Top 5 Critical HR Priorities: #4 Managing Organizational Change

Recognize This! – Values + Strategy + Recognition = Effective Communication of Change Needs

My fourth post in a series about the Top 5 Critical HR Priorities for 2011 from the Corporate Leadership Council HR global agenda poll, continues to bring together the learnings from Priority 1, Priority 2 and Priority 3.

Priority 4 for HR in 2011: Managing Organizational Change

It’s not surprising this is a hot topic in today’s economic environment. I’ve written before about the impact of the recession (and the resulting changes in company strategy and objectives) on employee understanding of those changed objectives and what that means in their daily work. Recent research from Booz & Co. reported “56% of executives say ensuring day-to-day decisions are in line with strategy is a significant challenge.”

Getting this right is now more crucial than ever. Numerous indicators point to an improving economy and job market. Employees have more options for employment. Customer budgets are opening up. What are you doing to effectively and appropriately redirect employee energy to those projects and strategic targets you need them to hit? How are you ensuring this message is carried accurately to all global locations so no employees feel like outcasts?

Employees are more than willing to work on these priorities – if they know what they are. Commenting on results from research conducted with Gagen MacDonald, an APCO Worldwide senior executive commented:

"The large gap between employee and employer connection we've seen in the last two years is alarming. It's clear from the survey results that to close this gap, CEOs and their executive teams need to have clearly defined company values aligned with their business strategy and support … and regularly communicate those values personally."

There’s no better way to do this than through strategic employee recognition in which employees are frequently recognized every time they perform in such a way that demonstrates a company value while contributing to achieving a strategic objective. This deeply ingrains in employees – in the most positive way – what it is the company needs from them to succeed.

But also never forget the power of the trend setters in your organization. Who do you think sets fashion trends? Designers? Celebrities? Wrong. It’s Pantone – the color company.

You’d likely be surprised at who the true trend setters are in your organization – the behind-the-scenes leaders others look to for how to behave, respond and perform. You can easily uncover these trend setters by strategic application of social recognition – drawing on the wisdom of crowds within your organization to find those most recognized and most appreciated. Those are the people who will carry your torch of change most effectively throughout the organization.

Are you experiencing organizational change? Has your company, team or product line shifted direction? Do you know what you should be doing now in support of change? How is that communicated?

Prior posts on 2011 Top HR Priorities
Priority 1: Improving Senior Leader Capabilities at Managing the Workforce
Priority 2: Improving Manager Capabilities at Managing Their Direct Reports
Priority 3: Engaging Employees

Why Focusing on Shareholder Value Is Wrong

Recognize This: Shareholder value will never guarantee customer satisfaction or an increase in their purchasing behavior.

Is your company a slave to the quarterly analyst call? Are you focused, before all else, on increasing shareholder value as the best marker of company success?

Even Jack Welch has denounced this as a dumb idea. More voices continue to chime in, most recently Roger Martin, dean of the Roman School of Management at the University of Toronto, Canada, as quoted in TLNT:

“Concentrating primarily on creating shareholder wealth is ultimately a loser’s game.  The reason: the only sure way to increase shareholder value is to raise the market’s expectations about the organization’s future results. Unfortunately, executives simply can’t do that indefinitely.… Talented executives can grow market share and sales, increase margins, and use capital more efficiently, but no matter how good they are, they can’t increase shareholder value if expectations get out of line with reality.”

Instead, Towers Watson (authors of the article) suggest:

“Instead of training her gaze directly on shareholder returns, a high performing executive leader should pay attention to the performance of employees and the linkage of employee performance with customer satisfaction and purchase behavior.”

If employees are focused on making customers happy such that they buy more, shareholder value is sure to increase. But there’s no guarantee with the reverse equation of shareholder value first, employees and customers a far-behind also-ran.

In fact, Gallup research found causation between employee engagement and financial success. Guess what? Working for a financially successful company does not necessarily make employees more engaged. But engaged employees do drive financial success.

One way to accomplish this is by including “customer satisfaction” as a reason for recognition in your strategic recognition and rewards program. Doing so reinforces for all employees the value the company places in focusing on the customer, and gives employees an opportunity to acknowledge each others’ efforts in making customers happy.

