Don’t Let Low Employee Engagement Drag Down Your Bottom Line

Here is an excerpt from an article written by Mike Prokopeak  for Talent Management magazine. To check out all the resources and sign up for a free subscription to the TM and/or Chief Learning Officer magazines published by MedfiaTec, please click here.

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Improved communication and creative career development opportunities can turn the rising tide of employee discontent and boost results.

The 2008 recession hit many organizations like a giant wave, swamping them in a rising tide of red ink that led to deep budget cuts and legions of job losses. On the positive side, it also buoyed employee engagement as remaining workers battened down the hatches and focused on rebuilding and boosting productivity.

But as the recession’s wave slowly recedes, it threatens to drag that higher engagement with it. Employee engagement has dropped significantly and remains mired at dangerously low levels, according to an analysis conducted by Aon Hewitt, a human resources consulting firm. Organizations’ financial results could drown in the process.

The Ebb of Employee Engagement

At the height of the recession in 2009, engagement increased to relatively high levels, said Dan Rubin, Aon Hewitt’s employee engagement practice leader. Many employees were simply grateful to have a job as they watched friends and colleagues lose theirs, and their employers did a relatively good job of communicating about the challenges they all faced. It’s been a different story since.

At the end of 2011, the firm analyzed its employee engagement database of 5,700 employers, representing a total of 5 million employees. Employees were asked if they would recommend their employer to a friend, whether or not they intend to stay and how motivated they are to give extra effort. Organizations whose employees score above the 65 percent range — meaning they respond more positively — tend to deliver 22 percent higher shareholder return than their underperforming counterparts.

According to Aon Hewitt’s analysis, engagement levels were parked around 56 percent in 2011, approximately the same as 2010 and lower than 2009 (60 percent) and 2008 (57 percent).

“As the recession drags on, employees are becoming increasingly challenged by how to continue to get by with fewer people doing the same work and they’re really looking for the light at the end of the tunnel,” Rubin said.

With aggregated engagement scores floundering well below the 65 percent tipping point, it’s apparent that many organizations are treading water and could see shareholder return wash out to sea along with employees’ overall positivity.

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To read the complete article, please click here.

You may also wish to check out two related articles:

Defining Engagement

The Why (and How) of Employee Engagement

Mike Prokopeak is editorial director at Talent Management magazine. He can be reached at mikep@talentmgt.com.

How does public school education in the U.S. rank internationally?

According to its website, Online College Guide, the right online college education can help many people to enhance their career, advance their profession, or explore something new. “Check out our online degree guides for inspiration or explore the jobs of tomorrow. Stay on the cutting edge of online learning with the help of our expert blogger and use onlinecollege.org as your place to discover facts about online college accreditation.” To do so, please click here.

According to a study  of 65 countries recently conducted by the Programme for International Student Aassessment (PISA), discussed in an article featured by onlinecollege.org, here is how the United States compares/contrasts with 64 other countries, and among six specifically:

Mathematics

China  (#1)
Switzerland (#8)
Canada (#10)
France (#22)
England (#27)
United States (#30)

Reading

China (#1)
Canada (#6)
Switzerland (#13)
United States (#14)
France (#17)
England(#19)

Science

China (#1)
Canada (#8)
Switzerland (#13)
England (#14)
United States (#20)
France (#23)

With all due respect to the importance of innovation, the United States must out-educate its competition in the global marketplace before it will be able to out-innovate them.

In my opinion, the current state of public school education in the United States is both a national disgrace and an economic disaster.

To check out the entire article, please click here.

For those who share my concern, please click here to check out a final examination that all 8th graders took in Salina, Kansas, in 1895. Most of those students attended a one-room schoolhouse. Hmmm…..

How to Learn from Your Competitors

Here is an excerpt from an article prepared by the staff of Inc. and featured by the magazine’s superb online series, Productivity@Work. To read the complete article, please click here.

