15 December 2008
Spending on employee engagement set to rise in 2009
But only a third of workers believe their organization engages them to perform well.
A recent YouGov report from stakeholder engagement consultancy Engage Group says most boards see employee engagement as a key priority, with investment set to grow despite the current economy.
This report anticipates the early 2009 MacLeod Review, the UK government’s inquiry into employee engagement’s role in helping British industry improve performance and weather the economic challenges.
The YouGov survey of nearly 23,600 directors and employees, conducted in October, reveals a strong belief in the power of engagement. Engage Group’s deputy chairman, John Smythe (pictured, right), says directors report an association between high levels of engagement and business performance. They see a fully engaged workforce as critical to success.
But this belief is not yet translated into action. Despite the growing support for engagement, most employees feel disengaged – with only a third believing their organization engages them to perform well.
New inclusiveness
“This report confirms an earlier thesis – the outcome of an extensive research program I carried out in partnership with McKinsey & Company in 2004 – that the drivers of employee engagement are shifting towards a new inclusiveness,” Smythe says.
The report says, “Nine out of 10 board members say they plan to maintain or increase spending on employee engagement in the coming year and 3 times as many (34%) intend to increase investment in engagement, as intend to decrease it (11%).”
Using employee engagement “programs” – as opposed to an engagement “culture” – is widely regarded as an ineffective approach. The Hub spoke to consultants on both sides of "the Pond", to hear their views on investing in engagement.
Culture not program
In Canada, Ken Milloy (pictured, left), president and senior consultant, Strategic Connections says, “I see too much emphasis on engagement as a program, not a company culture. It’s really about leadership and the business as a whole.”
In the UK, Darren Briggs (pictured, below right), Flametree Communication and new appointee to the Hub’s editorial board agrees, “Engagement ‘programs’ implies there’s a beginning, middle and an end. If people think that way they’re almost certain to fail.” He goes further. “I wonder if ‘engagement’ may have had its day. Is the philosophy of an engagement ‘program’ viable?”
Internal communication shouldn’t try to own engagement
Milloy recently chaired Melcrum's Comms Canada conference and found many people involved in engagement also see it as a program rather than a way of doing business. However, he believes executives are starting to understand engagement as more than a series of initiatives.
“We should scrap engagement managers because if we have a person or department it’s seen as their job only and that’s wrong. It’s everybody’s job.” Milloy has come to believe that culture change is achieved more effectively by not using the term “engagement” and not treating it as an HR initiative. Instead, managers should model the behaviors associated with engagement. “Do it, don’t brand it.”
Briggs recognizes the many factors are involved in culture change. “It’s naïve for communicators to assume they’re the driving force behind engagement,” he says. “If they claim engagement is their agenda they’ll be in for a fall. They’ll be caught between the powerhouses of HR and marketing.” Marketing will claim “brand engagement” and HR will say they champion “employee engagement”.
He suggests communicators talk with marketing and HR to create a common agenda. “If you don’t have the language of HR or marketing, find out quickly how they talk about culture change and engagement. Then you’ll be in a position to add value to their agenda,” Briggs advises.
Executives are starting to understand engagement as more than a series of initiatives.
Impact of CEO behavior
The report says, “Fewer than 4 in 10 employees believe their senior leader – usually the CEO – is effective; and forceful and controlling leadership styles both have a negative impact on engagement. On the contrary, employees believe the most effective leaders are those able to inspire confidence and commitment, empower those around them and build effective teams.”
“The old model of the charismatic, controlling CEO who leads from the front and barely looks back is not only dated, but has a hugely negative impact on employee engagement. The old world of command and control is dead or dying. In the new world engagement is no longer a child, but an active adolescent,” Smythe says.
Ripple effect
“An engagement culture is driven by the CEO’s behavior and philosophy. It’s down to their style and personality,” Briggs says. “The CEO has such a profound influence because people follow people and behavior follows behavior.”
Milloy says leaders must understand why they want the business to be different and what they expect. “Once they understand that, they can say what people have to do differently.” He says an important conversation is lacking among senior leaders – “What does this mean for us as a team in terms of our behavior? Is it engaging? What should we stop doing that isn’t engaging?”
“The longer the chief executive is around the more their behavior begins to spread,” says Briggs. This creates a ripple effect, starting with the senior team. He believes engagement is fundamentally about the relationships people have with their boss. “Line managers that understand how to talk with people have the most profound impact.”
Putting People First
Briggs describes British Airways' (BA) 1980s experience with “Putting People First” (PPF) – a culture change to shift the company mindset from being operationally driven to being customer focused. Once employees went through the program empowering them to behave differently, many became disengaged where they had a “blocking” manager.
BA realized managers needed to experience the same process and introduced “Managing People First”. This week-long event introduced managers to the new philosophy and saw engagement levels rise. “The key is engaging managers first. If not, you haven’t got a prayer,” Briggs says.
"New world" drivers
The YouGov report also says, “One in 2 line managers still make decisions behind closed doors. Worse still, two-thirds of those managers then just tell their employees what to do or simply expect them to ‘catch on’ to what has been decided. Only 1 in 3 make an effort to explain their decisions to their people.”
Smythe says old world drivers of loyalty and organizational pride still have a place. But he believes the "new world" drivers of involvement in decision-making and change processes are key to creating engagement that results in high performance.
Courage to share power
Is Smythe surprised at the research findings? “There’s a greater case for what we developed in 2004,” he says. “How the next 18 months will play out in terms of the global economy will be interesting – and how people will be responding this time next year. Will there be a reversion to old world drivers and command and control, or will people be forced to find new ways to return to growth?
In the new world engagement is no longer a child, but an active adolescent.
“The most successful organizations are as radical about their engagement strategies as they are about their business models. Leaders at every level need to have the courage to share power with their people – to retain the best talent and drive real value, leaders must give employees a voice in shaping their own futures.”
Have your say
Are you still running engagement “programs” – or is engagement in your organization recognized as a culture change that will deliver “the way we do things around here”? Smythe says that in the "new world" engagement is no longer a child, but an active adolescent – do you agree? Share your thoughts with us, below.
Recommended resources:
How CUCBC transforms managers into communicators
Melcrum report: 21st Century Leadership Communication
A cycle of engagement between employees and customers
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