What does your company focus on at its key marker of success? Shareholder value? Customer satisfaction? Employee retention?


Also, don't forget to join me for the complimentary IHR Rewards & Recognition virtual conference tomorrow and Thursday, March 30-31, especially for my two sessions:

• March 30, 12:30 (Eastern) - Presenting with Betsy Walker from Quintiles, a Globoforce customer, on The New R&R: Increasing Retention Using the Power of Recognition
• March 31, 11:00 (Eastern) - Presenting The Future of Rewards and Recognition

How to Stop Talking AT Your Employees

Recognize This: If you want employees to think like “owners,” give them a reason to care about the business like an owner would.

I’ve heard nearly every cliché under the sun for employee:

·         Team member

·         Partner

·         Customer Success Enabler

·         Owner (at an ESOP company)

What others have you heard? Why do I bring this up? Because too often such cliché attempts to “get employees to care more about the business” are undertaken as the solution. How ridiculous.

Judah Schiller, CEO of Saatchi and Saatchi, recently had this to say on Huffington Post: 

“Many companies are still missing the boat when it comes to getting their people to show up at work with their hearts, minds and bodies present. Most employees view work only as a means to an end--a way for them to collect a paycheck and receive health benefits. Part of the problem is that companies consistently fail to make a strong connection between their own "big picture" and its relevance to their employees. They continue to talk at rather than with their workers, dictating what's good for them, rather than making an effort to understand their wants and needs.”

Yes, employees want to understand the big picture. But simply telling them the big picture doesn’t accomplish the goal. You have to make that big picture real in their everyday work. And you can’t do that through a slick communications program, online newsletter or Twitter campaign.

If you want to make your “big picture” matter to your employees in such a way that they are focused on helping you achieve it in their daily work, you need to make it real for them.  The best way to do that is through strategic recognition in which you tell employees – frequently, honestly and specifically – how their individual efforts are helping the company succeed. Praise them when they get this right. Make it real in their daily work and connect that to how those efforts are contributing to achieving the company’s strategic objectives.

It takes a bit more effort than announcing all “employees” are now “team members,” but the results are far more effective – and you may have some fun along the way.

Also, don’t forget to tweet your tips for employee appreciation and recognition using hash-tag #appreciationtip to be entered to win a copy of the Winning with a Culture of Recognition eBook or Amazon Kindle pre-loaded with the eBook.

Differentiating Employees: Why Not Let Them Do It Themselves?

Recognize This: No one knows the contributions and achievements of an employee as well as everyone does.

In Monday’s post, I discussed the problem of differentiation creep in the workforce – how the percentage of exceptional employees is increasing as the percentage of poor performers is decreasing.

What’s the solution to the problem? The Workspan article (“Measuring Employee Performance the Right Way,” January 2011. Membership required.) gets close:

“People need to know how they are doing, and individual performance feedback should come as soon as possible on a direct basis when employees achieve, or fail to achieve, their objectives – project completion, outstanding service, missed targets, goal achievements and so on.”

I agree with that statement 100% -- but it doesn’t go far enough. If you truly want to differentiate employees, let them do it themselves. Let all employees recognize excellent behaviors, actions and results demonstrated or achieved by their colleagues. Require specifics on what was done and why it was important. Now you have a much more complete picture of employee achievement throughout the year – from the wisdom of crowds. 

What are your solutions for differentiation creep?
 

Also, don’t forget to tweet your tips for employee appreciation and recognition using hash-tag #appreciationtip to be entered to win a copy of the Winning with a Culture of Recognition eBook or Amazon Kindle pre-loaded with the eBook.

“What, Exactly, Do You Want Me to Do?” Factors of Change

Recognize This: Employees may buy into the need for “change,” but they won’t know how unless you tell them in a way meaningful to them individually.

Steve Roesler, author of the excellent All Things Workplace blog, recently wrote on change management. 

He told the story of the company president who laid out the perfect story for why a change in the corporate culture was necessary, getting discussion and total buy-in along the way. Everyone was on board. Then a manager asked: “I just need to know one thing: what, exactly, do you want me to do?”

That’s the crux of change management challenges, isn’t it? People may agree the proposed change is good and the right thing to do, but if they don’t know how to contribute to that making that change happen, you’re not going to get anywhere.

