Lessons in Engagement from Campbell Soup

In a two part interview, Gallup questioned Douglas R. Conant, president and CEO of the Campbell Soup Company on his approach to engagement and how that helped him when he took over at Campbell Soup nine years ago when he company’s share price was down and customer loyalty was falling.

Since Mr. Conant stepped in, Campbell has grown every year. Excerpted below are key nuggets of wisdom from Mr. Conant from the Gallup interview:

On TRUST: “We have what we call our Campbell Leadership Model, and we drive off of that. It basically says you have to inspire trust, and once you earn people's trust, you have permission to do some amazing things.”

On CULTURE: “I strongly believe that you can't win in the marketplace unless you win first in the workplace. If you don't have a winning culture inside, it's hard to compete in the very tough world outside.”

“I said it wouldn't be a top-down culture -- it would be a high-engagement culture.”

On ENGAGEMENT: “You can't ask employees to achieve extraordinary results if they're not fully engaged. That's why we focus a great deal on getting the workplace right so that people are engaged and proactive -- so that people are moving forward arm in arm and competing with a spring in their step. As they become more engaged, they find ways to win in the marketplace that are sustainable.”

“Engagement is embedded into our culture. For me, there simply is no other way.”

On EXECUTIVE LEADERSHIP: “There are only two things that I track at the highest level in this company, and we report those measures each year in our annual report. One is total shareowner return over a rolling three-year timeframe, and the other one is how we are winning in the workplace, as measured by employee engagement.”

“You have to model the behavior; you have to be the change that you want from the company.”

“We've gotten to a point where higher executive engagement has brought a focus to the enterprise, not just to pieces of it.”

On MEANING & PURPOSE: “This recession provides a unique opportunity to seize the day, leverage the momentum we're building both in the marketplace and the workplace, and do something really special. We devote more of our waking hours to our work than anything we do, oftentimes more than to our families. If we can't make that work special -- meaningful in some compelling way so that we get excited about doing something special -- shame on us. For me and many others at Campbell, it's about leaving a legacy.”

Defining Employee Engagement * It Is What You Need It to Be

I’ve followed and been involved in discussions too numerous to count on the proper definition of employee engagement, is engagement real or just the latest HR buzz word, and similar. The reality is well expressed by APQC in a recent Workforce Management article about a study of various leading organizations and their engagement efforts:

“Each organization in the study is clear about what it means to be an engaged employee. That definition is reinforced through standard processes and practices for collecting employee engagement information.”

Each organization defined engagement differently, depending on their company’s priorities, goals and experiences. And this is just fine. The catch is that companies must be able to define engagement for their environment, and then set clear processes and metrics to measure engagement consistently on an ongoing basis. These processes and metrics must be established before engagement efforts begin in earnest or results will be skewed. As I’ve said before, if you don’t know what you’re working towards before you begin, how will you know when you’ve arrived?

APQC indicates the benefits of high levels of employee engagement based on both qualitative anecdotes and quantitative research as:

• Increased quality, productivity and attendance
• Increased new product innovation.
• Reduced in team member turnover (19%) and workers’ compensation claims (27%)
• Increased net revenue (22%)
• Increased EBITDA (43%)

But what are the risk factors of creating an environment in which workers cannot engage? A poll cited on the Engagement Factor blog found those who are disengaged:

• See job responsibilities and assignments as tasks to get done with less regard for the impact
• Strive for the path of least resistance versus working toward maximum results
• Exhibit self oriented behavior versus an interest in their customers and team Procrastinate

If you’re ready to begin measuring employee engagement in your organization, a succinct resource is from HR Magazine, offering suggestions for defining engagement for your organization, distinguishing employee engagement from employee satisfaction and what that means for how you measure both, who should be involved in structuring the surveys, and tricks of the trade.

Paul Hebert of i2i just reminded me in a comment to include the Enterprise Engagement Indicator, which provides both a measure of how ready your organization is for engagement activities as well as what your current level of engagement is within your organization. Thank you for the recommendation, Paul!

How do you define engagement in your organization?

Employee Engagement Trending Downward

Recent results from Modern survey on the state of employee engagement in the U.S. have shown employee engagement down in all aspects.

