5 Ways to Boost Employee Engagement

Comm update_13 August

If employees have a sense of purpose, feel valued and are able to trust an organisation and its leaders, the chances are they will be passionate about what they do for a living. In order to create such a working environment, boards must think carefully about communicating a message which is universal and yet resonates with a diverse range of individuals who possess different motivations.

While no company is ever going to get it completely right, a high price will be paid if leadership teams fail to understand why it’s vital to take engagement seriously. Criticaleye spoke to a variety of Members to gauge their views on how to forge an approach which is strongly tethered to business performance. 

1) Give Employees a Voice

Empowering employees so they can actually make a difference will help them feel more connected with the organisation. Therese Procter, Personnel Director at Tesco Bank, says she encourages people at all levels to collaborate and push themselves: “I might get our graduates involved in having a focus group with me, so they put forward fresh ideas on how we might do things in a different way. Or, for instance, when I was in Newcastle recently, I had the opportunity to work with some of our frontline colleagues.

“They spent an entire morning teaching me what it is that they’ve been doing in order to make the operation leaner and more agile. They’re coming up with the ideas that are making the business better for customers, rather than those ideas coming from executives, and I want to continue to build an environment where that can happen.”

It’s about taking the time to ensure others are able to share their opinions. Clodagh Murphy, Managing Director of technology services provider Eclipse Internet, says: “I run informal sessions once a month where we select colleagues randomly to have lunch with me so we can chat…  [and] I just ask: ‘How is it going?’ It allows me to gauge how engaged the employees are.”

2) Get Your Middle Management Onside

Don’t underestimate how much middle management dictates the mood and tempo of a business. Mike Tye, CEO of Spirit Pub Company, says: “If I can’t engage the senior team with what we are trying to achieve, and if that doesn’t eventually filter through to our general managers and our units, then we’ve lost the war. The critical thing is that general managers have got to talk to their teams and say: ‘This is what we’re about,’ and they’ve got to do it regularly.”

Peter Cheese, Chief Executive of The Chartered Institute of Personnel and Development (CIPD), stresses the importance of good line management: “It’s going beyond the typical dimension which would be: ‘Do I think my manager is competent?’ into spaces such as: ‘Do I think they have integrity? Are they consistent in actions and behaviours? Are they what some people might call benevolent? Do they recognise me as an individual and reward, encourage and support me?’”

3) Push for High Performance

While no-one would doubt the usefulness of surveys and scorecards and crunching the data around what employees are thinking, there is a limit as to how insightful these tools can be. 

Peter argues that some of the claims made around measuring employee engagement are spurious: “You can read reports that suggest if you increase your engagement score by X per cent, you’ll increase your return to shareholders by Y per cent. Well, I don’t think that basis of engagement is sufficiently sound. More importantly, you cannot make calls on those links as there are too many other intervening variables.”

According to Colin Hatfield, Founder of communications specialist Visible Leaders, questionable assumptions are being made about what engagement means for an organisation. “People are confused,” he comments. “They say: ‘Well, if we build engagement we will get high performance.’ But I think there is a danger that you can build engagement and think that it’s going to lead to high performance but actually what you end up with is a highly engaged workforce and performance levels may not shift.”

Colin gives the example of an organisation with exceptionally high engagement scores where the employees were seemingly happy, receiving great benefits and remuneration packages, but a significant change was required for the company to get back on track. “The point is that engagement doesn’t automatically deliver performance, although to deliver performance you need engagement,” he says.

Leaders have to establish clear goals so that people are aligned with what’s delivering value for the business. “The danger is that with all of the talk about the importance of engagement, everybody’s eye has been taken off the ball about performance,” adds Colin. “What we need is a more balanced view between managing the two dynamics.”

4) Keep Communicating

If a leader is going to be listened to, he/she will need to be consistent in their behaviour otherwise employees will switch off. In fact, many employees will be looking keenly for any sign of contradiction or lack of authenticity.

Clodagh says: “If you’re trying to manufacture a message because you think you should be saying something, that’s when you become unstuck. Whereas if the message you’re getting out is actually what you’re doing, it’s what you’re living and breathing every day, then it’s simply the way things are. You’ve then got to find the different ways of ensuring everybody is on that journey.”

It’s about tailoring the message and finding ways to inspire others. Kevin Murray, Chairman of brand building and CSR consultancy The Good Relations Group, suggests that a CEO’s vision needs to flow through the entire company, right down to the people on the frontline so they understand how they are contributing to the corporate culture. “To engage your employees you need to be inspiring, a good listener and recognise the impact you have on your staff,” he says.

