First, Break All the Rules
Page 4
The following chapters describe the actions taken by the world’s great managers.
But first, a case in point: What do all these discoveries mean for a specific company or a specific manager?
A Case in Point
“What do these discoveries mean for one particular company?”
In the winter of 1997 Gallup was asked by an extremely successful retailer to measure the strength of their work environment. They employed thirty-seven thousand people spread across three hundred stores — about one hundred employees per store. Each one of these stores was designed and built to provide the customer with a consistent shopping experience. The building, the layout, the product positioning, the colors, every detail was honed so that the store in Atlanta would have the same distinctive brand identity as the store in Phoenix.
We asked each employee the twelve questions — over 75 percent of all employees chose to participate for a total of twenty-eight thousand. We then looked at the scores for each store. The following table offers an example of what we found: two stores at opposite ends of the measuring stick. (We asked the questions on a 1-5 scale, where “1” equals strongly disagree and “5” equals strongly agree. The numbers in the columns are the percentage of employees who responded “5” to each question.)
Store A
% responding “5"
Store B
% responding “5"
Know what is expected of me
69
41
Materials and equipment
45
11
Do what I do best every day
55
19
Recognition last seven days
42
20
Supervisor/someone at work cares
51
17
Encourages development
50
18
Progress in last six months
48
22
My opinions count
36
9
Mission/purpose of company
40
16
Co-workers committed to quality
34
20
Best friend
33
10
Opportunity to learn and grow
44
24
These are startling differences. Whatever the company was trying to do for its employees from the center, at the store level, these initiatives were being communicated and implemented in radically different ways. For the employees, Store A must have offered a much more engaging work experience than Store B.
Look at the different levels of relationship, for example. In Store A, 51 percent of employees said they felt cared about as a person. In Store B, that number sank to 17 percent. Given the pace of change in today’s business world, one of the most valuable commodities a company can possess is the employees’ “benefit of the doubt.” If employees are willing to offer their company the benefit of the doubt, they will give every new initiative a fighting chance, no matter how sensitive or controversial it might be. Store A possesses this precious commodity. Here the employees will tolerate ambiguity, trusting that, as events play out, their manager will be there to support them. Store B doesn’t have that luxury. Lacking genuine bonds between manager and employee, any new initiative, no matter how well-intended, will be greeted with suspicion.
How about individual performance? In Store A, 55 percent of employees said that they had a chance to do what they do best every day. In Store B, only 19 percent responded “5.” What a difference that must make in terms of per person productivity, retention, and workers’ compensation claims.
Wherever you look, the differences leap out at you.
“Do your opinions count?” Store A, 36 percent. Store B? A quarter of that, 9 percent.
“Do you have a best friend at work?” Store A, 33 percent. Store B, only 10 percent.
Perhaps the most bizarre discrepancy can be found in the second question. In Store A, 45 percent of employees strongly agreed that they had the materials and equipment they needed to do their work right. In Store B, only 11 percent said “5.” The truly odd thing about this is that Store A and Store B had the same materials and equipment; yet the employees’ perception of them was utterly different. Everything, even the physical environment, was colored by the store manager.
This company didn’t have one culture. It had as many cultures as it did managers. No matter what the company’s intent, each store’s culture was a unique creation of the managers and supervisors in the field. Some cultures were fragile, bedeviled with mistrust and suspicion. Others were strong, able to attract and keep talented employees.
For this company’s leaders, the wide variation in results was actually very good news. Yes, looking only at the negative, it meant there was a limit to what they could control from the center. The challenge of building a strong all-company culture had suddenly turned into a challenge of multiplication.
On the brighter side, however, these results revealed that this company was blessed with some truly exemplary managers. These managers had built productive businesses by engaging the talents and passions of their people. In their quest to attract productive employees, this company could now stop hunting for the magical central fix. Instead they could find out what their newly highlighted cadre of brilliant managers was doing and then build their company culture around this blueprint. They could try to hire more like their best. They could take the ideas of their best and multiply them companywide. They could redesign training programs based upon the practices of their best. To build a stronger culture, this company wouldn’t have to borrow ideas from the likes of “best practice” companies like Disney, Southwest Airlines, or Ritz-Carlton. All they would have to do is learn from their own best.