“After a year of upward trending engagement scores, Modern Survey's latest study on employee engagement in the U.S. workforce shows a precipitous decline in workers' psychological investment in their organizations. While the economic recession may have temporarily motivated employees to put forth extra effort on the job, the latest data from this scientific study suggests U.S. workers may have hit their breaking point, as all five components of Modern Survey's Employee Engagement Index are now trending downward. …

“The most significant declines are statistically significant six percentage point drops in the number of workers who say they "take pride in their company," (from 79% in August 2009 to 73% in February 2010) and "intend to stay with their company for a long time" (from 63% in August 2009 to 57% in February 2010). …

“Bruce Campbell, Senior Consultant at Modern Survey, believes that if companies do only one thing right now in regards to employee engagement, it should be to express sincere appreciation for employees and recognition of their contributions, and it should come from the organization's most senior leaders first, then repeated and reinforced by managers at all levels.”

Of particular interest in this research are two points. First, the comment that “US workers may have hit their breaking point” as the reason for the drop – this could also be attributed to repeated signs that the economy is improving, giving rise to employee hopes to find a new job. As Right Management research noted, 87% of Americans are engaging in some level of activity to leave their current position. The distraction these thoughts bring are sure to lower engagement levels as well.

Second, Bruce Campbell’s advice bears repeating: if you only do one thing now to contribute to employee engagement, recognize and appreciate your employees. Repeat and reinforce at all levels to help employees see the meaning and purpose in their work, know they are appreciated for their efforts and help them to once again take pride in your company and stay for the long term.

Trends in Recognition Program Rewards

A recent issue of Incentive magazine offered interesting insight into trends in “incentive” programs and 2010 expectations in a reader forecast survey.

Results of the survey found that readers expect more budgets to be cut than increased in 2010, “but companies that maintained programs in 2009 say they gained a competitive advantage.” In answer to the open-ended question on reader plans to maintain and improve motivation and loyalty this year, a top response was “More recognition, both private and public.”

The study in particular looked at travel, merchandise and gift card programs, finding that:

• In 2010 budgets, as compared to 2009, gift card budgets increased or remained unchanged more than budgets for travel or merchandise.
• In terms of number of programs that will be run in 2010 vs. 2009, gift card programs increased more than any other while travel and cash programs were eliminated more frequently.
• For plans to reduce or eliminate travel, merchandise or gift card programs in 2009, gift cards once again were lowest across the board.

What can we conclude from these findings? Companies are finding that programs based around a reward delivery model of gift cards deliver the most return on investment. This is especially true in Globoforce programs that do not require the end-user to figure out what cards to offer in various regions of the world, or how to structure multiple use cards. Our Ex*change Network of global shopping, dining, travel, entertainment, adventure and charity providers lets your recognition recipients easily select the Gift of Choice most relevant and personal to them with the least amount of adminis-trivia on behalf of the company.

The Perils of Bad Research

I was appalled to see the structure of research that was recently released concluding that CFOs believe bonuses were the most effective way to acknowledge a job well done.

The research was poorly constructed with pre-directed selections (bonus, time off, department lunch, tickets to events) that were very specific but no broad option such as “recognition program”. From such a narrow selection of unrewarding rewards, no wonder CFOs primarily chose “Bonus” as most rewarding.

As another comment on the research pointed out, “bonus” itself is ill defined as some would consider non-cash (tangible) rewards to be bonuses as well.

Interestingly, the same organization released a survey a year ago that found:

"68% of CFOs said they are implementing strategies to boost the moods of their teams. The survey found that the most common way businesses are attempting to raise workplace morale is through increased and improved communication (37%); while 15% are enhanced employee recognition programs.”

Clearly this was a much more properly structured study. Our own research found that nearly all respondents (CFOs and HR managers) agreed that HR and Finance need to be on the same page, only 58 percent of respondents say this is the case in their organization. Even though best practice suggests that Finance is the business unit that should require ROI, few survey respondents (36 percent) indicated that Finance was taking a leading role in HR processes, programs and technologies.

My caution to you, be careful how you read research.

Excellent Recognition Guidance from the Corporate Executive Board

The Corporate Executive Board (CEB) recently ran an excellent three-part series on recognition and reward best practices. Highlights are below, but be sure to click through and read the full series.

