Thursday, March 28, 2013

Webinar Recording

Employee engagement is worth far more than you'd imagine.  We discussed this and what causes employee engagement to deteriorate in hierarchical companies, and how to fix that in a webinar produced on Thursday March 28th 2013.  To get in for free go to

Monday, March 18, 2013

Start with Why

Start with Why
Value of Engagement - Big Bottom-Line Impact.

What do you think of when someone mentions employee engagement?  Is it employee happiness, employee job satisfaction, employee fulfillment, employe well-being?  Well you do get these.  However, these are byproducts. It’s really about the money.

Employee engagement is evident in the level of discretionary effort and discretionary thinking employees give you.  These turn out to have a big impact on the bottom line, particularly the part about discretionary thinking (it’s the source of innovation).

Discretionary effort and discretionary thinking impact the bottom line in three principal ways:
  • Margin improvement (innovating ways to do things more effectively and efficiently)
  • Top-line growth from existing business (delighting more customer)
  • Growth in new business (innovating new products/services for new markets)

How big is this?  It’s huge! Just look at the first one, operating margin:

Towers Watson published a study of 50 global companies showing the average difference in operating margin among three different levels of employee engagement. The root of this difference is the same whether you’re a global company or a SME  company. If you are a $ 100 million revenue company with low employee engagement you’re averaging around a $10 million operating margin.  However, if you manage to engage more employees to reach the ‘high’ engagement level, your operating margin jumps to $27 million.  That seems to be worth a little bit of effort.

‘High’ engagement does not mean that 100% of your employees are fully engaged.  In fact the percentage of fully engaged employees in a ‘high’ engagement company would typically get you and “F” in school.  It means that between 40% and 60% of all employees are fully engaged.  This means that the 27% operating margin that Towers Watson reported includes employees who are not fully engaged, they tend to drag the margin downward.  Thus, it’s likely there is still more upside opportunity.

Recognizing the polluting nature of partially engaged population dynamics, Gallup took a look at teams where all members were fully engaged.   This allowed them to better isolate the impact of 100% full engagement.  Their study produced a bigger lift but then they measured more than just the operating margin.  They showed a 240% lift in performance vs the 170% lift in operating margin that Towers Watson reported.

Are there companies that operate with near 100% of their employees fully engaged?  Yes there are.  (see Morning Star ) It can be done and you can do it too.

If you’re a stockholder or owner in a company where the percent of employees who are fully engaged is not approaching 100%, then you should be pretty unhappy with the leadership team.  Their failure isn’t just picking your pocket, it’s ripping the pants right off you.

Saturday, March 16, 2013

The Urban Open Road

The other day I was thinking how self-indulgent we drivers in the Chicagoland area are.  If you are on one of the tollways that make up the highway system in Chicago, and the traffic is moving ‘at speed’, then chances are you’re going 75 miles per hour or better.  At this speed, every one hundred miles the average car will pump 20 pounds (a couple of watermelons in weight) of additional carbon dioxide into the air versus traveling at the 55 miles per hour legal limit.

One day I decided to avoid pumping that additional CO2 into the atmosphere and discovered I could enjoy an even greater self-indulgence.  

I used to drive out West where the open road meant a relaxed and enjoyable drive with no traffic to worry about;  it meant no stress, no aggravation from other drivers getting in your way, and no frequent lane changes to keep up your rate of speed.  Now I have discovered urban open road driving right here in Chicago every day.  Here is how it works.

You get in the right lane, set the cruise control at 58 miles per hour, sit back and relax.  For all intents and purposes, you have no traffic to deal with.  Oh, there are lots of other drivers on the road going past you and around you; but at no point is anyone ever in your way.  In front of you it is nothing but open road.   It is calming, relaxing, and very enjoyable.