 2018 agenda.
So Why Do So Many Corporate Professionals Want To Escape?
According to Mark Crowley, a leadership writer and consultant who regularly looks at problems of employee engagement, “the American workplace has become profoundly destructive to the human spirit.”
And the picture in Australia isn’t much better, with less than one-quarter of Australian workers engaged in their jobs, and a disheartening 16% who are actively disengaged.
Looping back to Escape the City’s recent Diagnosing Job Dissatisfaction report, the findings shouldn’t come as a surprise: when asked what people want – but aren’t getting – in their current jobs, here’s what topped the list:
clear sense of purpose
individualism and entrepreneurialism
positive social impact
greater sense of freedom and autonomy
healthy mind and body, and
What might come as a concerning surprise are numbers like this:
more than half of professionals surveyed say they experience mental or physical health issues as a result of their jobs
64% want their work to have more social impact, and
34% feel like they don’t have a role model in their current work
Amber Hoffman Knows What This Is Like.
In 2012, Amber heard through the grapevine she was 30 days away from making Partner at one of the world’s largest law firms, but instead of feeling elation at finally reaching a career pinnacle, she decided she’d had enough.
After developing work-related tendonitis from long hours and endless computer work and a growing sense of unease she wasn’t living the way she wanted to be, Amber and her husband Eric took off to Asia.
Employee Engagement Is Now A Success-Critical Business Priority.
While entrepreneurs and adventurers like the Hecks and Hoffmans have probably had an easier time of their corporate escape because of work-from-anywhere technology and lowered cost-of-entry for entrepreneurs, the thing I find most interesting about this story of shifting career aspirations aren’t the former-employees-turned-entrepreneurs, but the still-employees.
For me, the biggest lessons for executives, managers and business owners are not in the people who don’t want to escape corporate life altogether, but those focused on escaping the corporations that just don’t get it.
Because at the end of the day, companies that do engagement right – Airbnb, Google, Zappos, and Buffer, among others – are cleaning up in both the talent and the revenue department.
Consider some of the evidence:
The Parnassus Workplace Fund, a mutual fund that invests exclusively in firms with outstanding employee happiness and engagement, has outperformed the S&P by more than 4% every year since inception, and by almost 7% during the height of the GFC;
Disengaged workers cost the Australian economy an estimated $54.8bn per year;
Companies like SAS, which consistently top Best Places to Work lists for a workplace culture that places the employee as paramount, produce record profits for its owners and receive an average of 100 applicants per positions;
Companies with strong corporate culture require fewer costly, business-hindering processes, as noted in this f-bomb laden note from Brian Chesky, CEO of Airbnb, to employees, and seen in the Zappos example below.
In short: employee engagement and happiness is no longer a fluffy concept for consultants and HR to puzzle over. It’s a commercially-relevant problem that directly impacts revenue.
So What Are The World’s Most Successful CEOs Doing About It?
Not content to simply leave it at “employee engagement matters,” my curiosity pushed me to wonder: which companies are best at employee engagement, and how do they do it?
Combining some well-known stories you’ve no doubt heard of – think Tony Hsieh at Zappos – with unsung heroes and one cautionary tale, I’ve pulled together a list of how the world’s top executives are shaping workplace culture and outperforming financial expectations.
1. The CEO: Joel Gascoigne, Buffer
The Principle: Radical Transparency
In 2014, Buffer, a social media scheduling app used by social media managers, marketers and bloggers, committed to fearlessly living its values, no matter how crazy it sounded.
While values like choose positivity and listen first, then listen more are relatively straightforward, what Buffer did to live its second value – default to radical transparency – is where things get interesting.
For one, there are no private emails at Buffer: every email sent between any 2 people in the company is available for any employee to read, due to a mass cc list (which, when I think about it, probably helps employees to choose positivity).
For CEO Joel Gascoigne, however, that wasn’t enough, which is why the company introduced open salaries.
For employees who desire purposeful, values-driven work, it’s easy to see how companies that live their values – especially when it’s difficult to do so – would be a no brainer.
2. The CTO: Patty McCord, Netflix
The Principle: Radical Common Sense
While Netflix has been loudly transforming the way we consume media, the company’s former Chief Talent Officer, Patty McCord, has been quietly transforming HR and employee engagement.
Her HBR article, How Netflix Reinvented HR, is a best-in-business read regarded by many as a foundational starting point for how companies should be treating their employees.