From Beyond the Bonus: Four Ways to Recognize and Reward with Little or No Money:

“There has been much written about the limitations of salaries and bonuses to motivate people to work hard and produce results. If it isn’t all about money, what is it about? Most management experts emphasize appreciation, recognition and building a sense of pride over increasing monetary rewards. This is not only good practice but for most companies these days, it is also a necessity.

“It’s a sad fact of work life that most leaders don’t thank their employees enough. A simple thank you goes much farther than you think, especially if it is connected to a job well done and delivered authentically. Acknowledging employee accomplishments and good behavior through meaningful words or gestures can boost employee’s emotional commitment. Be specific about the accomplishment and describe what helped the employee succeed.”

In Choosing the Right Approach to Employee Recognition, the CEB gives much the same advice we’ve been preaching for years:

“Even employers who are committed to recognizing and rewarding their employees have a hard time doing it right. Deciding what to reward and how is not easy, and that difficulty leads many employers to rely solely on financial compensation to motivate their people. … Here are five requirements for effective recognition and questions to help you evaluate your approach: connected to business goals and values, sincere, meaningful and adaptable, relevant, timely.”

In this post, CEB also points out the deviant behavior that can result from recognition done wrong. This is where the “strategic” component of recognition becomes critical. You must positively reinforce employees only for those actions that reflect the company values while achieving the strategic objectives. This approach ensures employees who, for example, increase productivity but do so by harming the environment will not be rewarded for their efforts. Values-based recognition is the key to ensuring employees display the right behaviors in achieving the company goals.

From Balancing “I” with “We”: Rewarding Teams and Teamwork:

“In a team-oriented environment, employers must pair individual employee awards with collective team recognition in order to effectively motivate teams. … Recognize team behavior and accomplishments. It’s one thing to recognize a team for achieving a particularly difficult goal. It’s another to hold them up for the way in which they achieved that goal. … Encourage employees to recognize peers. Recognition from superiors isn’t the only form of recognition that matters, or motivates. Knowing that your team thinks you’re doing a good job is important to keeping people engaged.”

There’s another aspect here as well. I was recently asked in another forum how to appropriately recognize in a situation involving a very long, complex project in which a team member had completed their portion of the work in its entirety long before the entire project came to fruition. My answer: recognize the individual in the moment for his great work and delivery that helped the team project stay on track. Then when the project is complete, recognize the entire team.

Avoiding “Streep Syndrome” in Your Recognition Practices

In my newsfeeds and blog readers, a good headline will often jump out and catch my attention. Soon after the Academy Awards in Hollywood, this headline caught my eye: “Too good to reward? You might just have Streep Syndrome.”

What is “Streep Syndrome?”

“Those who go through it are the go-getters, the ones who bat every assignment out of the park, the ones colleagues always want to work with, but who often find themselves overlooked when it’s time for monthly awards, promotions or end-of-year bonuses.

“They've set such a standard of excellence that managers often don’t think of rewarding them. While compliments from your colleagues and praise from your supervisor are nice, the incentive to work hard can fade quickly without the formal recognition of accolades or promotion.”

There’s much in the article that intrigues me – expectations of high performers become the norm – but also much that I disagree with – recommendations to these go-getters to track their own achievements and self-promote to avoid being passed over.

Does this seem backwards to anyone else? If yours is a company where the exceptional is consistently overlooked, then your company culture is broken.

Instead of focusing solely on “monthly awards, promotions or end-of-year bonuses,” broaden your positive impact on all levels of performers through frequent and timely behavior-based recognition that doesn’t wait to praise and appreciate people for their efforts. Don’t teach your employees to care less, recognize them for caring more when they deliver top-notch results while demonstrating the values you as a company believe important.

Disparate, Unconsolidated Recognition "Islands" Are Putting You at Risk & Adding Unnecessary Expense

Once you’ve aligned your strategic recognition program to reflect your changed company objectives to help communicate new strategies, approaches or even organizational structure, how do you know your efforts are succeeding?

Disturbing results from a survey of senior managers at more than 500 blue-chip organizations in the US, UK and Ireland found:

“More than half the respondents said their organisations are structured in a way that prevents data and analytical talent from generating enterprise-wide insight.

“For instance, almost half of the respondents (45%) said data are housed in isolated parts of their organisation, and more than half the respondents (52%) said that analytical talent is housed separately from the relevant data at their organisation. In addition 13% of employers in the UK and Ireland said that their organisations do not have any professionals dedicated to analytics.

