The Existential Leadership Challenge of the 21st Century

The Existential Leadership Challenge part 2 of 3

 

Can you name a business strategy that has been proven to improve efficiency and productivity, retains customers at higher rates, and produces more profit for the company?  I didn’t think so.  However, all of these things have been proven to be impacted by employee engagement—yes, all.

Also, consider this: more than a quarter of your employees are at high risk of turnover in this economy and, of those, one-third are the ones you really want to keep, the talented and motivated ones who are getting the good performance reviews—going beyond expectations.  In a recent survey of more than 550 senior executives, the Harvard Business Review noted that employee engagement has become a top business priority for business leaders.  Why? Because their findings show that a highly engaged workforce not only achieves the things mentioned above, they greatly reduce the costs related to hiring and retention in highly competitive talent markets.  

 But, here’s the issue: While most executives agree that employee engagement is key to their success, few know how to have a positive, sustainable impact on it.  Further, HBR found that there is a disconnect between executive managers and middle managers about the level of engagement in their organization.  Their analysis showed that top executives were much more optimistic about levels of employee engagement in their company, making them seem out of touch with middle management’s view of the frontline reality.

The importance of employee engagement would be hard to overstate.  It is, indeed, the wake-up call for leaders in the 21st century. 

 In this instalment of the series, we’ll take a closer look at this issue through the eyes of our distinguished CEO panel, and I think some of the responses might surprise you.

A reminder: our panel is made up of five CEOs who are, in alphabetical order: Tana Le Moigne, Director-Google CZ/SK; Mykola Melnyk, Chairman-Sanofi CZ/SK; Pavel Rehak, CEO-Direct pojistovna; Tomas Salomon, CEO-Ceska sporitelna; and Milan Vasina, CEO-T-Mobile CZ/SK.

Tana Le Moigne

“It’s very simple; a culture of engagement is the engine of the company.”

To Le Moigne, an engaging culture is the direct result of a leader committing to building what she calls a bottom up culture.  This is a concept in which everyone in the organization owns a topic, and everyone contributes to all aspects of the company culture.

True team cohesion comes from an environment in which people feel free to contribute, to give honest, open, and direct feedback.  According to her, “This is where most of the superior product offerings at Google come from—engaged, empowered, informed, feedback sessions.” She’s not talking about your average, everyday feedback session, either.  At Google there are regularly scheduled sessions in which, through technology, any employee, worldwide, can make a comment or pose a question directly to the two founders, Larry Page and Sergey Brin.

Before the session, employees post their questions.  Then, every employee votes on which questions are the most important.  By the time the session takes place, all questions have been prioritized and the founders address them in order of the employees’ view of importance.

“This kind of openness and transparency on the part of the founders creates a credible, constant dialogue among people at all levels.  It connects people’s hearts as well as their heads.  This is the foundation of employee engagement—open dialogue, actually demonstrating that leaders care enough to listen and engage with anyone who has a question,” according to Le Moigne.

She goes on to explain that at Google, engagement is everything.  Engagement is what enables innovation in her view, and today, without innovation, a company is in a death spiral. 

“Respect, reputation and trust are clear differentiators today and they all are by-products of engagement. Engagement is a demonstration of mutual respect, which is obvious inside and outside the company.  This in turn creates trust, which is the most important currency in business today.”

 

Pavel Rehak

“Without an engaged team, the leader is the only source of momentum and energy, while with an engaged team, the leader channels the energy of the team in the right direction. This is a huge difference.”

So, to Rehak, the decision to invest your time as a leader into creating a culture of engagement is really about deciding what your highest and best use as a leader is.  If you think that spending your time focused on continually motivating people, identifying opportunities to improve, coming up with innovative ideas and creative solutions to problems—all by yourself—then, you don’t need an engaged workforce.  He goes on to add, “Yes, you may delegate implementation to the team, you will still have to be the engine.” By trying to cover these areas alone, a leader is severely limiting their organization’s ability to grow at a competitive rate.

“An engaged team doesn’t need energy, they radiate it. They don’t need to be told what to do, they work and create on their own.” In this way the leader becomes more of a coordinator of talent, someone who can support selectively, as needed, and inspire people versus trying to “pull the cart” all by one’s self.

He closes with an insight that has significant meaning, not only to leaders, but to their shareholders and those who look to them for the success of the enterprise.  “The growth and development of an engaged company is much more sustainable if it is based on an engaged team as opposed to one individual, because when something happens to that person, the company stumbles and loses its drive.”

So, the reason this investment, this decision of time and resource allocation, is so important is because it addresses one of the most important responsibilities of a leader—to build a sustainable enterprise.  Engaged teams do a lot more than just achieve company goals.  They build companies that last.

