Envisioning and shaping the future of work and business.

Thursday, January 7, 2010

Winning with employee engagement

“Employee engagement, also called work engagement or worker engagement, is a business management concept. An "engaged employee" is one who is fully involved in, and enthusiastic about, his or her work, and thus will act in a way that furthers their organization's interests.” (Wikipedia)
As humans, we all need to feel that we are part of something larger than ourselves, that we are somehow contributing to a common good. When we feel that, we also become more motivated and our contributions will be greater, which in the end will benefit us all as well as ourselves as individuals.

During times of uncertainty and constant pressure to change and adapt to new conditions – which is nowadays more of a normal situation than an exception – our natural instinct as individuals is often to cling on to whatever we have, and to defend our positions against any threat. The strategy that many employ is simply to try to keep things the way they presently are, to maintain the status quo, and to be on their watch for any threats coming in their direction. Some will become completely passive, paralyzed by a fear that if they do anything at all, it will distract them or make them less alert to handle any incoming threat.

A paradox for employees today is that they really need to connect with and collaborate more with more people, and strengthen their personal networks if they are to deliver better results and strengthen our their positions. One problem they are facing when doing this is that most current incentive models do not reward employees helping their colleagues, unless there is a direct and measurable return on their contributions. Another problem is that many organizations fail at making the contributions that employees do outside of their own team visible, and thus if fails to recognize them. These problems put people in a kind of deadlock position. During uncertain times, most people will simply do what becomes visible and recognized by those who evaluate them, their managers. They will most likely also most be asked or commended by their managers to do so, because their managers are in a similar position as they will be judged by their managers on the visible contributions from the team they are managing (and so it goes on, all the way to the top).

When many people revert to this behavior, it can paralyze an entire organization. A business that is bleeding seriously, but that could be helped by the increased productivity, efficiency, and innovation than can come out of increasing employee engagement, would likely bleed to death if employee engagement decreases instead of increasing or at least remaining at previous levels. When individual employees stops to change and adapt at large numbers, the entire organization will crumble under the pressure from its constantly changing environment.

Today’s business landscape is harsh in most industries. Anything a business does that can be documented can also be copied. Chances are it will be copied by someone who can do what you do faster and cheaper than you, possibly also with higher quality. In a global world where imbalances in salaries, taxes, and other business conditions exist, it is more likely to happen than in a world where everyone has equal conditions. We see the effects of this imbalance all the time. Manufacturing companies in Western countries move their production to Asia and China. The Chinese move their production to African countries.

So…products, processes, systems, information, and even knowledge can be copied. This also means that these things are less likely to provide you with comparative advantage, at least for any long. You can do what you can to protect them from falling into the hands of others, but it will be a hopeless struggle that will divert your energy from what you really should do: create comparative advantage with the use of other means.

The things which can provide a comparative advantage to a business today are the things which are not so easily copied. These least “copy-friendly” things are intangible and seemingly “magic” stuff such as tacit knowledge, creativity, corporate culture, values, talent, motivation, synergies, relationships, reputation, brand…all of which are vary much dependant on the human capital that an organization possesses. To make the most of an organizations human capital, employee engagement is needed. Employee engagement must therefore be seen as the foundation of an organizations long-term success.

To be successful in the long term, businesses need to go from the all too common situation where every business unit or project works blindfolded, seeing only its own goals, resulting in suboptimization, waste and unleashed potential, to a situation where individual teams leverage each other for the benefit of the entire business, resulting in synergies, reuse and unlocking of the potential of all employees. Synergies must be created, something which can only be achieved by connecting the individual parts (people) in the right way. It is the relationships between the different parts that will make the difference, not adding more parts and focusing solely on the ability and performance of each individual part. In a business where comparative advantage is created by knowledge worker, the social capital of these knowledge workers will determine their ability to create synergies.

Of course, this is far from being the case in most organizations, especially those that have more than couple of dozen employees divided in two teams or more. The scalability problem start already at relatively small numbers. Anyone who has been part of a rapidly growing small business should be able to testify to this. Suddenly you don’t know everyone anymore. You definitely can’t meet everyone to have a chat at the water cooler to know what is going on and to exchange information and experiences. From this point, the average contribution from employee will decrease with every new recruit – no matter how talented that person is. The reason is the failure to scale inter-employee communication, something which hurts such things as collaboration, knowledge exchange, responsiveness, and innovation.

It just becomes harder to communicate, collaborate and get to know new people the bigger an organization gets. Nothing strange about that. But it also likely decreases employee engagement and thus decreases productivity and efficiency. To this day, I still haven’t experienced a single large organization where I have felt that the average employee is as engaged as the average employee in any of the small businesses that I have encountered.

Increasing employee engagement should be seen as one of the most critical strategies for organizations today, especially for large and distributed organizations which are highly dependant on knowledge work. They need to use all the means available to them to allow their employees to discover, connect, communicate, share and collaborate with each other. They also need to understand that current incentive models might decrease employee engagement, creating an internal competition that undermines their long-term success. Understanding what motivates people in addition to traditional incentives is important when rethinking their incentive models. Just think about the following excerpt from Daniel H Pink’s summary of Harvard professor Teresa Amabile's article in Harvard Business Review "HBR’s “10 Breakthrough Ideas for 2010.":
“The key to motivation . . . doesn't depend on elaborate incentive systems…on days when workers have the sense they’re making headway in their jobs, or when they receive support that helps them overcome obstacles, their emotions are most positive and their drive to succeed is at its peak…As for recognition, the diaries revealed that it does indeed motivate workers and lift their moods.”
It is my belief that the organizations which excel at enabling employee engagement will be winners in the long term. The reason is that employee engagement is absolutely necessary for fostering innovation, boosting productivity, and creating synergies in organizations which are increasingly dependant on knowledge work and the talent and collaborative ability of its workforce. Attracting, recruiting, developing and retaining talent is only one part of the equation. The other part is empowering the workforce by connecting talent and their ideas.

I really see no better alternative for how to engage employees in a large and distributed work force than to make them connect, communicate, collaborate, and share more with each other. This suggests that Enterprise 2.0 definitely has a key role for any organization which up for increasing employee engagement. For example, social software allows employees to be seen and heard wherever and whoever they are, making their contributions visible and recognized by their colleagues as well as their managers, all the way to top management. The usability, reach, immediacy and availability of the new communication and collaboration tools help us deal with the previously bad scalability of communication and organizing people.

For businesses seeing the benefits of increasing employee engagement, Enterprise 2.0 presents quite an opportunity - don’t you think?


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