“Overall, four out of 10 respondents said their current technological resources and systems greatly hinder the effective use of enterprise-wide analytics in their organisations. And 51% said they have more opportunities to use analytics to improve the business than they have analytical resources to exploit them.”

There are three distinct problems highlighted here:
1) Information isolated in often inaccessible silos with poor tech resources
2) Data separated from the people that know how to analyze it
3) No people tasked with understanding what the data is telling them

We find this to be true with many companies we work with to develop truly strategic employee recognition programs. Often, large global organizations are operating many different recognition initiatives within silos of business unit, division or geographic area. Managers, trying to do the right thing, will reward deserving employees out of their own pocket, and then file for reimbursement of that expense on their expense forms. Years of service or long service programs are completely disassociated from behavior-based recognition efforts, which are also unrelated to ongoing results oriented incentives schemes.

The cost of running such disassociated programs is exponentially higher than necessary and the risk of hidden, untracked, unreported and untaxed recognition efforts is high. Simply by consolidating all of these disparate efforts into a single, strategic program can save 50% of costs. Consolidation also enables single-site reporting for true analytical insight into spend, usage, and other patterns that, once understood, can help management change the company culture itself.

Too often, companies will choose to leave disparate programs in place because “units prefer to do what they want to do for recognition.” That is no good reason to throw money away and put your company at risk.

Recognize the Right Behaviors * Learn More from Aberdeen

I was pleased last month to have the opportunity to host Aberdeen Group Research Analyst Mollie Lombardi in a webinar on: “Recognizing the Right Behaviors to Achieve Company Objectives.” (Available for download)

Mollie will shared insights uncovered in recent Aberdeen reports: “Beyond Satisfaction: Engaging Employees to Retain Customers” and “Globoforce: Recognizing the Right Behaviors to Achieve Company Objectives” and how they relate to today’s business climate.

Specifically we discussed the challenges driving engagement efforts (largely changing customer expectations and the need to tap into creativity and innovation) and the business results that come from engagement (increased customer satisfaction/loyalty, decreased turnover/retention, and increased percentage of key vacancies filled internally).

I also appreciated how Mollie defined the difference between satisfaction (a one way street) and engagement (what drives business value in a virtuous circle) as well as the definition of engagement itself – aligning individual priorities, goals and desires with the needs of the organization in order to deliver business results. Engagement is about alignment, but it’s also about fit. You’re not trying to bend employees to your will, but finding those who fit and then amplifying that.

We also looked at case studies in this area from Avnet, Intuit and Quintiles, and how the achieved the main benefits of a culture of recognition seen in best-in-class (as defined by Aberdeen) organizations:
• Performance goals and development plans understood and agreed to
• Managers provide regular, informal feedback
• Formal recognition in place
• Alignment in rewarding and recognizing the right behaviors
• Aligning reward and recognition to the desires of the individual

Mollie also discussed the importance of championing engagement efforts, but also noted that best-in-class organizations have the primary champion of CEO or president. This must come from the top with leaders that will walk the walk as well as talk the talk.

Why is all this critical? As Mollie pointed out, 2010 is the year that people will say: “I wish I thought about engagement last year.” This is especially true as we emerge from the recession and options for your employees open up.

Be sure to download the webinar to hear more of Mollie’s insights along with examples in the real world from companies like yours.

Get the Most out of Recognition with Strategic Alignment

Are you getting the most out of your employee recognition program? If you’re not basing recognition on behaviors and actions that are in alignment with your company values and strategic objectives, then you’re throwing your recognition investment away.

I was pleased to see the Corporate Executive Board recently reiterate much of what we’ve been preaching about the importance of alignment for the last year or so. In a recent article in Businessweek magazine, the CEB said:

In a recent study of 50,000 employees … over 60% of surveyed employees noted that they have both experienced drastic changes in their business and expect changes to continue. Another 28% either experienced change or expect change to come shortly. More important than measuring employee recognition of change, companies should be trying to understand whether employees are aligned with the new organizational strategy. Chances are that they are not.

