- THE GREAT RESIGNATION: According to some experts, up to 74% of the workforce is now looking for a new job. With pandemic induced dissatisfaction and disruption of working practises expediting career choices, companies are now facing significant challenges in employee turnover and engaging in a bidding war for talent.
- EMOTIONAL LEADERSHIP: At the heart of the problem lies the leadership. Leaders rise to positions of influence because they have strong emotional traits that enable them to make better decisions. These traits, however, also blindside them with cognitive biases that obscure and obfuscate the realities of employee feedback and issues.
- EMPLOYEE ENGAGEMENT: If we want to better engage employees, we need to look beyond gimmicks and financial rewards. Leaders have a significant impact on how their teams feel engaged in their work. We need to equip leadership with the skills and processes to both know how to communicate with their people and actively listen to them.
Introducing My Next Guest Paul Glover…
The XL Podcast focuses on conversations with Leaders about the key challenges we face in business, society and technology today.
My next guest on the Podcast informs us that the biggest challenge we face in business is Leadership itself. It’s us, the Leaders.
It’s the Leaders that employees look towards to make sense of the uncertainty that surrounds the workplace post-pandemic or to lead out of crisis. But, despite being instilled with this position of responsibility, our report card doesn’t make good reading.
Look at the data, Up to 74% of the workforce is looking for a new job. That number varies significantly by the engagement rate of the employee – with only 30% of “engaged” workers on the market.
The 51% who are not engaged do enough to “Show Up”. They do just enough to not get fired. They won’t give you discretionary effort that makes all the difference.
Disengagement means reduced profit, productivity, sales and tenure, which costs the global economy at least $7 trillion a year.
Gallup’s own State of the Global Workplace: 2021 Report shows, 80% of the world’s workers are already not engaged or actively disengaged. You can see this in black and white when you consider that today, the ratio of engaged to actively disengaged workers in the U.S. is 2.4-to-1. Think about that for your average team of 7, where 2 motivated employees are pulling the dead weight of the other 5.
Employee Engagement is a problem that has been growing under our radars for some time now. For years, they’ve hunkered down and sucked it up, but the pandemic has expedited the issue. Most people are disengaged at work. While this previously manifested as lower productivity, today it’s adopted a new dynamic – a trend called “The Great Resignation”.
Company Culture Myths like “Radical Transparency”
My Chicago based podcast guest, Paul Glover, sees this growing trend with his coaching clients. Business Leaders are reporting that employee engagement is not front and center of their daily operating discussions.
And while the prevailing wisdom may suggest a bandaid approach to covering up the issue, Paul says that the problem lies in a much more fundamental issue in how Leaders manage their people.
Quite often these challenges start with the leader’s own cognitive biases. They believe in the hype that obfuscates reality – take for example the “Radical Transparency” Netflix talks about as the core of their company culture. According to Paul it sounds great when presented on powerpoint slides but in reality, Netflix culture is just like any other industrial model corporation.
In a recent article he wrote for Forbes, Paul argues that management is still dominated by this “Theory X” worldview. “Theory X” being the industrial model of carrot and stick management, where “workers” are seen as lazy and demotivated, requiring a combination of benefits and coercion to achieve results.
When 3 Netflix execs went public about their complaints on internal communication, they were summarily dismissed.
If you want to practise more open business communication like Radical Transparency, you also need to be open. That means being vulnerable – removing the artefacts of status and hierarchy that shield management from open and authentic conversation.
We talk about empowerment, but it has to be given. You have to be willing to give people power, to give it up. In the workplace we still operate off an industrial age model – supervision.
Transparency isn’t a one way mirror: as much as it expects employees to be honest and open in communication, it requires leaders to let go of their cognitive biases. Bandaids won’t work.
Paul calls this, “Theory Y” management. By contrast, it’s participatory and built less around the contracts of departmental silos and hierarchy but open, decentralized communication. Employee feedback doesn’t become a moot point leading to a potential firing, but the basis on which leaders measure their (and ultimately the company) performance. It’s holistic and seeks to address the challenges of employee engagement not by tackling the symptoms, but by helping leadership change company culture.
What does Radical Transparency actually mean? It means “Speaking Truth to Power”. It means you (the employee) have a position of authority over me (the leader) and that if I tell you what you don’t want to hear, you’re going to thank me for the gift of feedback.
