The Gallup organization has been monitoring the level of employee engagement across national boundaries and industries for years. The numbers are not pretty. Gallup measures the degree of engagement based on employees’ ratings of key workplace elements such as having an opportunity to do what they do best each day, having someone at work who encourages their development and believing their opinions count at work. Consistently, the engagement metric tends to hover around 30%. To put that in perspective, 70% of employees are consistently not engaged.
If we accept the idea that engaged people are more likely to exhibit high levels of productivity, and creativity; and if we accept that these are likely to contribute to superior profitability and growth, it follows that a management strategy that focuses on improving employee engagement should be high on the agenda.
Before I go any further, I strongly recommend that you invite your team members to participate in Gallup’s 12 Questions instrument. Click on this link to go to their site. Here’s why I have suggested this: what’s interesting about the questionnaire is that it not only gives you a score on the level of engagement but when you combine the ranking from all of your team members for each of the 12 questions it will give you insights into what you need to work on to move the metric north i.e. to engineer a higher level of engagement by making some adjustments to your management style and communication protocols.
Last century could be described as the industrial age. During that time people were subjected to command and control management protocols and for the most part they were just an appendage to the machines that were the principal agents of production and productivity. In that context it’s arguable that the level of employee engagement was not really considered to be that important because employees could be reasonably easy to train, and replace.
In a knowledge economy, on the other hand, employees are the key to the productive output of the organizations they work in. In this context the management styles, and systems that may have worked quite well last century are not going to cut it today. In other words, whereas the most valuable assets of organizations last century were machines (which under GAAP were capitalized), this century the most valuable assets are people (which under GAPP are expensed.)
When thinking of the accounting treatment of these two resources it’s interesting to note that retained machines depreciate (lose value) and call for more maintenance over time, but retained employees appreciate in value and call for less maintenance over time – assuming, of course, you’ve hired well and they’re given an opportunity to acquire and enhance their skills which is both a contributor to, and a logical outcome of them being, engaged.
In his path-breaking book, The 8th Habit: From Effectiveness to Greatness, Stephen Covey refers to a study of 23,000 US residents from a cross section of industries and functional areas. The study found:
- Only 37% said they understood what their organization did and why
- Only 20% was enthusiastic about their team’s and organization’s goals
- Only 20% had a clear line of site between their tasks and the team’s and organization’s goals
- Only 50% were satisfied with the work they did at the end of the week
- Only 15% felt their organization enabled them to execute key goals
- Only 17% felt their organization fosters open communication
- Only 10% felt their organization holds people accountable for results
- Only 20% fully trusted the organization they work for
- Only 13% have high-trust and highly cooperative working relationships with other groups or departments.
Every one of these observations points directly or indirectly to the absence of a clear statement of an organization vision that is shared and understood by team members.
Think about it. Every creation around us was once an idea in someone’s head. This applies to a business as much as to a physical product. If you don’t have a vision for your business it’s inevitable you’ll find yourself caught up in someone else’s. No less important is the fact that if your team members don’t understand where you want your business to go at best all they can do is focus on their functional responsibilities without having a sense of how they contribute to the bigger picture. In the industrial era that worked quite well. It does not work today. All the research points to the inescapable fact that knowledge workers want context and purpose.
I define a vision as “what you want your business to look like when it’s finally done.” We have created a formal process to help you crystallize your vision but I will not go there in this post. I define your mission as being “your governing commercial purpose.” It is the economic reason for your existence and its successful execution is your means for growth. Your mission is something you would logically share with the public but your vision is most likely to be something you would only want or need to share with your team.
The difference between a mission statement and a motherhood statement is essentially that the former is something you live on a day to day basis and is reflected in your strategy and operations. A motherhood statement is a mission statement that’s merely chanted and ignored as a statement of purpose. A statement of purpose lets all your stakeholders (clients, team, owners, and the general public) know what you stand for and what you do to pursue that purpose. It also provides the framework for the development of your competitive strategy.
Here’s an example.
“Our mission is to make <put your firm name here> the accounting practice of choice for our community’s growth orientated businesses by pro-actively and consistently delivering outstanding service value, continuous innovation, and an exceptional service experience so that we fulfill our brand promise of helping our clients experience a better life by having a better business.”
This mission addresses the three key elements of a communicable statement: the WHY, the WHAT, and the HOW. The next, and most important, step is to break this mission down into its critical operational parts and make sure all your team members understand what it means and how their work contributes to its realization.
For example here are some implications of this mission description:
- You need to have a metric(s) that reflect you are developing as the “practice of choice…” – a significant revenue growth rate would do that e.g. 20-30% per year from organic and non-M&A growth would be a good start.
- Your reference to “growth orientated businesses..” Indicates you have client selection criteria. This should drive your marketing and sales activities. If you don’t practice what you preach here you have a motherhood statement on your hands.
- The reference to pro-activity indicates that you must have operational protocols that implement that e.g. monthly contact with clients and performance metrics that are designed to monitor the consequences of pro-active activity
- The reference to “outstanding service value …” again, you need client centric metrics that indicate this is being accomplished e.g. use of the Net Promoter Score as well as anecdotal feedback from clients that is circulated around the firm. This comment also applies to the reference to the outstanding service experience and will manifest itself in an industry-leading referral rate of the type of clients you want.
- The reference to “continuous innovation …” requires that you are constantly looking at, and implementing, new ways to improve service outcomes. One of the best ways to achieve this is to have open communication channels and challenge your team to constantly look for better ways to do things. If you have hired smart people your ability to tap into their collective wisdom is a game changer. To get the ball rolling here you might want to start with taking a look at Pat Lencioni’s work – specifically: The 5 Dysfunctions of a Team, The Truth About Employee Engagement (which was originally titled The 3 Signs of a Miserable Job) and The Advantage: Why Organizational Health Trumps Everything Else in Business. And another great resource is Michael Houlihan and Bonnie Harvey’s book The Entrepreneurial Culture: 23 Ways to Engage and Empower Your People.
- The reference to “helping our clients experience a better life by having a better business…” ties it all together in the sense that you and your team will make a significant and last contribution to the quality of life for your clients and through their agency, the broader community in which they live. If you can help clients improve the profitability and value of their business you are directly contributing to the standard of living at a community and notional level. A team member who gets up in the morning to go to help people have a better life is more likely to have a bounce in her step than one who goes to work to do another tax return. However, unless you continually remind your team members how their work contributes to your mission they will quickly fall back into a functional mindset.
To pull this together:
- The lack of engagement by team members is a huge drain on productivity and profitability. It is also the major reason for a high employee turnover.
- The lack of coherent vision and mission statements that from the basis of your operational strategy with related key performance indicators is a major contributor to disengagement.
- Once you have clarity on what your mission is and your team understand and buy into it you will achieve greater organizational focus and results will flow from that.