Simply put, almost two-thirds of all employees are 33% as productive as they can be because they don't understand what they are now asked to do. (emphasis mine)

CEB has identified that companies need to align their employees with the corporate strategy. Progressive companies that successfully align employees to their corporate strategy are realizing the competitive advantages originally targeted in organizational transition.
• Refocusing on the customer - Companies in the service industry are realizing 10% gains in customer satisfaction.
• Launching new products - Measurable levels of innovation have been documented to improve by 15%.
• Trying to be more nimble in the market place - Employee perception of organizational speed has been cited to increase by upwards of 35%.
• Aligning employees to the corporate strategy - helping them understand their new call to action - is a critical driver of success in today's market.

This aligns with research and recommendations from Mercer based on a survey of members of CIPD. Findings showed that 84% of respondents had undergone restructuring in the last two years, but there is a clear disconnect between current approach and steps HR pros think are necessary to keep employees motivated and engaged.

As I’ve said before, if you’re going to improve your business results, then you must get all of your employees aligned with your changing/changed business strategies. One of the most effective and positive methods for creating alignment is through strategic recognition. These highly structured programs communicate clearly through positive reinforcement the desired changes you need your employees to make in their everyday work and focus to achieve your new objectives.

Amazon Exits Incentives Market * What It Means for You

News broke this week that Amazon.com is exiting the corporate rewards merchandise fulfillment business it entered in 2007. For its traditional catalog merchandise incentive company partners, Amazon’s Merchandise Rewards arm acted as the unseen drop-shipment fulfillment provider. According to Incentive Magazine, Amazon’s merchandise rewards partners were given 45 days notice with a few of the largest partners being given more time. Amazon is not exiting the gift card and electronic gift code business.

Two important questions arise from this announcement:

Why is Amazon exiting incentives?
There is much speculation, but four credible reasons rise to the surface.

1) Taxes -- This week, Amazon fired thousands of affiliates in Colorado, saying it refused to be forced to collect taxes under a new state law. (More details available from the Denver Post.)
2) Direct Customer Access – Amazon wanted direct access to the consumers choosing rewards through the Amazon platform, which was blocked by the incentive company partner.
3) Customer Service – Paul Hebert at Incentive Intelligence tells us his sources say: “Although profitable, the decision was made to drop fulfillment through incentive programs due to customer service issues. … From Amazon's point of view this created a negative impression of their customer service.”
4) Excessive markups by incentive providers - My own sources tell me that customers were complaining to Amazon of feeling ripped off by the prices they were paying for the incentive reward (usually 30-50% greater) in comparison to the price of the item directly on Amazon, hurting Amazon’s brand image.

What does this mean for companies who offer recognition or incentive programs to their employees?
The answer depends on who you rely on as your recognition or incentive program provider.

If you rely on a traditional merchandise catalog provider, you can expect:
1) A far smaller catalog offering as your provider will have to remove the thousands to hundreds of thousands of options they offered through Amazon, drastically limiting employee reward choice. Although these merchandise providers will be looking for an Amazon replacement, any who might consider it will face the same challenge of state taxes and the same desire for direct customer access.
2) Removal of low value rewards entirely or replacement of these rewards with gift cards. Amazon made it easy for traditional rewards catalogs to offer smaller merchandise awards with a value less than $50 – something they could not do otherwise as the S&H expenses are too high.
3) A continuation of massive markup rip-offs on merchandise reward items.

If you rely on Globoforce to provide a mix of globally desired rewards, there is no change. We are a long and trusted partner of Amazon, offering their gift cards and electronic codes through our global ex*change network of thousands of providers around the world. As always, we give your program participants access to ALL of Amazon’s merchandise at no mark-up. Dollar for dollar, euro for euro, yuan for yuan, employees know the exact value of their reward.

Ask yourself:

If you use a merchandise provider to fulfill your recognition or incentive program, how do they justify this massive rip-off of employees? Amazon chose to exit the market rather than harm their brand image. How do you envision offering such a program would affect your own brand image?

Do you really know who your suppliers are? What happens to your recognition program if one of their hidden suppliers decides to end their relationship, like Amazon recently did?

Recognizing a Multigenerational & Culturally Diverse Workforce

Does your workforce span multiple generations from GenY to Boomers and cultures from New York to New Delhi, Berlin to Beijing?