Convincing the Jury Requires Good Storytelling
Open workplaces where people speak freely and without prejudice sounds great in practise. The issue is the last part “in practise”. We human beings are fuzzy, emotional beings that bring their psychological baggage to work every day.
If you want to change these fuzzy, emotional decision processes you also need to know their operating system.
We like to think of ourselves as logical beings open minded and accepting of data, but this is rarely the case. In one study, neuropsychologist E.Tulving found that patients who had significant trauma damage to their emotional cortex weren’t cold and detached like many would assume. Rather, the most fundamental operational challenge they faced was that without resorting to emotion, patients couldn’t make decisions about daily life – like whether to drink tea or coffee, or what to buy their wife for her birthday.
Leaders draw on this emotional core to make decisions. Consider how in the Star Trek series, the duality of Captain James Kirk’s emotional leadership style contrasted to his second in command Spock’s logical rationalisations. If you want to lead, engage and influence people you need strong emotional intelligence rather than logical reasoning skills.
So if you think that critical decisions, like the outcomes of a trial are based on logical reasoning, like most people would assume, you’d be wrong. Sure, we listen to the facts and weigh up their merit, but it’s via our own emotional biases that we are able to make sense of these truths.
As a young trial lawyer Paul discovered this himself the hard way. To win his first cases out of the gate he committed to giving the best researched and most factual presentation. It’s only after a series of defeats that an older lawyer took Paul aside and revealed to him the inconvenient truth about jury decisions, trial lawyers and as Paul would later discover, business. The truth was that people make decisions based on emotion and justify those decisions with logic.
The best lawyers know this. They frame arguments to connect jury emotions with past experiences. The “opening statement” or the “close” are examples of how lawyers use a narrative to help us understand facts.
The flipside of being a strong emotional leader also means that emotion governs much of your own reasoning process. When it works against you, you end up blindsided to both problems and opportunities. Many a poor decision was made because leaders rejected facts or evidence that contradicted their prevailing world view.
Take the story of Kodak leadership in the 1970s. Here was a brand that could have been the Apple of the next generation if it had simply paid attention to the conversations of its people. In 1973, a Kodak engineer named Steve Sasson presented to the leadership the world’s first digital camera. This device could have made Kodak a world leader, far ahead of its time, but with 90% of its business coming from analog photographic paper, managers said to Sasson, “That’s interesting Steve, but don’t tell anyone about it.”
A History of CEO Cognitive Bias
A reminder that CEOs are humans just like the rest of us. Read the article on Forbes here.
Finding Your Advocates for Employee Engagement One Person at a Time
Used effectively, emotional bias is also a powerful tool in business. Steve Jobs famously called the iPod (of which Apple sold over 400 million) not the world’s best MP3 player but a “tool for the heart”.
But Jobs never set out to sell 400 million units, rather he sought to convince one person. Apple made a successful case building a “beachhead” of fans over the long term that became passionate advocates of the brand in mainstream conversation.
One thing I learned about trial lawyers from my conversation with Paul is that’s how juries operate. You’d think that you need to win across the whole jury to win the case, but not so…
The first thing you have to do as a trial lawyer is convince one person. You don’t need to convince the whole jury. You need one advocate who is going to speak for you in deliberation.
The same applies to employee engagement. This isn’t a political game where the biggest vote wins. You start with a small group of employees who “get it” and work with them. One leader cannot change a whole company overnight, but they can start with one person, one team, one department and from this build internal advocacy to create change.
Employee Engagement and The Great Resignation
According to Gallup, “Engagement — not pay — spurs people to go the extra mile and give their best. “
So what drives engagement?
Once a base level of salary and comfort is met, everything beyond this point is arbitrary. A 10% pay rise at the expense of an extra 5 hour commute every week to the new office is, for example, an opportunity cost pay off that employees rationalise when it comes to their own engagement levels.
For years, employers have tried to offset the true friction of work (commutes, stress, meaningless tasks) with a combination of “Theory X” factors from regulations to financial benefits to gimmicks (e.g free beer, ball pits in the office, company mission statements).
There is a myth that we believe the highly paid are willing to accept a level of stress and abuse that others aren’t but this simply isn’t true. Look at the recent example of young Goldman Sachs bankers who went public complaining about the mental health issues of working 100+ hour weeks. Instead of listening to the feedback, Wall Street responded with a “maybe this isn’t the right job for you.”
