By Stuart R. Levine
Chairman and CEO, Stuart Levine & Associates and EduLeader LLC
Published In, The Credit Union Times
According to the Gallup organization, only 35% of U.S. managers are engaged in their jobs. This shocking statistic infers that 65% are not engaged, or worse, actively disengaged. One of the primary roles of managers is to motivate and engage their employees. A disengaged manager who doesn’t care about their job or organization has a direct effect on the disengagement of their employees.
This cascade effect, as Gallup refers to it, has shown that managers who work for engaged leaders are 39% more likely to be engaged themselves, and their employees are 59% more likely to be engaged. How can disengaged employees add value to a company and drive profitability? These employees have higher absenteeism and turnover, and dangerous amounts of presenteeism, all of which creates a huge negative financial impact on an organization. Gallup estimates that this lack of management engagement can cost U.S. organizations a whopping $398 billion annually.
In his seminal article in the Harvard Business Review, “Putting the Service-Profit Chain to Work”, James Heskett and his colleagues support the argument that in order to increase market share and profitability, customers and front-line employees must be your top priority. By citing cases from Xerox, Southwest Airlines and Sears, they point out that employee satisfaction, through loyalty, value creation, and customer satisfaction, ultimately drives profitability and growth. The basis for their argument is that internal organizational quality, meaning how employees are treated, creates the employee satisfaction and loyalty that subsequently creates the increased profit margin.
So how can an organization succeed with apathetic managers and employees? Ultimately, it can’t. Engaged managers and employees are vital to an organization’s success. Not only are they more productive and more likely to provide higher levels of customer service, they are more likely to drive innovation, generate new customers, increase morale and attract new employees with similar positive qualities. So what can we do about the lack of engagement and stop the downward spiral? How do we engage managers and employees in tough economic times when they are consistently asked to do more with less and often feel their jobs are at stake.
Most management and leadership pundits agree, when times are tough, invest in your people. This may sound like reverse logic. When organizations hit tough economic times, we usually see tactics such as layoffs or the shut down of management education and leadership development programs. However, studies have shown that these tactics rarely work to bail a company out once they have hit the slippery slope of red ink, and a more worthwhile strategy is to actually invest in your people to enhance their skills and efficiency.
Similar to most organizational initiatives, engagement is driven from the top. Leaders must create a culture where employees feel valued, respected, and one that generates trust for both them and the organization. This must start with an internal communication plan that is part of an overall strategy to increase employee engagement.
Gallup points out that the three most important things leaders can do to drive engagement are:
To engage employees, you must have engaged managers who inspire and motivate employees. Good management, similar to good leadership, is a critical success factor in organizational success. But what makes a good manager? In 2006, Google’s analysis found that being a good coach, empowering the team, and expressing an interest in the team member’s success and personal well-being were the most important aspects that employees wanted in their manager.
Zeynep Ton, an adjunct associated profession from MIT’s Sloan School of Management, presented one of the best ideas at the 2015 Aspen Ideas Festival. Her data showed that companies providing a good living to their employees plus a sense of purpose and empowerment, can match or exceed the profitability of those that continually cut wages and benefits. These “human-centered operations strategies,” provided by companies like QuikTrip, an $11 billion company with 722 convenience stores in the mid-west, are the keys to lower turnover, high moral and better customer service. Companies that cross-train, create leaders that develop the skills to problem-solve and come to work engaged to make the best decisions for the company and innovate effectively.
The bottom line to increasing the bottom line is creating a culture of engagement through outstanding human resource practices and the creation of a work environment that motivates and inspires both managers and employees.