And at the heart of the philosophy is a common-sense approach that isn’t very common, with 5 guiding principles: hire, reward, and tolerate only fully formed adults; tell the truth about performance; managers own the job of creating great teams; leaders own the job of creating the company culture; and good talent managers think like businesspeople and innovators first, and like HR managers last.
What does this common sense approach mean in practice?
According to McCord, if you hire the right people, 97% of them will do the right thing, meaning policies should be simple, and shouldn’t get in the way of performance.
Netflix’s fiscal policy, for example: act in Netflix’s best interests. The vacation policy for salaried employees: use your judgement.
And common HR practices, such as Performance Improvement Plans that are often messy, stressful, and fail to change the outcome: Just don’t. If someone’s skills no longer fit, be honest and generous about letting them go.
3. The CEO: Mark Zuckerberg
The Principle: Radical Impact
Feeling like you’re making a difference at work is a massive driver of engagement, which might explain Facebook’s top position on this best place to work in America in 2015 list.
With recruitment messaging such as, “you’re in charge of making a difference,” it’s hard not to see the appeal.
What makes Facebook stand out, however, is in the follow-through: Facebook employees are encouraged to question and criticise their managers, Mark Zuckerberg holds regular Friday ‘Ask me Anything’ sessions, and 81% of Facebookers believe their work makes the world a better place.
4. The CEO: Veronica Rose, Aurora Electric
The Principle: Radical Humanity
It makes sense that companies that think of their staff as people first, and workers second, tend to have happy employees.
But the example of Veronica Rose, Founder and President of a 4-employee data, communications and electrical installation business, shows you don’t have to be a massive company to put this principle into practice.
While Aurora only has 4 full-time employees, they regularly hire up to 50 temporary specialists to complete client contracts.
And knowing she requires highly-skilled contractors with security clearance, Rose has made a point of treating both permanent and temporary employees as complex people with a range of needs.
That means offering financial planning classes to prepare for retirement and other expenses; paid legal fees for financial and family issues; tuition reimbursement for degree programs and certifications, even those that aren’t related to their job; and comprehensive healthcare, which includes unheard of benefits such as drug and alcohol rehab.
“I need the cream of the crop, and they are hard to find. So I create an environment in which everyone wants to come and work for me.”
5. The CEO: Tony Hseih, Zappos
The Principle: Radical Empowerment
While there has been heaps written about Tony Hseih’s legendary approach to company culture, including a book from the man himself, most people agree part of Zappos’ success is the extent to which it empowers its employees, eschewing contact centre scripts in favour of creativity and independent thinking to deliver Zappos’ much lauded Wow factor.
And “Wow” they do.
One of Tony Hseih’s most famous quotes – “Zappos is a customer service company that just happens to sell shoes” – seems to come through in employees’ BAU work: delivering flowers to a customer after her mom passed away, or spending over 10 hours on a call with one customer…just because.
The payoff? Zappos’ business is 75% repeat customers.
6. The CXO: Laszlo Bock, Ex-Google
The Principle: Radical Data
According to many CEOs, hiring the best people is what matters most, because without them, even the best culture won’t retain them, or drive performance.
Google’s ex-SVP of People Operations, Laszlo Bock, is on a mission to replace intuition and gut sense with data and rigorous analysis.
“It’s toxic,” says Bock. “If people see poor performers all around them, they decide they don’t need to work that hard. Your very best people will leave.”
With a background in HR and management consulting, Bock has transformed Google’s hiring practices with data: under his tenure, the hiring cycle has been cut from an average of 180 days to 47, using an analyst-created tool to predict a candidate’s probability of success at Google after 4 interviews, to 86 percent confidence.
7. The CEO: Judith Faulkner, Epic Systems
The Principle: Radical Perks
I want to finish with a cautionary tale, so let’s get this straight: perks are not the same as culture, and perks don’t create engagement on their own.
Consider the example of the healthcare software company Epic Systems, sometimes applauded as the healthiest company.
On the surface, things look great: healthy, made-on-site food; paid sabbaticals every five years; group travel ‘Epic Odyssey’ trips; company-wide volunteering … with perks like this, it’s hard to imagine Epic’s top employees escaping the company because of mental or physical health support.
And yet, after only a few minutes on Google, I found enough unflattering accounts from former employees complaining of iron fist management, overwork and burnout, and a lack of respect by managers.
It’s hard to know how much of this is systemic, and how much they are the opinions of a disgruntled few, but it is worth remembering: employees love working for companies not because of the free dry cleaning and ping-pong tournaments, but the values-driven leaders, management integrity, and respect for employees.