Businesses Face an Engagement Crisis

By Bill Leonard Jul 27, 2011
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As the global economy recovers from the worst recession in decades, low employee engagement has hit epidemic proportions, according to Kevin Kruse, president and founder of Krū Research and co-author of the book We: How to Increase Performance and Profits Through Full Engagement (John Wiley & Sons Inc., 2011).

During a July 20, 2011, webcast sponsored by Human Capital Media, Kruse told the audience that most employers “face an employee engagement crisis” and that the challenge of re-engaging workers is falling squarely on the shoulders of HR professionals.

Although many business leaders say people are crucial to the performance and profitability of their organizations, they usually don’t follow through on that statement, Kruse claimed.

“As an experiment, every month I Google the term ‘boost shareholder value’ and see if any of the strategies businesses are using to achieve this goal include improving employee engagement,” he explained. “I usually find strategies like ‘expand global markets’ or ‘build customer loyalty through brands,’ but very rarely do I see any mention of employee engagement.”

Kruse asserted this is a major oversight by top-level managers. While the focus of most CEOs is “to boost shareholder value,” they seem to ignore or aren’t aware that employee engagement can be one of the best and quickest ways to achieve this goal.

He pointed to the example of the Campbell Soup Co., which began to stumble in the 1990s and spent the next decade struggling for survival. When Doug Conant became CEO of Campbell’s in 2001, he announced that his number one priority at the company was to improve employee engagement.

Many of Campbell’s executives scoffed at Conant’s plans and said that the company faced many other more pressing issues. In response, Conant fired 300 managers who disagreed, according to Kruse, and then told the remaining executives that their primary goal was to restore employee engagement.

The success and turnaround of the company since then has been nothing short of miraculous, Kruse said. Since 2008, Campbell’s total sales and revenue grew nearly 30 percent. By comparison, the average for other Standard & Poor’s 500 corporations declined nearly 10 percent, he said.

Conant proved that employee engagement was the issue, according to Kruse, and said that Campbell’s story has captured the attention and imagination of many business leaders.

What Engagement Is All About

While employee engagement is a hot topic, few business leaders have a clear notion of what the term means. Kruse told the audience he worked with a client that had developed an equation that defined engagement as the sum of four elements: pride, satisfaction, advocacy and retention.

Employees who have pride and sense of satisfaction in their work and are advocates and loyal to the organization will be highly productive, he said. And the example of Doug Conant and the Campbell Soup Co. illustrate that a highly productive and engaged workforce translates into a much stronger bottom line for businesses.

“Employee engagement is a soft thing that drives hard results,” said Kruse.

The three primary drivers of engagement are growth, recognition and trust.

“The good news is that it’s not very expensive for businesses to focus on and address these three elements,” Kruse said.

For example, managers can focus on employee growth by scheduling one-on-one meetings on a regular basis to discuss employee goals and career development opportunities, he explained.

In addition, managers must be prepared to show appreciation for jobs well done.

“Don’t use e-mail to show appreciation; handwritten notes are the best,” he said. “People will save these notes and often display them at their desk or workspace.”

“Also offer recognition in public where others will see and hear it,” he said.

The Importance of Trust

Trust, Kruse said, is a foundational element that must be engrained into the corporate culture. Employees must believe that they are empowered to make decisions; otherwise they won’t have the confidence to do a good job and will second-guess their choices.

In turn, business leaders must earn the respect and trust of employees, Kruse said.

He said that he has often heard the phrases “they lied to us” and “we were lied to” from employees. But Kruse said terms “lying” and “liar” might be a bit harsh in these cases because by definition “to lie” implies intent to deceive.

“I don’t think most business leaders intend to deceive employees and stakeholders, but often things happen and people believe they were deceived,” Kruse said. “Often it is much trickier than you think to keep promises, because situations change and unexpected problems arise.”

Kruse said that business leaders face the danger of turning into liars or of being perceived as liars when three things happen:

  • They become actors by trying to stay positive all the time.
  • They become paternalistic by trying to protect or shield employees from bad things.
  • They become nonconfrontational by trying to agree with or appease everyone.

The fatal flaw of many CEOs, according to Kruse, is “that they let HR focus on employee engagement and assume good things will happen.” Yet he said the level of employee engagement is a function of the corporate culture and therefore must be embraced fully and supported by all levels of the organization.

“Everyone within your organization is a leader,” he added. “They might not supervise or manage a team or projects. However, they can lead by demonstrating their commitment to doing their best,” Kruse said.

He reminded the audience: “Great leaders focus on growth, recognition and trust.”

Bill Leonard is a senior writer for SHRM.

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