Mark Jones, Managing Director of hospitality and business education centre Wyboston Lakes, says: “A leader has to define success and work towards achieving it. It’s all about people, especially in a service delivery business. I take it as a personal crusade to assist the team with their levels of engagement and understanding.”

For this to hit home, consistent and regular communication will help people to have faith in the leadership team. Peter says: “If I, as an individual, trust first and foremost my line manager, but secondly the wider leadership of the organisation, then I’m more likely to go with it and I’ll have an underlying base of engagement that, provided I can maintain that trust, should broadly be sustained even in difficult times.”

Not everybody is going to want to come aboard. Nick Barton, CEO of property management company CityWest Homes, says that it’s crucial to have a plan to address the disengaged people within an organisation: “It is this group that will constantly hold back even the most engaged workforces so they must be dealt with and quickly. This group have been described as ‘mood hoovers’ – those that feed on failure and wallow in a nihilistic trough. They exist in every organisation.”

5) It’s Not All About Money

A healthy remuneration package matters, but pay alone won’t necessarily make an employee loyal or high performing.

Mike says: “People need to feel that they’re being paid fairly. The thing that is most likely to upset or disengage people is unfairness or inconsistency, but most people join a business knowing what their salary is.

“I always describe remuneration as almost a bit of a sugar rush – it’s great when it happens but unless everything else is great as well, the benefit of that sugar rush will soon wear off. It’s not normally the key reason for people to stay in an organisation, rather it’s the culture, values and leadership engagement that are the big drivers.”

Clodagh comments: “If [pay] is fair and equitable, it doesn’t motivate at all. If it is unfair and inequitable, it demotivates, usually. So I think in Maslow’s hierarchy of needs, it’s right down the bottom [in terms of driving engagement].”

***

There’s no silver bullet when it comes to aligning employees. Rather, it’s a continuous process of two-way communication around the journey the business is on. It involves a mixture of repeating messages, finding new approaches to inspire others and behaving with integrity.

“Engagement is not around any one single thing,” says Colin. “You’ve got to be aware of all of the potential drivers of engagement as it really is different strokes for different folks. These need to be managed in an integrated way and you have to be alert to the fact that people within a single team are going to be engaged, motivated and inspired by different things.”

I hope to see you soon.

Matthew

www.twitter.com/criticaleyeuk

Advertisements

5 Ways to Cement a Leader’s Legacy

Comm update_4 Febr1

The decisions made by CEOs will ultimately define the legacy they leave behind. Richard Branson is the inspired entrepreneur. Steve Jobs the genius who changed our relationship with technology, while Jack Welch is famed for his no-nonsense management style. So what plans should a business leader be putting in place to ensure their long-term reputation is synonymous with a company’s success?

Firstly, it’s a case of accepting that the average CEO doesn’t have the time in charge afforded to the likes of Branson, Jobs and Welch. Kai Peters, CEO of Ashridge Business School and a Criticaleye Thought Leader, says: “A lot of CEOs aren’t in the job long enough to leave much of a legacy. Tenure is less than five years on average and declining… and research indicates that to make a significant change in an organisation it takes a little bit longer than that.”

So, from day one, you’ll be under pressure, balancing short-term priorities with long-term strategic goals. Criticaleye spoke to a range of business leaders to find out the five steps that need to be taken in order to make the right kind of impression as a CEO.

1)  Know Your Purpose

A leader who fails to articulate a compelling vision for a business will not last long. Andrew Heath, President of Energy at engine maker Rolls-Royce, says: “It’s about focusing on what really matters and finding that in the business that you’re running. You’ve got a responsibility to be the architect for the future of the business… [so] it’s a matter of focusing on that sense of higher purpose, the direction you’re trying to take it in and it’s about getting strategic coherence across the organisation.”

Colin Hatfield, Senior Partner and Founder of Visible Leaders, a consultancy that specialises in leadership communication, says: “I always get a little worried when I hear leaders saying that their ‘going in’ position is to build a legacy. I think they should start by saying: ‘I’ve got to do what I think is the right thing for this organisation’… Leadership generally is about making change happen and the CEO is the epitome of that.”

2) Be Realistic

Only so much can be achieved by a CEO at any given moment in time, particularly in the early days. Matthew Wright, Chief Executive of Southern Water, comments: “Whether it’s a cultural legacy; a [track record] of under-spending on asset maintenance or whatever, there is often a period where you’re trying to dig yourself out from under a legacy that isn’t entirely positive.”