In the podcast, Paul tells the story of a warehouse facility he was consulting to that had a problem with its workforce shipping deliveries on time within the allocated 8 hours a day. He bargained with them that if they could finish their work in 6 hours and cleaned the warehouse, the could clock off early and still get paid for a days work. It was a win-win for both employees and management, with 80% of the warehouse workers voting for the change. 2 months later on returning to the warehouse, Paul found the warehouse cleaned and empty 2 hours before clock off time, the system was working.
By shifting the employee engagement problem from one of management to a collective management employee challenge you can achieve great results. If you give them empowerment, they become engaged.
But, rather than embrace the win-win that this new working arrangement created, warehouse management resorted back to their traditional Industrial “Theory X” leadership style. Within a year, they renegotiated contracts and upped the “piece count”, meaning they had to load more product in the same amount of time.
These interactions between management and employees are critical. Ask any employee about why they enjoy their work and they’ll tell you it’s the small things that make a big difference – the team, how they are treated by the leadership and interactions with customers. If you want to summarize these factors, it’s other people the collective purpose. (See McKinsey’s article on Purpose and Employee Engagement).
When people are able to exercise control and engage in the process, they feel engaged. Quite often, a one-on-one review with management, positive feedback or effective mentoring can have a more significant impact on engagement levels that bonuses and pay rises. That’s why disruption of communication supply lines in the modern workplace has shocked people into thinking about their own career and happiness.
In Forbes, Jack Kelly writes of The Great Resignation that, “People have started thinking about what they’ve been doing and whether they want to continue on in the same job or career for the next five to 25 years. The results of this introspection clearly show that they want to make a move.”
According to Indeed.com’s Hiring Lab, job postings have been higher than pre-pandemic levels since March, leaving workers with a vast array of opportunity. CNBC reported this summer that four million people had already quit their jobs.
Among actively disengaged workers in 2021, 74% are either actively looking for new employment or watching for openings. This compares with 55% of not engaged employees and 30% of engaged employees.
So what’s driving The Great Resignation?
One factor is happiness, or lack of happiness in the workplace. A new Visier survey showed that the pandemic created widespread remote work with burnout at epidemic proportions (89%), driving a major resignation rate as a result.
The second factor is the pandemic. Work from home has given us choice and exposed us to new ideas about what works and what doesn’t. As we drift back to work we will remember what life was like without enduring long commutes and office politics. One recent study from Envoy stated that 47 percent of returning employees will not remain in their jobs, if they are not offered hybrid work.
But ultimately, The Great Resignation is the symptom of a wider malaise in our leadership.
People Join Companies and Leave Managers
Core to the issue are our leaders. The old maxim, “People Join companies and leave managers” reflects in the data:
Based on meta-analytics of 100 million employee interviews, one of Gallup’s most important leadership breakthroughs was that a full 70 percent of the variance between the highest engaged teams and disengaged teams was merely the leader in charge.
In Paul’s experience, most Leaders simply don’t know. They don’t put in the evening shifts or consider the age old principle of MBWA (management by walking around). They don’t really see what’s going on at the grass roots level of the organization.
Many organizations believe that they have a level of trust with their employees that enables them to speak up and share negative feedback without fear of retribution. In practise, this is simply not true. Employees don’t trust their leadership and they aren’t engaged.
That’s why key to taking a pulse on the reality of employee engagement starts with a 360 Review, where Paul will talk to and interview all stakeholders in the business about what’s really going on and how the Leaders are doing. It’s what Paul calls the moment of truth and you can find out more about Reviews in his Forbes article here on Appreciation Reviews.
When we talk about 360 Reviews on the Podcast, I wonder how this could have created an alternative ending for Kodak. As their CEO said at the time, “if I told people it was raining outside, even on a sunny day, they’d tell me it was raining.”
A 360 Review would have delivered the uncomfortable, but necessary truth. It could have saved billions of dollars in lost value (Kodak later filed for Chapter 11 bankruptcy protection), thousands of jobs and ultimately one of the most iconic tech brands of the 20th century.
All companies and their leaders are prone to becoming victims of their own success. Their own “BS” as Paul cauls it. Like the Netflix “Radical Transparency”, they start to believe in their own hype rather than the news from the trenches. That’s why Paul calls his coaching style “No BS”. These may be uncomfortable conversations to have but so much failure in business and life was prefaced with someone refusing to acknowledge data or experience out of their comfort zone. The modern day equivalents of Sasson don’t stick around for fatter pay checks or better benefits, they seek out challenges and meaningful work that can be easily crushed by the cognitive bias of an ill informed manager.
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