Starving the golden goose

24Jun09

I was a bit unsettled, and maybe a little ticked off, when I read the accounts of Rutger’s professor Richard Beatty’s comments to a conference of CFO’s that argued against the real benefit of employee engagement efforts.  Just what we needed!  Research that gave finance folks ammunition to go after those “soft” programs. To be fair, a careful reading of the professor’s comments showed that he was really saying that HR had not developed any hard metrics to show whether it mattered. I can’t argue that. I am not particularly enamored with the state of the Human Resource function in many organizations these days. All too often they seem to be willing to play the role of personnel administrators rather than being a strategic force determined to build and foster a high performance work force. Where they should be obsessed with growing talent, they have become partners in reducing investments in that talent….starving the golden goose into a slow death.

I have believed in the power of engagement since my first managerial position at United Parcel Service.  Our founder, Jim Casey, constantly reminded us that determined people working together could accomplish anything. Determined = engaged!

Now comes the story of the turnaround at Campbell’s.  Douglas Conant, CEO, set in place serious efforts to increase employee engagement at a company that was failing. Serious?  How about replacing 300 of the 350 leaders in three years?  In his words, “To win in the marketplace, we believe you must first win in the workplace. I am obsessed with keeping employee engagement front and center and keeping up energy around it.”  And the results of the eight year effort are impressive.  From Forbes Magazine, “That massive shift has led to a dramatic turnaround in the firm’s performance. In an industry that is known more for stability than for growth, Campbell has organically increased its earnings (exclusive of acquisitions, divestitures and the like) by up to 4% a year over the last eight years, with earnings per share growing 5% to 10% a year. Those figures put it near the top of its industry. Investors in Campbell have done quite well too. The total return on Campbell stock, assuming reinvested dividends, is more than 30% over that period, during which the Standard & Poor’s 500 index has lost more than 10%.”

So why the reluctance to try to improve engagement? I can’t back it up with research. But over the years I believe I have become a pretty fair observer of the world of work.  Here are some of the things I am seeing that are starving the golden goose.

1. Increased managerial oversight at the top levels.  If every expenditure needs multiple levels of approval you are sending the message that your folks aren’t smart enough or care enough to be fiscally frugal.  So, they just adopt the attitude of “oh well”.
2. Thinking we can scare folks into engagement.  ”You better work hard or your job could be next!”  Fear doesn’t increase engagement, it increases caution. Employees fear making a mistake, so they just do what the bosses want. Side note…you may be building a culture of NON innovation!
3. Running your business on metrics alone.  Dr. Deming once said the most important things are unknown and unknowable.  Sometimes you just have to have faith.
4. Arbitrarily cutting resources across the board. If an employee feels their project is underfunded, their results will prove it!
5. Radically decreasing investment in employee development.  Sorry for being so frank here, but that is just plain stupid. Your best talent will be looking at other organizations that values them as an investment.
6. Shutting down communications.  Employees need the facts, good and bad. This is the time to over communicate.
7. Lack of equity in sacrifices.  Cutting employee travel and still using the corporate jet for execs?  No coffee in the breakroom, but catered lunches for exec staff meetings?  Come on folks, people aren’t blind. If you create a we vs they culture, what makes you think they want you to win?
8. Not enough balance on the executive team.  If most of your executives are MBA’s, and worship finance, you probably have a narrow lens. If you no longer have a dedicated VP role for HR at the executive team, you are sending a pretty strong message about whether you truly believe people are your most important asset.

The good news is that the golden goose won’t die suddenly.  If you make the decision to start feeding it again, now, you might just get the results they did at Campbell. I can think of no project that succeeded beyond expectations that didn’t have engaged members. And those engaged members often succeeded by breaking the rules put in place for increased oversight!

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