Howard Kerr, Chief Executive at standards and training provider BSI, says: “As an incoming CEO, you’re always very conscious of what your predecessor leaves you. When I leave there will be something that my successor will have to work on that I haven’t necessarily addressed effectively. You’ve got to be very honest about what… you are leaving behind and recognise that no CEO or organisation is perfect.”

3) Get the Team Behind You

Teams will perform to a much higher level if they believe in what they’re doing. Peter Horrocks, Director of BBC Global News and World Service, comments: “The key is to convince people that the changes you want to make during your period in charge are not contrary to the central values of the organisation, but that they will help to sustain it and to make it more successful in the future… You can get into a situation where people see that someone is changing things in such a way or to such an extent that they react against it.”

Matthew comments: “We go on the road, meet all our employees and talk about how they can start to influence the direction of the company… [we’re] very clear about why we’re here, what our vision and mission are and what roles people have within that so that they can connect with the organisation and its objectives.”

4) Cast a Shadow

“If they don’t notice when you arrive, they’re unlikely to notice when you leave,” says Lucy Dimes, Non-executive Director at textile services company Berendsen and former UK & Ireland CEO of telecoms concern Alcatel-Lucent.

Andrew comments: “I try and put my personal mark on things, so I do a weekly blog in which I talk about the key strategic themes and priorities, such as health and safety, and the values we have around ethics and compliance. I talk about what I see is going well and where I see things not going so well, reinforcing positive behaviour and recognising individuals who portray the right values and who are being highly supportive of executing the strategy.”

For Lucy, a leader must be capable of engaging. “Did people remember it as a good era, a time when things changed and when the leader touched their lives rather than just operating aloofly over the organisation?’

“The leader sets a tone and casts a long shadow on the organisation, so you’ve got to make a personal impact. At the same time you want to create things that everybody agrees are right for the organisation and not just the way that [you] do things, so that when you leave they are seen as changes that everybody has played a part in creating.”

5) Build Long-Term Value

Sam Ferguson, Group CEO and President of EDM, an information management provider, says: “There is a short-termism in business… which means, instead of investing to create the right business for the future, many people end up maximising profits now so that the chief exec can get his bonus… I think there’s a bit of that in the UK that needs to be rectified, so that [CEOs] are more focused on building businesses with the long-term future in mind.”

When it comes to creating value, a CEO will make a lasting impression by getting good financial results and by leaving behind a capable team. Kai comments: “You should be investing for the long term. You bring talent in and you make sure you facilitate the capacity for people to talk to each other without you having to be the omniscient one in the middle. Between bringing in some new faces and getting people to talk to each other, hopefully you generate some intellectual property.”

***

In the final analysis, a CEO should realise that their role requires them to be a steward, serving the company to the best of their ability before moving on. “No one individual is bigger than any organisation, whether they’re the chief executive or in any other position,” says Howard. “The company’s interests always trump those of the CEO.”

I hope to see you soon.

Matthew

www.twitter.com/criticaleyeuk

 

3 Ways to Engage Your Employees

Comm update Faces - 24 september

In many respects, discussing employee engagement can be to state the blindingly obvious. After all, CEOs shouldn’t really have to be told that they need to talk to their staff and be able to listen. Perhaps this continues to be such a hot topic because too many leaders allowed themselves to become estranged from their employees and now it’s a case of getting back to basics.

That means interacting with people and getting everyone to believe in the business. After all, a fully engaged and motivated workforce will be a powerful agent for any organisation seeking to change, grow and deliver success. Criticaleye finds out how leaders from a range of organisations are making it happen.

1. Test the Water

The first step is to ask employees for feedback. Most organisations still find the annual employee engagement survey an important barometer here.

Maria da Cunha, Director of People, Legal and Government Affairs at British Airways, says: “While you shouldn’t get too hung up on measurement, I do think it’s useful to have some way of checking how you’re doing. In a large organisation like ours, which has many sub cultures, it’s quite important to get some sense of whether you can prove you are going in the right direction.”

Just keep it simple and understand what you want to try and achieve. Tea Colaianni, Global HR Director at Merlin Entertainments Group, comments: “In our employee engagement survey we ask just one key question: ‘Why do you enjoy working here?’… while it turns out that 95 per cent of our employees enjoy working for Merlin, we try to spend a lot of time working out why there are 5 per cent who aren’t engaged, and the goal is to try and turn them around and make them ambassadors for the brand.”