The same is true here. “What, exactly, do you want me to do?” Getting people to agree to the *VALUE* of a proposed change is not the difficult part. Helping them implement the many big and little steps to make that change a reality -- now that's a challenge. Clearly telling people is certainly the first step. But then positively recognizing people and reinforcing those behaviors, efforts or outcomes is critical to making the change real for every employee.

Like I said last month: Seek out behaviors you desire as foundational to your culture. Praise the people demonstrating those behaviors. Repeat. Often.

How successful have change initiatives been in your company? Did you understand exactly what you needed to do to bring about the desired change?

Employee Well Being and Recognition

Recognize This: “Well-being is the next employee engagement.”


Five years ago when Eric Mosley, my CEO, and I began talking about employee engagement as a critical outcome of employee recognition and an even more critical component of company success, we had to spend a good deal of time explaining the concept as the majority of HR pros and influencers had never heard of it.

Now we’re seeing a new trend on the horizon, one not yet receiving much air time or understanding – employee well-being.

I don’t mean “wellness.” Well-being is a much broader term, defined by Gallup as: “all the things that are important to how we think about and experience our lives.” Gallup continues:

“Our teams were able to establish the relationship between wellbeing and everything from healthcare costs to productivity levels. It’s now possible to show how an employee with higher wellbeing costs less to insure, boosts performance, and creates engagement.”

Tony Schwartz, author of The Way We Work Isn’t Working, agreed in a blog post on Harvard Business Review:

“So what most influences employee engagement? … The degree to which employers actively invest in meeting the multidimensional needs of their employees.

“The second core need all of us share is to feel emotionally secure — meaning valued, recognized, and appreciated. Less than 40 percent of employees worldwide feel their managers are genuinely interested in their well-being. Only one out of ten employees feel they're treated as vital corporate assets. …The vast majority of employers fail to recognize a simple and immutable truth: how people feel at any given moment profoundly influences how they perform.”

That’s certainly true for me. When I feel valued – when I believe my contributions are helpful to my team members, my customers, my company – I perform at my peak. I’m running on a pure sense of that what I do really matters within the big picture.

Is the same true for you? Would you say your manager is interested in your well-being? When you do feel like “you’re a vital corporate asset,” does your performance improve?

Employees Don’t Know Your Objectives & Don’t Care

Recognize This: If you want your employees to care about your strategic objectives and work to achieve them every day, you better make it clear what those objectives are in their daily work.

How about some frightening statistics to shake up the middle of your week? (Quoting from Fake Work research as cited in TLNT):

• 87% of employees are not satisfied with the results of their work at the end of most weeks
• 73% of workers say their organizations’ strategies and goals are not translated into specific work tasks they can execute.
• 70% of workers do not know what to do to support their organizations’ strategies and goals.
• 81% of workers do not feel a strong level of commitment to their organizations’ strategies.

Let’s boil that down. People don’t know what you want them to do, don’t know how to do it anyway, don’t particularly care, but at least they’re somewhat dissatisfied for it at the end of the week.

Spouting strategies does little to align employees with your goals. It’s not that employees don’t want to help the company achieve its strategic objectives. It’s that they don’t know how. That’s where strategic recognition comes in as a very powerful tool for communicating both what the company needs down and how each employee contributes to that. When you thank an employee – specifically and with details – for achieving an objective (including a description of the work and the objective) it becomes clear to the employee how they are helping.

Do you know your company’s strategic objectives? Do you know how you contribute to achieving them in your daily work? Do you care?

You CAN Manage Your Culture. Behaviors Are the Key.

Recognize This: Changing and managing your culture is simple, but not easy. It begins with finding and praising the behaviors you want to underpin your culture.


We’re often asked about our book Winning with a Culture of Recognition: “Is it really possible change and proactively manage a company culture?”

Unequivocally, yes! And doing so is relatively simple. But it’s not easy.

The steps you need to take to change and manage the culture you want are fairly straightforward, as discussed quite eloquently in a recent Strategy + Business article, “Stop Blaming Your Culture,” by Jon Katzenbach and Ashley Harshak, but finding the courage, diligence and desire to take those steps is not easy.