 

Milan Vasina

“It is very easy for a leader to fall victim to short-term thinking and focus solely on monthly and quarterly results, but today’s leader must be strong enough to fight against that mentality.  This is what the CEO’s vision should be all about.” 

When a leader is successful in making the transition from a pure short-term focus, something interesting happens, according to Vasina. This transition becomes the energy that triggers a transition for the company, too.  “The organization then transitions from one that struggles to survive on threshold performance, burning people out, to one that creates an entirely different performance dynamic.” 

He sees this transition as the sine qua non for sustainable success.  This thinking—thinking about the future—inspires people and gives them something of which to be proud, and pride drives performance, which drives sustainability. 

If people see that their leader believes in the future, that gives them something to believe in and when enough people begin to feel that way, they form strong team bonds and bonds to the company.  He adds, “Let’s say you have all the parts for building a car.  If you assemble them incorrectly, you won’t get anywhere—nothing happens. It might look like a car, but that’s about all.  It’s the same thing with teams.  They may look like a team, but it is only through the “magic” of engagement that the pieces come together in the right way.  This is when teams actually create energy that drives performance, drives new product development and satisfies customers.”  There is another important point to all this.  “Engagement actually creates engagement—it’s like a virus and it can be highly contagious in an organization.”

Vasina explains that the reason he believes this so strongly is that he feels his success as a leader is really the result of other people.  It’s the result of engaged people and teams who really cared about what they were doing. “People are number one to me and my success as a leader comes from their success.”

 

Tomas Salomon

“Traditional corporate hierarchy is gone—it’s a thing of the past—it’s far too slow to keep pace in today’s world, and it doesn’t nurture management competence.”

To Salomon, the real question is how to reorganize large companies to be more responsive to engaged employees, which, at the moment is a top priority for him.

“The last 30 years have seen enormous change across all industries—we’re all becoming technology companies and the speed of change and disruption is accelerating.  How can a company survive today and tomorrow with management practices from 50 years ago?”

Empowerment and autonomy are the keys to the future of employee engagement, to him.  He envisions a time in which employees will have more say over who they work with, for example, which will, in itself, have a positive impact on engagement.

“We’ve had this all backwards.  We went after money to find fulfilment, and it’s just the opposite.  Look, I know it’s measurable: engaged people are more productive, they produce things with higher quality, they make customers happier, all of which translates to more profit for the company.  As leaders, we need to believe in our people, spend more informal time with them—not just transactional interactions in meetings.  It’s when we actually listen to them that the bond of engagement forms, and I truly believe that the power of engagement is underestimated.”

He adds that all of us has a choice of either spending our careers, a full one-third of our lives, in economic survival, or doing something we love, all of which becomes part of a kind of social contract. Leaders need to provide an environment where people can openly explore options in which they feel empowered, growing, learning, and autonomous. Employees, in turn, must commit themselves to exploring ways to add value.  The organization benefits and the employee is happier and more fulfilled. Sounds like a 21st century version of win-win.

Mykola Melnyk

“When an employee is disengaged, that can also be a sign of good mental health, especially if they are placed in toxic environments which hold them back and keep them from being their best.”

 An interesting perspective, indeed, and it does beg the question that leaders must ask themselves: Why should your employees be engaged?

Even though the key objective for a leader is to get things done, Melnyk believes that engagement is either the enabler or the bottleneck—everything depends on execution.  “The greatest gap in leadership today is between knowing what to do and getting it done and engagement is a crucial element in closing that gap.”

“Engagement is the overall essence of society and human nature.  It’s the “X” factor of human nature that can produce extraordinary results.”

One of the things Sanofi, as a company, does to encourage ownership and a feeling of engagement is to foster a culture where people are empowered to take risk. “It’s a culture of seeking forgiveness, rather than permission, which supports decision making at the individual level.”

Another thing he points to that has had a positive impact on strengthening teams is diversity—age, gender, culture, physical ability.  “We actively try to put teams together in a very heterogeneous fashion, which brings a richness of different perspectives and has become a competitive advantage for us.” 

In an environment of low unemployment, Mykola says that it becomes a game almost for companies to grab people quickly, stressing money and benefits in a very transactional framework, which is easily commoditized and works against sustainability. “This type of activity builds a perfect case for focusing on employee engagement where personal and professional development are the drivers—these are the things that drive true commitment.”

In the next instalment, I’ll give you the key take-away messages from our leaders and from my own analysis.

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De Callier is an executive coach and author and can be reached at pepper@pragueleadershipinstitute.com