2. Be Visible

Obviously, CEOs need to get out and talk to staff. “I do a lot of floor walking,” says Martin Balaam, CEO at IT services concern Jigsaw24. “It’s important to be out there and visible, not just having forums and presentations… but to make sure you take time out to chat and reflect on things with your staff. You can often tell what the mood of the office is just by walking through it.”

It’s harder to get around when you’ve a globally dispersed workforce, but there’s still no substitute for face time. Jane Griffiths, Company Group Chairman for EMEA at Janssen, the pharmaceutical division of global healthcare organisation Johnson & Johnson, comments: “Two weeks ago I was in Russia and Poland; next month I will travel with my leadership team to Istanbul… it’s important to go and listen to what the situation is like in different markets and meet with people in different offices face to face. You’re trying to dig deeper into the organisation all the time to see who’s there and who needs more input into their development.”

The other key thing is for middle managers to be engaged and behaving like ambassadors of the decisions made at board level. Colin Hatfield, Senior Partner and Founder of Visible Leaders, a consultancy that specialises in leadership communication, says: “There’s often this great intent at the top of the organisation but it falls down in that layer below, at the local leadership level. Frankly, that is where engagement really happens because the point of this is to get teams engaged…

“If those leading teams within an organisation are not engaging people, then it’s not going to happen. So the emphasis needs to be on helping that layer of leadership do the right things to drive engagement forward.”

It’s a point taken up by Paul Isaac, who until recently led HR for the industrial business of DHL Supply Chain in the UK: “[Engagement] is about the visibility of more senior managers, actually visiting sites, talking to individuals, getting to understand first-hand how those individuals are engaged with the business and the site where they operate.”

3. Walk the Talk

To get any sort of lasting engagement, employees will want to see that you’re serious about taking their views on board. That means being honest, says Ella Bennett, Human Resources Director for the UK and Ireland division of global IT systems and services provider Fujitsu: “It won’t all be good news and openly recognising that helps build leadership credibility. We use…online discussions where people can raise issues in real-time, suggest solutions and get immediate responses from senior players in the business… We make sure the executive team is always accessible.”

Maria comments: “Feedback can get lost in the corporate machine, so people might feel nobody’s listening or that they aren’t contributing, when actually they may be making a very important contribution. So having a feedback loop with clear, two-way communication is the most important thing that can be done and often one of the hardest to get right in a large organisation.”

Such was the case for Nick Allen, former VP of Strategy and Portfolio at oil and gas giant Shell, who was tasked with the challenge of understanding how the organisation could better retain female middle managers. “It required listening to why they were leaving and being willing to take on board the things you may not have thought about, or that may be more difficult to execute than you would like,” he recalls. “I ran virtual focus groups using… video conferencing with six female managers and it was genuine dialogue, so I ended up getting them to chair and facilitate the discussions… [because] you really want to get to the point where the solutions come from them.”

***

What engagement really boils down to is good old-fashioned communication. That means listening to employees, acknowledging their views and making them feel that they’re opinions count for something.

The mistake is to think that employee engagement can be created in bitesize programmes or one-off team building initiatives. As Colin says, “Organisations with a truly engaged workforce simply see it as part of everyone’s day job.”

I hope to see you soon.

Matthew

https://twitter.com/criticaleyeuk

Leading Through Uncertain Times

The two biggest pressures for CEOs today revolve around international expansion and recruiting the right talent. Invariably, the two are linked, as it’s a case of finding and engaging people who have the breadth of skills and knowledge to help unlock the potential of new markets.

Ian Edmondson, Chairman and Managing Director of Dunlop Aircraft Tyres, sees opportunities across Asia, Russia, Brazil and Africa. “The concern is how to find, motivate and retain good staff as one of the challenges is to successfully recruit foreign nationals for key leadership roles and to restructure the way the company operates as it transforms from a regional to a global business.”

It means taking calculated risks. Mark Hunter, CEO of claims and risk management business Airclaims, says: “Growth overseas is our priority right now; China is supposedly building 90 new airports in the next 10 years, but there is always a number of political factors and relationship differences [you have to accept], such as an initial lack of local knowledge and the need to maintain a justified presence through employing local people. So if you are going to make a sizeable investment and an immediate impact, it is crucial you get that timing right.”