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Some of the best business advice you’ll ever get your hands on might be found at an unlikely source: your toughest competitors. Identifying your competition’s best practices and adopting the ones that make sense for you can be an effective tactic. But be forewarned, they won’t give it up willingly. Making it happen requires some amateur detective work, but you don’t have to be Sherlock Holmes in order to succeed. Here are some tips to help you get started.

Leveraging the Internet is easy to do these days. “Google Alerts is an outstanding tool for ‘spying’ on your competitors,” suggests Patrick Schwerdtfeger, author of Marketing Shortcuts for the Self-Employed. For example, by entering a keyword phrase, such as, “insurance marketing Facebook success story,” the owner of an insurance agency or brokerage can receive regular emails with examples of how competitors are leveraging social media to promote their businesses. “Small business owners can create dozens of such alerts to keep themselves abreast of strategies that are producing results elsewhere in their respective industries,” he says.

Formulating and executing a well-defined strategy can help you organize your efforts. Conducting analysis of your competitors is a must, say Ross Kimbarovsky and Mike Samson, co-founders of crowdSPRING, an online matchmaking service for designers and providers of other creative services. They recommend a three-step approach. Start by identifying the competitors you want to monitor and defining the metrics you want to track. Are you interested in comparing revenues? Unique visitors to a website? Traffic rank? Then begin gathering the data—Google Analytics makes that easy to do—paying special attention to recent trends. Finally, analyze the data you have collected with an eye towards challenging your assumptions.

Consumer rating and review sites are great places to learn more about the strengths and weaknesses of your competitors. These sites are basically local directories that allow users to post comments about their experiences with businesses they’ve patronized. Among the largest are Yelp!, Insider Pages, Google Maps, Bing Local, City Search, Yahoo Local, Local.com, and Merchant Circle. Cranks and competing businesses sometimes try to game the system by skewing reviews for or against a particular business, but with a little practice you’ll be able to discern useful patterns in what others are saying about a competitor’s operation. It’s a good idea to create accounts for your own business on these sites, so you can see what others are saying about you.

As important as the online sphere has become, a great deal of business is still conducted in the “real” world, as opposed to the virtual one. If you have a business with a physical presence, your competitors probably do, too. The late Sam Walton, founder of Wal-Mart Stores, the world’s largest retailer, was famous for regularly visiting his competitors’ stores. Renowned as a believer in lifelong learning, he was convinced he had the most to learn from those he competed against. Visit your competitors’ outlets regularly. Pick up their marketing materials, subscribe to their newsletters, and attend their webinars. They say imitation is the sincerest form of flattery, so be on the alert for any successful tactics that might work for you. At the same time, watch for any vulnerabilities you might be able to exploit.

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Inc. Resource: How to Conduct Competitive Research

By investing even a small amount of time, businesses of any size can develop a framework for making competitive assessments, gather intelligence on business rivals, and understand how to position their own brand, products, and company in the marketplace. Not only can you learn best practices from competitors, but you can also learn to avoid the mistakes they make.

To learn more, please click here.

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To read the complete article, please click here.

 

Richard P. Rumelt: An interview by Bob Morris

Richard P. Rumelt

Richard P. Rumelt received his doctorate from the Harvard Business School in 1972, having previously earned a Master of Science degree in Electrical Engineering from UC Berkeley. He worked as a systems engineer at the Jet Propulsion Laboratories and served on the faculty of the Harvard Business School. He joined the UCLA faculty in 1976. During 1993-96 he was on long-term leave from UCLA, serving on the faculty at INSEAD, France. At INSEAD, Rumelt headed the Corporate Renewal Initiative, a research-intervention center devoted to the study and practice of corporate transformation. Rumelt was President of the Strategic Management Society in 1995-98. He received the Irwin Prize for his book Strategy, Structure, and Economic Performance. In 1997, he was appointed Telecom Italia Strategy Fellow, a position he held until April 2000. He has won teaching awards at UCLA and received a “best paper prize” in 1997 from the Strategic Management Journal.