“So what if they do learn from their best?” some might ask. “Do more 5’s on the twelve questions necessarily translate to higher levels of real performance? Does Store A actually outperform Store B on any of the more traditional performance measures like sales, profit, or retention?”
Of course, our general discoveries would say yes, workplaces where many employees can answer positively to the twelve questions will indeed be more productive workplaces. But this is too general. Like you, we wanted to know the specifics. So we asked the company to supply us with the raw performance data that they would normally use to measure the productivity of a store. We punched in these scores and then compared them with each store’s scores on the twelve questions. This is what we found:
Stores scoring in the top 25 percent on the employee opinion survey were, on average, 4.56 percent over their sales budget for the year, while those scoring in the bottom 25 percent were 0.84 percent below budget. In real numbers this is a difference of $104 million of sales per year between the two groups. If realized, this figure would represent a 2.6 percent increase in the company’s total sales.
Profit/loss comparisons told an even more dramatic story. The top 25 percent of stores on the survey ended the year almost 14 percent over their profit budget. Those stores in the bottom group missed their profit goals by a full 30 percent.
Employee turnover levels were
also vastly different. Each store in the top group retained, on average, twelve more employees per year than each store in the bottom group. Across both groups this means that the top 25 percent scoring stores on the survey retained one thousand more employees per year than the bottom group of stores. If you estimate that the wage of the average store employee is $18,000 and that the cost of finding, hiring, and training each new employee is 1.5 times his salary, then the total cost to the company for the different levels of retention between the two groups is $18,000 x 1.5 x 1,000 = $27,000,000. And that’s just the hard cost. The drain of experienced employees who have developed valuable relationships with their customers and their colleagues is harder to measure but is just as significant a loss.
These results are compelling. In this company the business units were measurably more productive where the employees answered positively to the twelve questions. Excellent front-line managers had engaged their employees and these engaged employees had provided the foundation for top performance.
Any measuring stick worth its salt not only tells you where you stand, it also helps you decide what to do next. So what can a manager, any manager, do to secure 5’s to these twelve questions and so engage his employees?
First you have to know where to start. Gallup’s research revealed that some questions were more powerful than others. This implies that you, the manager, should address these twelve questions in the right order. There is little point attacking the lesser questions if you have ignored the most powerful. In fact, as many managers discover to their detriment, addressing the twelve questions in the wrong order is both very tempting and actively dangerous.
We will show you why, and by way of contrast, we will describe where the world’s great managers start laying the foundations for a truly productive workplace.
Mountain Climbing
“Why is there an order to the twelve questions?”
To help us describe the order of these twelve questions, we ask you to picture, in your mind’s eye, a mountain. At first it is hard to make out its full shape and color, shifting from blue to gray to green as you approach. But now, standing at the base, you sense its presence. You know there is a climb ahead. You know the climb will vary, sometimes steep, sometimes gradual. You know there will be gullies to negotiate, terrain that will force you to descend before you can resume your climb. You know the dangers, too, the cold, the clouds, and the most pressing danger of all, your own fragile will. But then you think of the summit and how you will feel, so you start to climb.
You know this mountain. We all do. It is the psychological climb you make from the moment you take on a new role to the moment you feel fully engaged in that role. At the base of the mountain, perhaps you are joining a new company. Perhaps you have just been promoted to a new role within the same company. Either way you are at the start of a long climb.
At the summit of this mountain you are still in the same role — the mountain doesn’t represent a career climb — but you are loyal and productive in this role. You are the machinist who bothers to write down all the little hints and tips you have picked up so that you can present them as an informal manual to apprentice machinists just learning their craft. You are the grocery store clerk who tells the customer that the grapefruit are in aisle five but who then walks her to aisle five, explaining that the grapefruit are always stocked from the back to the front. “If you like your grapefruit really firm,” you say, “pick one from the front.” You are the manager who so loves your work that you get tears in your eyes when asked to describe how you helped so many of your people succeed.
Whatever your role, at the summit of this mountain you are good at what you do, you know the fundamental purpose of your work, and you are always looking for better ways to fulfill that mission. You are fully engaged.
How did you get there?
If a manager can answer this, he will know how to guide other employees. He will be able to help more and more individuals reach the summit. The more individuals he can help move up the mountain, one by one, the stronger the workplace. So how did you get there? How did you make the climb?