Brain drain

Massive growth brings with it new challenges. Bryan Marcus, South America Director at financial services provider VW Credit Canada, explains: “Upgrading IT solutions and securing the best talent are prerequisites for any successful change or transformation programme. But Brazil’s growth has led to significant shortages of IT professionals, increasing business change and product development costs. It’s enough to put some projects on hold and it has diminished our flexibility – our key differentiator compared to the very large banks in Brazil.”

As a result, good communication is vitally important: “Project milestones can be delayed and one of my major challenges is managing the expectations of key stakeholders, shareholders and headquarters, who demand high performance in the BRICs, especially given the economic challenges in Western markets.”

Indeed, domestically, the picture is equally complex. Adrian Gunn, CEO of recruitment agency, Matchtech, explains: “We’re seeing a two-tier economy for the UK. We have growth opportunities as the product demand from overseas is creating demand for staff that we are fulfilling.

“However, there are two million people unemployed here, but what is available in the UK and what is required actually points to a bizarre skills shortage and looking at ways to overcome that is time-consuming.”

According to Adrian, there are huge issues around training that have to be addressed. “What worries me is that the organisations that are growing rapidly from global demand will put their investment elsewhere. As a leader I can target and pursue opportunities, but a lot of it is out of my control.”

The race is on for businesses to up-skill and adapt swiftly. For example, Andy Hague, UK CEO of HR outsourcing provider, Croner, has had to churn “maybe 25 per cent of the workforce” in order to bring in sales people who can thrive through selling online, as opposed to just via the traditional channels of phone and print.

David Wither, CEO of the AIM-listed hi-tech manufacturer Sarantel, says that “the idea of having a knowledge-based economy is absolutely vacuous and unbelievably arrogant”. He explains: “Our suppliers being overseas stretches the supply chain, and once those manufacturing bases have gone overseas, they’re gone.

“You need to bring manufacturing back [to the UK because] the way that technology develops is by learning through making things. There is an unbelievably arrogant Western feeling that we can let other people do ‘dirty manufacturing stuff’ and we’ll be able to come up with the best ideas, even though they are the ones with the latest manufacturing technology.”

The money pit

While ‘bootstrapping’ may be nothing new for companies, the ongoing austerity is certainly testing the resourcefulness of CEOs, not least those in the public sector. Jane Furniss, CEO of the Independent Police Complaints Commission, says: “The outlook for the public sector is a continuingly tough need to make savings, reduce expenditure and make redundancies, including closing offices and supporting staff to work from home or elsewhere. It presents a huge change to our way of working.

“How do you demonstrate that you value your staff as a leader and that you want to respond to external customer feedback about your service? When there’s no more waste to be found, where do you go next? It’s going to get harder to become more efficient just through cuts.”

The environment for listed companies may not be quite as savage as for organisations in the public sector, but there’s no question that financial backing and support remains hard to come by. Stephen Mohan, MD of Operational Services for financial trading platform provider, Cofunds, identifies the main challenges for a CEO at present as “the dire economy, major costs of change to cope with a tsunami of new and sometimes conflicting regulation, and the demand for increased capital”.

In terms of the latter, David suggests that “juggling resource constraints is without a doubt my biggest challenge as a leader – the biggest hurdle as a small technology company is access to capital”. He laments: “One of my deep frustrations is the lack of technology savvy investors. The UK has some of the best scientists and engineers on the planet but there are no Apples or Microsofts here because the US investment community is willing to make much bigger bets.”

Loud and clear

The ability to handle pressure is one thing, but the CEOs who really stand out have to go beyond that, especially when looking to implement a new strategy. Mark says: “Communication is on the agenda right now as employee engagement is absolutely critical. We went through a sale last year, which will distract any business; people have gone from being on a bit of a high to being uncertain about the future and it is critical they understand where we are going.”

It’s a skill that demands greater investment of leaders’ time. Adrian comments: “Communication with staff is taking a lot of my schedule now – internal comms is as important, if not more important, than external comms as unless people have faith in where the business is going, they will leave.

“You have to adapt your styles though: I have to give my recruitment consultants a more simplistic and clear message than the one for lobbying up to industry bodies or speaking to investors, which is much more reliant on statistics. If I communicated in the same way I would lose both audiences.”

These issues are all connected, of course. Andy Dunkley, CEO of Red Diamond Holdings, owner of the Lee Cooper clothing brand, notes: “The trouble I have is communication over our 90 countries, distilling and explaining the essence of my vision and ensuring that people everywhere can understand it. These issues aren’t new but everything comes at you much quicker today; global branding goes online and around the world instantly and if you aren’t very careful, it quickly turns into firefighting.”

