“But to inspire changes in behavior, a higher ambition must be much more than an aspirational statement. It must be lived by top management as exemplified in their behavior and in the design of their management and human resource policies and practices. Without a set of policies and practices that reflect the human values of love, responsibility, authenticity fairness and trust, a firm has the name but not the game.”
In the recent HBR article, You Can’t Engage Employees by Copying How Other Companies Do It, Michael Beer shares insight into developing trust and engagement in an organisation’s workforce with examples from organisational development at Hewlett Packard and Cambell Soup.
“Employee trust in management and commitment to the company have been in decline for decades. Yet we know that trust and commitment are essential for high individual and corporate performance. Only a minority of companies have managed to buck this decline and have built companies worthy of the human spirit. How do they do it?
Let’s start with what doesn’t work. Incentives or other extrinsic rewards—individual bonus schemes, promises of nice offices and titles, and other tangible benefits—create transactional relationships, not deep bonds to an employer. Indeed there is a good deal of evidence that using such individual incentives actually creates self-interest, lowers trust, results in poor teamwork, and diminishes commitment.
On the other hand, a sense of purpose, real responsibility, meaning, caring, fairness, and authenticity have been shown to increase commitment. To create a company culture that evokes these human emotions in your employees, you can’t simply copy policies and practices from another company – though knowing about them is helpful. They must be consciously designed to your business’ values and cultural objectives.
Nevertheless, there are some key principles that are common to companies that engender the commitment of all those who work for them.
First, it must start with the CEO. He or she must believe in and articulate a “higher ambition,” as we call it at the Center for Higher Ambition Leadership. It must be deeper than only making money for shareholders and managers. Becton Dickinson, a global medical technology company, has made its purpose helping all people live healthier lives. Whole Foods Market’s purpose is to promote healthier eating. Barry-Wehmiller’spurpose is to enable all team members to have meaningful and fulfilling jobs. Lacking a product or service that inspires, Essendant, a distributer of office and industrial supplies, made its selfless purpose to help their partners succeed. A higher ambition purpose must articulate some meaningful contribution to the world so people to feel their collective efforts will make a difference.
But to inspire changes in behavior, a higher ambition must be much more than an aspirational statement. It must be lived by top management as exemplified in their behavior and in the design of their management and human resource policies and practices. Without a set of policies and practices that reflect the human values of love, responsibility, authenticity fairness and trust, a firm has the name but not the game.
Second, companies that engender commitment from employees are dedicated to high individual and organizational performance. They create standards of behavior and performance and hold people accountable for them. They recruit, select, evaluate, promote and terminate people based on their alignment with company purpose and values. Though they value bright and competent people and try to hire the best in a given field, their recruitment and selection process starts with an assessment of the individual’s character, and their alignment with company purpose and values. Managers are trained, developed and evaluated to lead people in accordance with the human values top management espouses. Managers whose leadership is inconsistent with corporate purpose and values are asked to leave, though even this last act is done with caring. These practices have allowed Southwest Airlines to develop high employee commitment, to be admired for their customer service, and to outperform the industry. Southwest’s profits are larger than the profit of all other airline companies combined.
Third, firms driven by values of commitment, teamwork, caring and fairness prevent hierarchy—differentials in perceived power—from undermining performance. Employees are given a voice through a number of means—employee surveys, open employee forums and open door policies. And when circumstances demand layoffs and cost cutting, senior management takes a significant cut in pay.
Finally, high commitment companies work hard to sustain their culture—they realize that protecting it is as much of a challenge as building it in the first place. Several types of practices help to keep a company and its many leaders on the journey. Employee engagement surveys can help assess alignment of leaders’ multiple business or geographic units with company purpose and values. As CEO of Campbell Soup between 2000 and 2010, Doug Conant employed quarterly engagement surveys to assess and develop high commitment in the company’s multiple business and operating units. Hewlett Packard’s senior management employed skip-level meetings to hear the truth from lower levels. Becton Dickinson and others have employed a method that my colleague Russ Eisenstat and I developed—the Strategic Fitness Process—to enable employees to speak the truth to management safely about the alignment of the organization with strategy and values.
It takes years to build a strong purpose- and values-driven high commitment, high performance culture. It cannot be done with a simple training program. Every policy and practice has to be evaluated in the context of espoused purpose and values. Culture is, however, very fragile. A few decisions and behaviors by top management or leaders of key businesses or operating units can undermine decades of culture building.
Consider what happened to HP. In the 1980’s when I first visited HP, it was one of the most admired companies in the world, espousing all the values of a high-commitment company. Long before open office workspaces became the norm, HP had created one that eliminated status differences between people in higher and lower levels. No one had an enclosed office. The CEO had a cubicle in the middle of a hangar with 3,000 other cubicles. Only the most senior managemers had titles and that was because it was legally required. There was no bonus system for senior managers to avoid self-serving and uncooperative behavior, though total compensation was competitive. A profit sharing plan extended to all employees from the janitor to the CEO and the amount was based on the same percentage of salary. All employees owned stock and all were eligible for a stock award based on performance. Senior management cooked and served food at company picnics to reinforce HP’s egalitarian culture.
Lauded by employees, customers, partners and shareholders alike, their high commitment culture was destroyed in only a year by a number of decisions made by Carly Fiorina, a new CEO who was brought in from Lucent by the board of directors in 1999. Not understanding or sharing HP’s values and policies, Fiorina orchestrated a merger with Compaq which had a very different culture. She bought an airplane to fly her around, thus undermining HP’s egalitarian values; laid off 15,000 employees whose love for and commitment to HP had been built over four decades; instituted a pay-for-individual-performance system and denigrated those who did not make their goals, thus undermining teamwork and commitment. Six years later, after HP’s profits and stock had declined significantly, she was asked to resign.
The HP example illustrates how five decades of investment in creating a high commitment and performance organization can be destroyed in only months. You can never take your high commitment culture for granted. But building and sustaining one is worth it. Once you start operating your company on the principles above, you’ll be rewarded with employees who will deliver amazing performance over the long haul.”
At Entrusted Consulting (www.entrustedconsulting.com) we create, measure and benchmark how individuals and teams perform in direct correlation to trust and engagement within the organisation and provide solutions to bring about positive change, both lasting and sustainable. Contact us for more details on how we can assists in developing your organisation’s repair strategy.