Put on your employee hat for a moment. This maybe a psychological mountain, but as with an actual mountain, you have to climb it in stages. Read in the right order, the twelve questions can tell you which stage is which and exactly what needs must be met before you can continue your climb up to the next stage.
Before we describe the stages on the climb, think back to the needs you had when you were first starting your current role. What did you want from the role? What needs were foremost in your mind at that time? Then, as time passed and you settled in, how did your needs change? And currently, what are your priorities? What do you need from your role today?
You may want to keep these thoughts in mind as we describe the stages on the climb.
Base Camp: “What do I get?”
When you first start a new role, your needs are pretty basic. You want to know what is going to be expected of you. How much are you going to earn? How long will your commute be? Will you have an office, a desk, even a phone? At this stage you are asking, “What do I get?” from this role.
Of the twelve, these two fundamental questions measure Base Camp:
1. Do I know what is expected of me at work?
2. Do I have the materials and equipment I need to do my work right?
Camp 1: “What do I give?”
You climb a little higher. Your perspective changes. You start asking different questions. You want to know whether you are any good at the job. Are you in a role where you can excel? Do other people think you are excelling? If not, what do they think about you? Will they help you? At this stage your questions center around “What do I give?” You are focused on your individual contribution and other people’s perceptions of it.
These four questions measure Camp 1:
3. At work, do I have the opportunity to do what I do best every day?
4. In the last seven days, have I received recognition or praise for doing good work?
5. Does my supervisor, or someone at work, seem to care about me as a person?
6. Is there someone at work who encourages my development?
Each of these questions helps you know not only if you feel you are doing well in the role (Q3), but also if other people value your individual performance (Q4), if they value you as a person (Q5), and if they are prepared to invest in your growth (Q6). These questions all address the issue of your individual self-esteem and worth. As we will see, if these questions remain unanswered, all of your yearnings to belong, to become part of a team, to learn and to innovate, will be undermined.
Camp 2: “Do I belong here?”
You keep climbing. By now you’ve asked some difficult questions, of yourself and of others, and the answers have, hopefully, given you strength. Your perspective widens. You look around and ask, “Do I belong here?” You may be extremely customer service oriented — is everyone else as customer driven as you? Or perhaps you define yourself by your creativity — are you surrounded by people who push the envelope, as you do? Whatever your basic value system happens to be, at this stage of the climb you really want to know if you fit.
These four questions measure Camp 2:
7. At work, do my opinions seem to count?
8. Does the mission/purpose of my company make me feel my job is important?
9. Are my co-workers committed to doing quality work?
10. Do I have a best friend at work?
Camp 3: “How can we all grow?”
This is the most advanced stage of the climb. At this stage you are impatient for everyone to improve, asking, “How can we all grow?” You want to make things better, to learn, to grow, to innovate. This stage tells us that only after you have climbed up and through the earlier three stages can you innovate effectively. Why? Because there is a difference between “
invention” and “innovation.” Invention is mere novelty — like most of us, you might have devised seventeen new ways of doing things a few weeks after starting in your new role. But these ideas didn’t carry any weight. By contrast, innovation is novelty that can be applied. And you can innovate, you can apply your new ideas, only if you are focused on the right expectations (Base Camp), if you have confidence in your own expertise (Camp 1), and if you are aware of how your new ideas will be accepted or rejected by the people around you (Camp 2). If you cannot answer positively to all these earlier questions, then you will find it almost impossible to apply all your new ideas.
These two questions measure Camp 3:
11. In the last six months, has someone at work talked to me about my progress?
12. This last year, have I had opportunities at work to learn and grow?
The Summit
If you can answer positively to all of these twelve questions, then you have reached the summit. Your focus is clear. You feel a recurring sense of achievement, as though the best of you is being called upon and the best of you responds every single day. You look around and see others who also seem to thrill to the challenge of their work. Buoyed by your mutual understanding and your shared purpose, you climbers look out and forward to the challenges marching over the horizon. It is not easy to remain at the summit for long, with the ground shifting beneath your feet and the strong winds buffeting you this way and that. But while you are there, it is quite a feeling.
If this is the psychological climb you made (or failed to make) from the moment you began your current role to the moment you felt fully engaged in this role, then where are you?