Although most leaders are equipped to deal with the various demands of customers, stakeholders and staff alike, support is becoming ever more necessary. Top talent is vital, not least in the form of a strong non-executive team providing essential oversight and clarity amid the din of an online and always-on business.

Boards must work together to provide precious space for leaders to pull back, assess and ultimately decide how to formulate the best strategy when operating on an international stage.

Please get in touch if you have any comments about the issues raised here.

I hope to see you soon.

Matthew

www.twitter.com/criticaleyeuk

Who Drives Employee Engagement?

It sounds simple enough: employee engagement is achieved through listening and communicating with clarity and authenticity. Strange then that many organisations fall short when trying to achieve this and seriously struggle with an almost institutionalised disconnect between employees and senior management.

Cutting through the politics of a business can be one of the hardest challenges, particularly when seeking to drive change. Dan Londero, Chief Sales Officer at Reed Exhibitions, says: “My personal approach when leading change initiatives is to personally meet with as many staff as I possibly can as a point of priority. The staff in a business know what is going on and often can tell you what isn’t right. By involving our staff and genuinely listening, I find that they later engage in the steps that need to follow.”

Instead of this, executives fall into the trap of taking on a ‘thou shalt’ style of leadership. Gwen Ventris, the former COO of AEA Technology, says: “Executive teams can go wrong when the decision-making process becomes too separated from employee expectations and belief systems. It creates a trust gap between what is said and what is actually done; employees can become alienated if they conclude that management is making decisions in its own interests without taking account of the views of people within the business.”

Another common mistake is to repeat clichés about ‘brave new directions’ and priorities for the business. Rudi Kindts, a Criticaleye Associate and former HR Director for British American Tobacco, explains: “Many times I hear leaders saying that ‘we are in new territory and we need a major mind shift,’ whilst at the same time pushing forward with the same old and failing leadership practices.”

This is where the question of ‘authenticity’ takes on meaning. Employees want to see consistency, whereby words are followed by actions. David Plumb, General Manager of Enterprise for O2, says: “It’s about good line managers taking the time to understand what’s important and what motivates each individual employee, then thinking about creating that ‘win-win’ where the employee gets that motivation and the business gets its delivery, creating a virtuous circle. That’s why employee engagement is so powerful.”

Crowd sourcing

Unless due care has been taken to engage effectively, cracks within a company culture can be brutally exposed when change needs to be implemented. Gary Browning, Chief Executive of HR consultancy Penna, reveals that when he took the hotseat in 2005 a number of reforms were called for which required a rounded approach. “[We] invested heavily in engagement by building a strong internal communications strategy, including regular roadshows, getting around the regional offices, conducting monthly calls with managers and giving key messages on a one-to-one basis,” he says.

The ‘key messages’ have to be integrated into the organisation. Gwen states that “it is critical… for senior management to understand and effectively [oversee] their management teams to ensure they are active in their support and act and communicate with their people accordingly”.

Any perceived cynicism or discontent among those expected to endorse changes will spell disaster. “It’s very important people get the message from their line manager, not just from the chief executive, so we put in place channels for that to happen,” says Gary, adding that when introducing changes the management were put through a programme to enhance their communication and basic coaching skills.

Although there are going to be times when a consultative approach won’t be appropriate, boards should be aware of how information is being disseminated through the organisation and put measures in place which allow for feedback. It comes back to the trinity of strategy, vision and culture and taking the time to figure out what this means in practice for a business and the people who work there.

Matthew Dearden, CEO of advertising company Clear Channel Outdoor, says: “To me, internal communication is critical as tone and culture come from the top and people buy into that. If little time is spent on working out what you want to stand for as a company and the kind of behaviour you wish to see from your employees, it can be enormously damaging… With a clear, consistent voice using the right channels, internal communication can be an engine for any company driving commitment, change and individual behaviour.”

According to Nick Helsby, Managing Director of executive search firm Watson Helsby, the value to be gained from well-considered and structured interaction with employees needs to be a higher priority for boards. He argues that “it is time for a fundamental rethink of internal comms, its value propositions, what it should deliver and how it is organised and resourced”.

One of the reasons for this may be around ownership and responsibility for who really drives the engagement agenda. Laura Haynes, Chairman of brand and communications agency Appetite, says: “Executive teams go wrong by missing the opportunity of co-opting and engaging at an early stage and throughout the process, putting a distance between the boardroom and shop floor where it need not exist.”