My article on just this topic appears in the latest issue of Workspan magazine. In “How to Reward a Multigenerational and Culturally Diverse Workforce,” I offer insight into engaging four generations of employees from global cultures by redefining recognition or the 21st century. Guidelines for achieving this include:

1) Make it matter – help employees see the meaning and purpose in their work by uniting them behind the company vision and inciting passion to achieve your objectives

2) Reward frequently and in a timely manner – make sure the recognition moment closely follows the act that is being recognized to ensure the act is top-of-mind

3) Give the reward of choice – cater to the demographics of a global, multigenerational workforce and their unique needs by letting them invest in their local communities with broad, local choice

4) Involve everyone – move beyond traditional elitist programs that only target the top 10% to involve up to 90% of employees in a culture of recognition

5) Measure results to ensure success – when measured appropriately, recognition can reveal patterns of behaviors and understanding of company values and objectives

As I conclude in the article, in today’s challenging economy, companies are looking for new and creative ways to enhance performance within the organization. Realizing employee engagement through strategic recognition efforts holds the potential to be the next significant return on investment opportunity. These programs empower companies to create a unified, global workforce, aligning employees from multiple generations and multiple cultures around the very essence of the company, its core goals and values.

FORTUNE: Motivate without Spending Millions

I’m thrilled to share with you a feature article in April 12 issue of Fortune magazine: Motivate without Spending Millions."

The article discusses employee recognition, fully capturing our position that frequent, smaller rewards across the vast majority of employees is the best approach towards creating the most effective recognition program. This stance was validated in the article by Stanford Graduate School of Business Professor Hayagreeva Rao and the Corporate Executive Board, with additional narrative about our client Intuit’s employee recognition program.

Highlights from the article:

“The standard way of recognizing good performance – bonuses, new titles, high-priced quarterly giveaways to only the very top people – doesn’t motivate employees very effectively.”

“What really works, says Eric Mosley, Globoforce’s founder and CEO, especially for a budget-constrained company are small awards, all the time, to almost everyone. … By studying employee satisfaction and retention rates, he discovered that the best systems had similar and very surprising characteristics.”

“Counterintuitive though they may be, Globoforce’s theories hold up, says professor Hayagreeva Rao, an expert in organizational behavior at Stanford, who is studying whether motivational “juice” is a type of dopamine that is active by unexpected positive results.”

“Intuit VP of human resources Jim Grenier says that employee satisfaction with the recognition of their accomplishments is up four percentage points since the company changed its approach. ‘I’ve never seen bigger awards get such a bang for the buck,’ he says.”

To see the “similar and surprising characteristics” of the best systems and read the rest of the article, visit Fortune at this link.

The Role of Quotas in Employee Recognition

I recently received an email newsletter from Bob Nelson in which he advocates strongly against recognizing people on a quota. His point is:

“You can’t manage by a formula. It just doesn’t work. You have to manage from the heart. You have to e real in real time, which can be a messy thing, not something you can simply check off your ‘to do’ list. You have to be honest and open, giving of yourself to others in a way that isn’t a fine-tuned, manipulated image. As Ken Blanchard used to say, ‘Management is what you do with people, not what you do to them.’”

While I agree with the sentiment of Bob’s message, it is idealist – especially if you as a leader are working to foster a culture of recognition across your workplace. As I wrote about the effective management method of Trust and Track, yes, you have to trust your employees to do what is right (even in recognizing others as Bob suggests), but then you must also track their efforts and success in doing so.

Trust and track is a two sided equation. Rest only on one side and while being idealist, you run the risk of being foolhardy. As management guru Peter Drucker famously said: "If it is not measured, then it is not managed."

The logic behind this is not about setting hard goals (nor quotas) for recognition, but rather setting guidelines or parameters for where you expect the level of recognition to be to achieve your strategic program goals. Leave managers to their thing with recognition (from the heart), but collect and share the data of the power of that recognition.

It’s truly incredible what happen out of simply sharing the data. Managers want to track well against what they perceive to be best practice. Steve Kerr speaks well about the power of a quota in overcoming the irony of scarcity in his recent book Reward Systems: Does Yours Measure Up?

In this case, careful definition of terms is important. Setting hard quotes, if understood as penalty inducing, is certainly not appropriate. However, setting guidelines/parameters is very important, as is bringing tremendous visibility to that data afterwards. If instead the word quota is understood to mean "use it or lose", then it is worthwhile. For example, tell managers their available budget for recognition and to use it or lose it! No one wants to leave value on the table.