Making Engagement Real: From Theory to Practice Part One: Express Yourself

1. Making Engagement Real:From Theory to PracticePart One: Express Yourself Tamara J. Erickson October 3, 2006

2. I Have a Job Offer for You . . . ! It’s the job of your dreams . . . and here’s how it begins: You’ll be officially on probation for the first three months – at the end of the time, your team mates will vote on whether you will receive a permanent offer. I can’t tell you exactly what job you’ll have. You’ll spend the first three months in an intense fishbowl challenge. Based on how you do, we’ll determine your role in the company going forward. You’ll spend the first three months in training, learning “our” way of doing this job. We have a step-by-step approach that must be followed carefully, and will lead to success, if you do.

3. Today’s Workforce:A Diverse Spectrum of “Hearts and Minds” • New assumptions about how the world works • Differing motivations driven by the varied roles work plays in our lives • The new diversity: individual needs and preferences

4. The Lines Are Crossing:A Growing Shortage of Workers in the U.S. Expected Labor Force and Labor Force Demand Millions of People Source: Employment Policy Foundation analysis and projections of Census/BLS and BEA data.

5. It’s Time to Care • No more ability to dictate employee conditions or even pre-hire specifications • You must be ready to “turn every stone” to find talent • No more ability to survive on numbers alone • You must fully engage employees’ “hearts and minds” when they’re on the job

6. A Growing Phenomenon: “Presenteeism” • “Presenteeism” – employees who are at work, but for a variety of reasons, are not producing • Accounts for 80% of lost productivity • Reflects low engagement Source: American Productivity Audit; The Health Coalition of Tampa, Florida (1999)

7. Engaged Employees . . . • Are excited and enthusiastic about what they’re doing • Resist distractions, tend to forget about time or place, and often invest discretionary effort • Routinely produce significantly more than the job requires, often working all kinds of hours to get things done and done right • Enjoy pondering current challenges, even on the drive home or in the shower! • Search for ways to improve things rather than just reacting to management’s requests or to crises • Volunteer for difficult assignments • Invite others in – and are emotionally contagious • Encourage co-workers to high levels of performance and seek ways to help them • Conduct transactions with external constituencies – such as customers – in ways that bring great credit (and business) to the company • Identify proudly with the activity • Are more likely to stay with the company, be an advocate of the company and its products and services, and contribute to the bottom-line business success

8. Employee Engagement It Really Matters!A Growing Body of Research Links Engagement to Productivity Productivity Improvement in Traditional HR Metrics Retention rates, Acceptance rates Reduced Costs Investments focused only on those aspects of the employee “deal” that matter most Customer Satisfaction Emotional contagion of employees in customer-facing roles Enhanced Desirable Discretionary Behaviors Innovation • Insight and intuition • Originality and inspiration • Judgment • Humor Collaboration • Offered input • Leadership • Friendship Correlation to Outcomes Higher share price – Fortune “100 Best Companies To Work For” list outperformed the S&P 500 Higher return on assets – Korean firms with higher organizational commitment had a higher return on assets Lower mortality – U.S. hospitals with higher nurse retention have lower mortality Source: Re.sults Project EMP: Excelling at Employee Engagement, The Concours Group, 2004, based on the work of Dr. Jeffrey Pfeffer, Stanford University

9. Sources Agree: Today, Few Employees Are “Engaged” in Work Random samples of the working population in the U.S. over 18 years of age 17% Engaged 20% 29% 64% 62% 55% Neutral What do “best practice” companies do? Bitter 19% 18% 16% Concours Group and Age Wave Source: The Gallup Organization, Towers Perrin, andThe New Employee/Employer Equation, The Concours Group and Age Wave, 2004

10. There Are No Universal “Best Practices” for Enhancing Engagement! • Companies with highly engaged employees each do very different things • But within each, a pattern that appears to make sense: • The individuals’ preferences • The corporation’s values • The human resource policies and practices • The day-to-day work environment Each company different . . . but somehow internally aligned Source: Re.sults Project EMP: Excelling at Employee Engagement, The Concours Group, 2004

11. Every store divided into teams • New employees hired into one of the teams on a provisional basis • After four weeks of work, the team votes whether the employee gets to stay: requires a two-third “yes” vote • Pay beyond base wages linked to team performance Recruiting for – and by – the Team Employee teams recruit new employees, using peer pressure to build performance

12. Immediate Contribution and Long-term ContextUse newest hires to develop the next generation of strategic ideas, products and leaders • No specific job assignment upon hire • Immersion in a three-month in-house process run by top management, including the CEO • Stretch challenges: to come up with breakthrough new product or service ideas, develop marketing campaigns, etc. • Intense teamwork, deep bonds with peers, being stretched beyond the point of failure

13. Specific well-structured processes, clearly communicated • New recruits start with a full 5-day training program • More training – 235 hours – throughout the first year • Long-term, career development focus Investing in a Common Base of CompetenceA Well-Defined Career Path, with Detailed Training, Creates Fierce Loyalty

14. Work is Clearly Not the Same Thing to All People • Not all people are equally well-suited to all types or styles of work • Not everyone values the same things from the work experience • There is no one definition of a “good” manager or an “ideal deal” • It is smart to target employees that are best for your firm and the type of work • Jim Collins: First, get the right people on the bus • Old Management Wisdom: Hire for attitude; train for skill

15. Expressive LegacyWork is about creating something with lasting value Secure ProgressWork is about the American dream – a predictable, upward path to success Team VictoryWork is an opportunity to be a valuable part of a winning team Risk with RewardWork is an opportunity for challenge, change, learning and, maybe, wealth Flexible SupportWork is our livelihood but not currently a priority in our lives Low Obligation IncomeWork’s value is largely its near-term economic gain The Six Values of Work in Our Lives 1 2 3 4 5 6 Know which ones are important to your employees! Source: The New Employee/Employer Equation, The Concours Group and Age Wave, 2004

16. Expressive Legacy Secure Progress Team Victory Risk with Reward Flexible Support And Companies That Excel at Reinforcing Core Values

17. A Real Best Practice: “Signature” Experience • A highly-visible element of the employee experience • Valuable to the firm in-and-of itself • Also, a powerful symbolic representation of the firm’s human capital values • And a convincing mechanism for prompting self-selection Signature Experience

18. The Common Threads Among Excellent Companies • They know who they are • Not all things to all people • They understand their target employees (current and future) • As clearly as other companies understand their target customers • They communicate who they are vividly, with “stories” of actual practices or events – “signature experiences” • Not through slogans and posters • They align all elements of the employee experience • Reinforce the brand attributes at every step • They embed today’s managers and leaders deeply into the fabric of execution • Not an HR-only-run program They Create a Powerful “Signature Experience”

19. for further information: Tamara J. Erickson tjerickson@concoursgroup.com 978-287-0170 www.concoursgroup.com 800 Rockmead Drive Kingwood, TX 77339 Tele: 281-359-3464 321 Arsenal Street Watertown, MA 02472 Tele: 617-926-0800 211 Piccadilly London W1J 9HF Tele: +44 (0)20 7830 9740 For Further Reading: “Managing Middlescence,” Harvard Business Review, March 2006 “It’s Time to Retire Retirement,” Harvard Business Review, March 2004 Winner of the 2004 McKinsey Award Workforce Crisis: How to Beat the Coming Shortage of Skills and Talentby Dychtwald, Erickson, and Morison, Harvard Business School Press, April 2006