For some leaders, it may be time to dispense with a traditional, overly hierarchical view of a business if they do want to achieve the desired strategic results. Martin Balaam, CEO of IT company Jigsaw 24, says: “There are a disproportionate amount of organisations where energy is spent communicating downwards compared to listening to what the team on the ground, the one nearest the customers, have to say.

“Executive teams would do well to think about what they are there to do – are they really the ones who know what is going on at the coal face? Do they really understand the feelings of the organisation – if they started to think of themselves as being there to listen and to react to the feedback coming from customers, employees and suppliers, then they would be starting to really care about the customer experience.”

Some may dismiss this as touchy/feely but those who underestimate employee engagement do so at their peril, especially when major changes have to be made and suddenly senior management are calling out for all employees to pull in the same direction.

If you haven’t earned the necessary trust and respect, what level of commitment can you really expect?

Please get in touch if you have any comments about the issues raised here.

I hope to see you soon.

Matthew

www.twitter.com/criticaleyeuk 

The Responsible Leader

Social unrest in the UK’s cities and hostility from the general public toward big business and financial institutions give added impetus to CEOs thinking beyond the bottom line. Although the leaders of commercial enterprises should and will be judged by year-end results, it’s no longer enough in itself as those at the helm must have the imagination and desire to show how organisations can be run responsibly and be a force for good.

Phil Smith
, Vice President and Chief Executive, UK and Ireland, at technology company Cisco Systems, observes that business leaders are compelled to engage in wider issues. “To me, it’s just incredibly obvious,” he says. “It would almost be unimaginable in my eyes that you wouldn’t do this. It’s like the argument about whether leaders should focus on and encourage diversity – it’s as if the question itself doesn’t make sense: of course you should. What’s the reason for not being diverse?”

Organisations will be viewed and judged in a broader context. Ian Wright, Corporate Relations Director for consumer goods company Diageo, says: “Business and the communities it serves are inextricably linked. Many of today’s consumers want to make a bigger judgement on the business behind the products they are buying: they are looking closely at values as well as value.”

The best CEOs acknowledge this fact. Chip Pitts, a Criticaleye Thought Leader and a Lecturer in Law at Stanford Law School and Oxford University, says: “There’s a new recognition of an old truth that many forgot for a while: businesses are and always have been part of society, dependent upon the same natural and social systems… that support businesspeople in their other roles, for example as consumers, citizens, children and parents.”

For Paul Polman, the CEO of consumer goods company Unilever, some organisations continue to be led astray by the myopia of shareholders: “To drag the world back to sanity, we need to know why we are here and the answer is: for consumers, not shareholders. If we are in sync with consumer needs and the environment in which we operate, and take responsibility for society as well as for our employees, then the shareholder will also be rewarded.

“Too many people think in terms of trade-offs: if you do something which is good for you, then it must be bad for someone else. That’s not right and it comes from old thinking about the way the world works and what business is for: Milton Friedman’s optimisation of short-term profits. We have to snap out of that old thinking and move to a new model.”

Saying the right thing 

The Corporate Social Responsibility (CSR) agenda may be seen as important, but there continues to be an abundance of spin and posturing around putting ideas into practice in the corporate world. Neil Braithwaite, until recently the Managing Director of Specialist Retail at the Co-operative Group, notes that “too many business leaders only pay lip service to CSR, seeing it as a box-ticking compliance issue rather than potentially key to the long-term sustainability of their organisations and the brands they are custodians of”.

Chip
 remarks that a lack of authenticity or outright deception on such issues is extremely risky, especially given the growing sophistication of communication technologies and market monitors, ranging from institutional investors to non-governmental organisations and formal auditing and verification bodies, to informal social networks, lobbying groups and watchdogs.

He explains: “In such an environment, merely paying lip service is simply a dumb strategy, both because there are increased chances of getting caught and because such counterproductive, empty promises actually heighten rather than decrease social, reputational, operational, financial and legal risks. In addition to genuine concern for the future of the planet and its people, that’s another key reason CSR has become so mainstream in recent years: businesses have realised that the best way to appear good is to be good.”

In practice, this entails integrating a CSR agenda into the core principles of an organisation. It means examining the context in which the company operates, whether its activities and supply chains may cause environmental harm or impact negatively on local communities.

“If you’re doing it for the right reasons, then you’re doing it whatever happens,” says Phil. “Historically, you’d see companies engaging in philanthropy, whereby they gave away some money and then, when things got tough, they thought, well, we can’t afford to do that this year.”