The first step – an important realization – is that you cannot deny the power of the culture you already have. Rather, you have to find ways to work within that culture to encourage only those behaviors you want to see influence the new culture you desire and to discourage behaviors you don’t. Katzenbach and Harshak put it this way:

“You need to focus on specific behaviors that solve real problems and deliver real results. This, in turn, enables people to experience the results of thinking differently. Experience becomes a better teacher than logical argument.”

Or, for a practical example they use in the opening paragraph of the article:

“It would have been easy for Gray (new commandant of the US Marine Corps) to blame the damaged organizational culture for the problems he inherited, and to launch a formal, full-scale change initiative. But instead, he began to praise and seek out elements of the old Corps culture, such as the ethic of mutual respect.”

Seek out behaviors you desire as foundational to your culture. Praise the people demonstrating those behaviors. Repeat. Often.

Simple, but not always easy.

Sacrificing Company Culture Puts Market Share at Risk

Recognize This: Commitment to your company culture cannot rise and fall with economy.

During the recession, many companies took harsh actions they likely had no choice but to do. But many others took similar actions out of fear or even greed.

Those who were able to stay the course, however, are now working from a much stronger economic position today. For example, Panera Bread’s Executive Chairman and Founder Ronald Shaich explained their approach:

“We've continued to invest in labor in our cafés and the quality of our people. We've invested in the quality of the food. When everybody pulled back and we did more, the difference between us and our competitors went up. And we've been taking market share. We had near double-digit [same-store sales] for over a year now. The stock has tripled in the recession.”

By staying the course in its commitment to its culture – the behaviors and actions that make the company work – Panera Bread is now taking the lead in its industry, even through a recession. This is not surprising, based on research I’ve written about before:

“With extreme downsizes (in workforce) in the long term, companies really do suffer relative to competitors in the same industry facing the same sets of economic conditions. Extreme downsizers are companies that cut their workforce by more than 20 percent. … Most of them lag their industry for as long as nine years after a recession.”

Can you afford to lose market position for 9 years? Did your company take drastic (or even moderate) actions in the recession? What effects are you seeing in your colleagues? Do you see any improvement as the economy improves or are the effects lingering?

How to *Create* a Culture of Recognition

Recognize This: A culture reflects a process that has become a habit.

Now that we understand what a company culture is, how do you do it?

Patty Azzarello in TLNT offered this tip:

“Say thank you. Creating a culture of recognition is a very powerful thing. Make sure you have ways of knowing when good things happen, and personally thank people. Make recognition and appreciation a process and a habit.”

You need both.

Process: A system that both makes giving recognition easy and ensures that it happens. This process could be formal or informal, but it must become as much a part of “the way things are done around here” as product development or customer service.

Habit: This speaks to encouraging an attitude of recognition – an approach to every day at work where people stop, look around, notice what others are doing and take the time to say “thanks.” Habits take time to form and require encouragement as they settle in place. Managers are responsible for making sure “process” becomes “habit.”

Once that happens, your culture of recognition is firmly in place.

What kind of culture do you have in your organization? A culture of recognition? A culture of intimidation? A culture of cooperation?

How to Conduct a GAP Analysis of Leadership

Recognize This: Employees need Goals, Appreciation and Purpose, not just tasks.

Who do you consider good models of leadership? If you had the chance, who would you want to mentor you on your leadership style?

One person I’ve always admired is Colin Powell, former U.S. Secretary of State, national security advisor and chairman of the Joint Chiefs of Staff. Since he left public service, General Powell has made quite a career speaking and writing on what makes a true leader. SmartBrief recently ran a summary of key points from one such speech. I call these points a true GAP analysis of leadership, which I paraphrase as:

Goals: “When the followers know what the goals are, everyone understands the importance of their own role for the common purpose.”

Appreciation: “Make sure that those under your command understand that you appreciate what they are doing.”

Purpose: “People want to know that you are serving a greater purpose than just your own.”

Conduct your own GAP analysis – do your people know the goal? Do you appreciate and recognize them for contributions and actions that help you reach the goal? Do they know the greater purpose of their daily tasks?

If you could pick anyone in history, who would be on your list of leadership mentors?

A Real Holiday Present: Serve the Public Good

Recognize This: Companies are sitting on record profits, but with no change in sight for their people practices.

