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The most serious threat to your business

By October 6, 2013 May 6th, 2020 No Comments

I recently read a great business book “Engagement is not enough” by Keith Ayers.  The article below contains an extract from the book. Having met Keith and talked about our respective experiences it was reassuring to learn that his views resonate closely with our view at Brownie Points.

If you were asked to consider the most serious threat to the health of your business, what would be your answer? Increased competition? – Perhaps. The threat of emerging markets, the state of the economy? Possibly.

Actually, the answer is none of these.

The most serious threat to the health of your business is not external – it lurks within your organisation – it is employee disengagement. The threat is real and the effects could be terminal.

Fighting employee disengagement should be taken seriously by every business leader. It is a leadership issue. The Gallop organisation has conducted significant research on employee engagement for more than a decade, and has identified three types of employee: Engaged, Not Engaged and Actively Disengaged.

In the book entitled “Follow This Path”, Curtis Coffman and Gabriel Gonzalez-Molin report the average employee engagement in the US is 30% Engaged, 54% Not Engaged and 16% Actively Disengaged. There is no evidence to suggest that figures in Australia vary wildly from these.

The problem is very real. The numbers don’t lie. One of the least obvious but most significant costs of employee disengagement is the % of payroll that is wasted on disengaged employees.

In organisations with only average levels of employee engagement, anywhere between 30 and 50% of your payroll is going down the drain. What would these figures represent in your business? You pay out 100% of payroll and benefits to employees, but those who are not engaged give you 50% or less of what you pay them for.

The Not Engaged, and to a larger degree the Actively Disengaged are very costly, taking their pay and then working against the best interests of your organisation, undermining the good work of engaged employees by failing to meet deadlines, complete projects or lowering the overall quality of the job.

When employees join your organisation, they start out engaged and positive. On day one they are excited about getting the job, switched on, motivated and ready to make a contribution to your organisation. So what happens to bring the average down to below 50%? An employee’s first six months in your organisation are critical. According to Coffman and Molin, “on average, in the first six months of employment, employees are engaged… after ten years the proportion drops to 20%.

That bears thinking about. During the first six months an average of over 60% of employees switch off and engagement continues to decline over time. There is evidence that this s a global issue, with data consistent across the US, Germany, UK, Australia, Canada and Japan.

Research shows that management has failed. For such a high percentage of employees to become disengaged over the first six months, there must be a significant failure at the leadership level. Leaders at all levels have not sustained the natural enthusiasm and commitment their employees had when they started.

Many managers do not even recognise the threat to the health of their business, so they do nothing to treat it. Other managers aware of the problem look for a quick fix, attempting to cure it with a stop gap measure. They throw money at the problem, thinking that better compensation, benefits or working conditions will fix it. Research shows that this does not work.

There is no quick fix for the problem of disengagement. If you are serious about getting your employees to be as passionate as you are, you need to focus on igniting the passion in your team. You cannot simply buy passion with money. Getting your team to be as passionate as you are about your vision and goals will take time and great leadership. It requires a commitment from you to provide the leadership that gets people engaged and then develops them into a high performance team.

If you want to create a great organisation that not only achieves outstanding results, but also attracts and retains the most talented people, you need to ensure that you are not focused on the four fundamental threats of disengagement which are:

1. The obsession with financial results

2. An obsession with control

3.The obsession with avoiding responsibility

4. An obsession with logic.

Behind these there are three primary principles why leadership fails to achieve business results:

1. Most leadership training is an event not a journey.

2. Most leadership training does not develop emotional intelligence and trust

3. There is no accountability as most initiatives do not require leaders to be accountable for what they have learned.

What’ the solution? Only hire engaged employees? But you did, didn’t you?, so all you are doing is going round in circles replacing disengaged employees with engaged ones, only to make them disengaged in a short period of time.

The key answer is TRUST.

Organisations that build workforce engagement programs that revolve around trust, empowerment, autonomy and purpose report significantly greater corporate performance than those that micro manage or use the outdated ‘carrot and stick’ approach. Dan Pink in his motivational books and presentations talks about autonomy as a key motivator.

Brownie Points is focused on helping organisations, commercial and Not for Profit, to build successful staff engagement programs through recognition of positive behaviour. We help our clients focus on the outcome rather than on the detail of how to carry out a particular task. When a staff member has a say in how to do something evidence shows that the results are far greater.

Tony Delaney

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