However, if practices are embedded into an organisation, then they ought to continue whether a business is in a phase of expansion or contraction. “It’s about a much deeper involvement in the community and society as well as doing things which are beneficial to employees,” adds Phil.

In other words, it’s sustainable. Matthew Dearden, the UK CEO of advertising concern Clear Channel Outdoor, comments: “If you’re using the phrase of ‘doing the right thing’, it’s about how you treat individuals – I realise a lot of people wouldn’t associate that with CSR. But it’s about going above and beyond what you’re required to do to actually be in a place where you are pleased to work.”

In addition to this, Matthew has pushed more traditional CSR programmes within the organisation, working with select charities and remaining environmentally aware. Like Phil, he believes that any social or green agenda has to be wired into the core of an organisation’s activities. “As a personal point of view, the way I interpret CSR is to do the right thing. I don’t think we’re here as a business to give big donations to lots of charities,” says Matthew.

“If our shareholders want to do that they can, but it’s not our job to do that on their behalf as it would be presumptuous of us to take money away from shareholders and give it to somebody else. It’s not about the size of the charitable cheque… but the way in which we do business which is fundamentally important.”

A dose of realism 

Caroline Taylor
, VP Marketing for technology and services company IBM, states that CEOs have to factor in a company’s goals in both the short- and long-term. “I don’t think business leaders have ever been truly successful unless they have a balance of economic, societal and environmental measures. We have started articulating this more in recent years, but I’m not wholly convinced it’s a radical shift or change.”

She argues that “the greater visibility your stakeholders have of you and your actions as a leader is another big spotlight, and therefore it is no longer enough to just deliver good financial results as a business leader – you have got to deliver them responsibly”.

Evidently, a business will be judged by its profits, but this has to be balanced with long-term needs which are often ensconced in a societal and environmental framework. “If you prosper in the short term at the expense of those other two elements then it’s not a sustainable business model or platform for success,” she says.

There are ample reasons to install a culture which promotes responsibility. Phil says that pushing a charity fundraising or socially motivated campaign is brilliant for the engagement of staff: “The motivational effect of that on employees is huge and you need to remember that you’re competing for talent nowadays.”

Whether its sustainable buildings, energy efficient vehicles, traditional fundraising or engaging the young in educational initiatives, leaders are getting better at seeing how a more responsible strategy equates to sound business. Chip says: “Around the world, demographic changes, urbanisation and increasingly successful emerging markets are among the many factors that counsel in favour of business leaders doing more to engage with younger people and champion CSR principles.”

A clear benefit of such actions is the loyalty it can generate both internally and externally. Clive Ansell, Group Managing Director – Technology, of public sector consultancy Tribal Group, says: “There’s a lot of sophisticated debate around this area, but I think it’s much simpler than that: Do you do enough so that the typical (not average) employee knows and feels good about what a company does, even in tough times, and will they speak up if challenged?

“If your company has scale in a locality, does the community know, respect and talk about what you do? And do your customers know enough about what you do to affect their buying behaviour? Those are the measures that count. Awards, media comment or anything else only count if they support those real-world impacts.”

There can also be an inspirational aspect to this for leaders of global organisations. Paul says: “This role is, frankly, very appealing to me as CEO as it is something I am personally very passionate about. I admit selfishly that what attracted me to the role was the ability to use a company of this size not only to do what is right for the company but also what is right for society.”

Overall, there is still a very long way to go, as can be gleaned from the cynicism toward the business community from the general public post the financial crisis. Martin Sutton, Group Head of Propriety at national lottery operator Camelot Group, argues that the economic hardships and cuts of the past 18 months show little sign of abating and this is leading to an apathy and resentment which CEOs should consider carefully, particularly when it comes to the mood of their own workforces. “For a CEO or a business leader, if you’re not thinking about your wider social responsibility and what you can do as a whole, I think it will be a very short-sighted strategy.”

The subject of CSR and responsibility can seem fluffy and strictly for public relations experts. But, as we’ve all seen with certain media organisations of late, a reputation can rapidly disintegrate when leaders become enamoured with their own power and forget who and what they represent.

That said, there’s no point in playing at this either as it can quickly backfire. “It has to be built on authenticity,” says Matthew. “If you’re doing it to look good, fine, you can do that but ultimately it’s shallow and I think you’ll get found out… You have to be serious about it. Happily, for me, there are very few things that aren’t a trade-off between doing the right thing and good business.”

Please get in touch if you have any comments about the issues raised here.

I hope to see you soon

Matthew

www.twitter.com/criticaleyeuk