How flush are you feeling right about now? If you celebrate Christmas, your wallet is likely feeling quite a bit lighter or you’re waiting in dread for the Christmas present bill to come due in the new year. The harsh reality of the last two years feels much the same for many of us, but not for the corporations.

CBS MoneyWatch reported companies have experienced seven consecutive quarters of profit growth and, in the third quarter of 2010, made more money than in the 60 years the Commerce Department has been tracking this data.

Are you feeling the benefit of any of that profit? I doubt. The article goes on to report companies are sitting on the cash, more concerned with “Increasing shareholder value than the public good.”

Many would argue companies are simply following the mandate of why they exist – to make money for shareholders. I disagree. I believe companies exist to do both. It’s only logical. You can’t make money without the brains and brawn behind what you’re selling. It follows that if you look out for the “public good” by doing right by your employees, by reinvesting in them, by restoring pay levels and staff cut during the recession, by showing your employees how much you appreciate them.

Give employees a real gift this holiday season. Return to reason in your people practices. Show your employees you know they can’t keep up this pace forever. Express your appreciation for their herculean efforts and reward them appropriately.

Image credit: CNNMoney.

Knowing the Path to Your Destination * How to Communicate Your Strategic Plan

How’s your 2011 planning going? What changes do you see on the horizon for your organization’s strategic plan?

There’s been a great deal of fluctuation in strategic plans during the last three years as companies have reacted to economic pressures in numerous ways, from drastic cutting of employees (how do we get the work done without them?) to evaluating relevance in a rapidly changing market (do people even want to buy my product any more?)

The more critical questions, however, are:

1. Do your employees know how the strategic objectives have changed?
2. Do they know how to adjust their work to align with the new objectives?


A recent SmartBrief on Leadership poll found that, for 40% of employees, the answer to both questions is “No.”

These findings are worse than the results of an earlier Mercer study I wrote about before that found:

“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.”

The comments of Mike Figliuolo, managing director of ThoughtLeaders, in reaction to the SmartBrief poll explain the hazards of not getting everyone focused on the same plan:

“Without a defined destination, you’re simply making widgets, and you may wake up one day to find the widget is obsolete because the strategic landscape around you changed while you were hunched over the widget machine.”

So how do you solve this? Don’t forget these two critical steps:

1) Inform people of the destination. Make sure all employees know what the end goal is.

2) Inform people of the path. Knowing the destination is useless unless you know how to get there.

One of the most effective methods for repeatedly communicating both the destination and the path to all employees is through strategic employee recognition. In this kind of employee recognition program, you frequently and in a timely way acknowledge and express appreciation to employees when they contribute to achieving the strategic objective while demonstrating the company values. If you do this consistently, employees come to understand how they, personally, are contributing to the strategic plan, and desire to continue to do so.

Do you understand both the destination and the path? Are you helping those who work for you to understand as well? How?

Keeping What’s Important * Employee Recognition

It’s always good to be validated by the research. Thankfully, we did not see companies we work with contracting their recognition efforts in the recession. Most saw the importance of continuing employee recognition programs as critical to their ability to maintain employee morale and foster engagement in frightening and trying times.

Recent research from Accenture, “The High-Performance Workforce Study 2010,” found the same to be true for many organizations:

“Incentive, training and other related workforce programs at US and international companies held steady or were increase the past 12 months. … In the US, 39% made no changes to their recognition programs, while 28% increased them. For incentive compensation, the figures were 45% and 23% respectively. … International companies showed even more support for retaining or growing recognition, incentive and training programs, with just 15% and 19% cutting recognition and incentive compensation programs, while about 75% maintained or grew them.”

This report further supports Globoforce research and Towers Watson/WorldatWork research that companies on a global basis did not reduce or eliminate recognition and incentives programs on as drastic a scale as anticipated. This should help employers as they work to rebuild staff to pre-recession levels but may have to overcome a work atmosphere tainted by cost-cutting actions.

Globally, just over half of employers feel they are prepared to adapt and manage change in economic uncertainty. Strategic recognition is a powerful tool for change management, especially as a communications vehicle for changing strategic objectives and how employees can contribute to those objectives in their daily work.