Rumelt’s research has centered on corporate diversification strategy and the sources of sustainable advantage to individual business strategies. He occupies the Harry and Elsa Kunin Chair in Business and Society. His published works include Fundamental Issues in Strategy: A Research Agenda co-authored with David Teece and more recently, Good Strategy/Bad Strategy: The Difference and Why It Matters. His current research interests center on corporate strategy and issues of institutional governance. Education: D.B.A. Management, 1972, Harvard University; M.S. Electrical Engineering, 1965, UC Berkeley; and B.S. Electrical Engineering, 1963, UC Berkeley.

Here is an excerpt from my interview of him. To read the complete interview, please click here.

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Morris: Before discussing Good Strategy/Bad Strategy, a few general questions. First, to what extent (if any) has your formal training in electrical engineering proven invaluable to your work on strategy.

Rumelt: The gifts of my EE training were many. First there is a capability in mathematics. Second is an appreciation that technical skills are only acquired by drill and practice.  Finally, there is a confidence that I can understand almost all technical issues if I apply myself. That keeps me from shying away from a wide range of problems and settings.

Morris: Most change initiatives either fail or fall far short of original expectations. Why?

Rumelt: Change is difficult and it takes time. It is hard for people to change their own behavior, much less that of others. Change programs normally address attitudes, ideas, and rewards. But the behaviors of people in organizations are also strongly shaped by habits, routines, and social norms. Real change requires new power relationships, new work routines and new habits, not just intent.

Morris: In Leading Change, James O’Toole suggests some of the strongest resistance to change is cultural in nature, the result of what he so aptly characterizes as “the ideology of comfort and the tyranny of custom.” What do you think?

Rumelt: I agree with O’Toole that custom and comfort are impediments to change. However, it is important to recognize that resistance to change is logical as well. The new “change masters” literature seems to take change as the norm. It isn’t. Humans naturally see change as risky because it is risky, just as mutations in genes are mostly destructive. You would not want to go to work were everything changed every week! The phone system, the office assignments, who reports to who, and the whole set of job expectations.

Morris: How best to avoid or overcome such resistance?

Rumelt: You overcome the logical resistance to change by proving that a new approach actually works, usually on a small scale.

Morris: Peter Drucker and Michael Porter have provided many valuable insights. For example, from Drucker: ”There is surely nothing quite so useless as doing with great efficiency what should not be done at all.” And now from Porter: “The essence of strategy is choosing what not to do.” What are your own thoughts about all this?

Rumelt: Drucker and Porter are each pointing at vital, though slightly different, aspects of strategy. A good strategy focuses efforts on a target, and that focus can only be achieved by not diffusing energy in other directions—that is the meaning of Porter’s dictum of  “choosing what not to do.” At the same time, a good strategy chooses the right target to focus on, not wasting the focus of energy on a target that cannot be affected or that is unimportant—that is the meaning of Drucker’s distinction between efficiency and effectiveness.

Morris: The percentages vary among recent research studies but they all suggest that, on average, C-level executives spend about 10% of their time discussing strategy on a weekly basis and a substantial majority of employees have no idea what their organization’s strategy is.  How do you explain these rather astonishing statistics?

Rumelt: Many C-level executives use the term to refer to big deals or forward-looking financial goals and plans. Others use it to mean overall “visions” or “missions,” or other corporate slogans. However, a real strategy is a coherent mix of policy and action designed to overcome a significant challenge. So a sensible employee might indeed say that they have no idea what the organization’s strategy is—because it seems to have none. Senior managers’ so-called “strategies” are heavy with aspirations and goals, but light on how resources and strengths will be combined to achieve them.

Morris: In your opinion, who in the given enterprise should be involved in the formulation of its strategy?

Rumelt: Small groups of very senior people. Real strategy is not bottom up because it deals with issues that require unexpected or unusual types action, especially of coordination among units.

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To read the complete interview, please click here.

Richard Rumelt cordially invites you to check out the resources at these websites:

http://www.anderson.ucla.edu/x1700.xml

https://www.mckinseyquarterly.com/Strategys_strategist_An_interview_with_Richard_Rumelt_2039

http://www.amazon.com/Richard-P.-Rumelt/e/B001KIRJP0