PwC Survey underlines the psychology in Behavioral Advantage

PwC recently conducted a survey which showed things about senior executives’ behavior that would actually apply to most workers.  PwC’s conclusions might have come right out of our work around Behavioral Advantage.  

How executives actually behave does not match the behavior implicitly assumed in many of today’s incentive structures.  

Their six survey conclusions around executive behavior apply more broadly to the general employee population.  1) People are risk averse when it comes to their pay.  They like certainty in their pay structures.  2) People don’t like complexity and ambiguity in their pay. 

If bonuses are allocated by capricious managers, they can become a disincentive and cause employee disengagement -- just the opposite of the company’s intention.  If long term vesting structures are complex, most employees will not find them motivating.  Which brings us to #3) The longer you have to wait for pay, the less that pay is worth.  The PwC study suggests that if the time horizon is three years the value is discounted by half. 4) Fairness is fundamental.  This is a little surprising coming from the most highly paid among us.  Nevertheless, senior executives, like the rest of us keep score.  This makes it nearly impossible to structure incentive pay that’s guaranteed to produce motivation rather than demotivation, scorekeeping makes it a crap-shoot. 5) Job content matters.  Executives would take a pay cut for the right job content.  In Behavioral Advantage, we talk about this in terms of relationships, meaning and identity.  The last conclusion heartened us the most: 6) Executive, like the rest of us, want an identity -- to be seen as a key member of an elite group.  They also want to do meaningful work by getting worthy results.  These two things are key for any employee motivation.

We state this over and over again: “You must pay your people well.  If you don’t, then nothing else is going to make for a good employee engagement initiative.  Assuming you pay them well, you must provide the right identity, the right meaning, and the right relationships for everyone to be fully engaged in the company.”  

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Good Grief! Imagine, being satisfied with achieving 70% of the goal!

Gallup’s chief scientist on the forefront of employee engagement research said. “Some (companies) have moved as high as 70% (of employees are engaged). They didn’t start there, of course. They worked on it and got there in time.”  Are we delighted with a 70% success rate?  In many grading programs that’s just at the edge of failing.  Can you imagine setting a sales goal for the year, and several years later being delighted you got to 70%.  You'd have fired your sale manager years ago.

The two things employees can give you are: 

1. the routine work you ask them to do. (The stuff in their job description)
2. the changes they bring to the table (The stuff that comes from thinking)

When most experts talk about the value of a fully engaged employee as compared to an employee who is not fully engaged they talk about discretionary effort.  That's because they are thinking about the routine work as the employee’s primary mission.  It is important, but does not rocket the company to the top of the industry no matter how good they are at the routine work.  

It is in the changes employees bring to the table where you find the real value.  We have example after example of companies in all sorts of mature and very competitive industries where they enable workers to deliver change that causes the company’s margins and top-line growth to leap ahead of the competition and stay there.  

When you enjoy better margins than your competition, you are in the driver's seat.  You only get there through your people’s thinking.

You can tell an HR group that is focussed on the routine work.  Those people are implementing ‘employee engagement’ programs that are comprised of these sorts of things:

• Articulate and Share Our Intrinsically Good Vision
• Define Core Values – Hire, Fire, Promote based on These Values
• Communicate Like Crazy.
• Reward & Recognize
• Give employees the tools and training they need.
• Set clear SMART Goals
• Foster Trust – Up, Down, Sideways in the Company
• Provide Career Direction
• Sponsor Well-being Programs

These are all good things to be doing, however they don’t get you beyond a lift in productivity.  They don’t go after the key obstacles to motivation and thinking.  These activities allow those obstacles to persist.  Unless you remove the obstacles, people will not give you the thinking that leads to those most valuable changes.  (Perhaps the real problem is they haven’t thought through what those obstacles are.  It is a phenomenon of human psychology that when we take action that feels right, and we repeat that action, it takes on the cloak of being the right action even when the data shows it isn’t.)

The Behavioral Advantage program removes the obstacles and goes after all that valuable thinking which will enable the company to rocket to the top of the industry.  We are happy to talk about the program and the tried and true tools we use.  

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Happy Owners

The Guardian Life Index asked business owners “What makes you happy?”  The owners #1 answer was “Customers who appreciate what we do.”

It is a very interesting response because they didn’t say “Customers who love our product.”   It is not about the product per se.  Rather it is about everything that wraps around the product that causes the customer to be appreciative.  

We all occasionally feel this about a product or a company.  For example, it is how I feel about my local coffee shop.  Their coffee is good.  But lots of places have good coffee.  It is about the ambience of the shop; the way the staff interacts with me; and the way they interact with one another.  You can tell they like what they are doing and they like each other.  It make for a very nice experience and I appreciate that.

In the end, having “customers who appreciate what we do” is entirely dependent upon your people.  Behavior is all you get from people.  Getting that behavior is something we actively pursue as part of THNK’s Behavioral Advantage product.  If you’ve read my book “Behave! How to get 100% of your workers fully engaged” you will recognize this as the behaviors that distinguish the company in the eyes of the customer.  Your teams will purposefully and actively identify these behaviors and then define them as part of what they do.  

Getting this kind of deliberate and focussed behavior is one thing, but putting energy and commitment behind it is where employees can make the company truly stand out.  For that, each of your people will define their Identity in terms of being the person the customer appreciates, and then they will pursue that Identity in every customer interaction because it has become who they are.

If you want more information, contact me at THNK@thnk2grow.com