Conscious-Business.org.uk

A home for the Conscious Business community in the UK


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We’ve come a long way baby

In its short history, the human race has achieved some magnificent things. But together we’ve also created a host of complex, and very serious, social and environmental problems.

Of the three powerful forces in society – business, the public/charitable sector, and politics/religion/media – I believe it is only business which has the power and the flexibility to address these problems.

Power because of its reach – the ability to touch many lives, even from a small base.

Flexibility because only business seems to be currently capable of transforming itself – reinventing itself. Away from greed and personal profit and towards really addressing those broader, much more important problems. Above all, business listens, and people are crying out for change.

But change alone isn’t enough. Too often change just means small improvements to delivering the status quo. We need ‘step-change’ – real transformation. Transformation is beyond change – it means adopting a new purpose, and a completely new way of operating, with new energy.

I am reminded of the story of one visitor to Ray Anderson’s visionary company Interface. A fork-lift truck driver, working for a company that makes office carpets, after helping her all he can, tells the visitor he must get on, because he’s “busy saving the planet”.

That is the new kind of energy we need in business people. Energy released by belief in a new kind of purpose.

How do we get there? As the author Jeanette Winterson said in her New Year resolution: “It is important to work out what is important. Living consciously has never mattered more.”

Individually and collectively we need to raise our consciousness. To become part of the group who are trying to transform things, systemically, radically – at the root.

We need to become more aware of what matters, why it matters, and what we can do, and are doing, about it.

And often are not doing. We need to become aware of our habits and the other things that hold us back. Conscious of our failings, as well as our successes. That means internal, personal work. As much as putting our heads above the parapet.

There are many, many people on this journey. It is not my place to tell you what you should do. But I can tell you what we are doing.

We are building a business – Conscious Business People – that helps leaders discover a more important purpose, a transformational purpose for themselves and their businesses.

Then we help those leaders develop transformational strategy, structure and culture – to create businesses that are part of the solution. Businesses with positive purpose, and radically better behaviours, and much higher levels of awareness.

We help businesses and the people in them become more conscious, and stay that way.

Many will say this is foolhardy, it will never succeed. That mixing business with purpose is simply wrong and doomed to failure. But I think it’s the only game in town. The only game worth playing.

I’d love to know what you think, what you’re doing to “save the planet”.

Happy New Year.

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Research and Practice in Organisations and People

If you’d like to get a handle on some of the deeper thinking around Conscious Business, you might find it useful to buy and download a copy of the latest issue of eO&P.

We think this is probably a world first – an issue of an academic journal dedicated entirely to Conscious Business.

e Organisations and People is the quarterly journal of AMED – the Association for Management Education and Development. If you download a copy you’ll be supporting its work:

“AMED is a long-established membership organisation and educational charity devoted to developing people and organisations. Its purpose is to be a forum for people who want to share, learn and experiment, and find support, encouragement, and innovative ways of communicating. Our conversations are open, constructive, and facilitated.”

What I really like about AMED  is its focus on research and practice.

Remember Everett Rogers’ bell curve – the diffusion of innovation? If you’re at all interested in Conscious Business you’re probably an innovator or an early adopter. Conscious business is still very early in the adoption life-cycle – indeed the term only really emerged a few years back.

Rogers' Bell Curve

Rogers’ Bell Curve – Source wikipedia

Now research is really useful, but I believe that research combined with testing, practice, experimentation is the way to really get to the heart of a new innovation.

To find out what it is good for. It’s strengths and weaknesses. How to mitigate those weaknesses. How to refine it – and pivot if necessary.

I believe it is only through real immersion in the practice of something that we can properly get to know it.

eO&P is not a peer-reviewed journal. I like that too.

Peer-review has its strengths. But Kuhn’s famous work on paradigm change has shown us that there are dangers too – that elites can, for example, suppress the emergence of new ideas. And that this can slow innovation and hence paradigm change.

And boy do we need a new paradigm for business 🙂

Most of the academic publishing houses seem to be very conventional businesses. Where will the energy to overturn the existing paradigms come from, if not from us?

Not being peer-reviewed doesn’t mean that we (@smilerob and @peteburden) didn’t work very hard to ensure the quality of the pieces. We did.

And the authors did a fantastic job too. Some had written for journals before but for others it was a  totally new experience. All brought their practical, hands-on experience as well as critical thought to the project. We’re really proud of every piece, and of the overall outcome.

I’d also really like to thank the publisher of eO&P, Bob MacKenzie and everybody at AMED (especially David McAra) for their massive help and support during the publishing process. We’re currently starting work on the next edition and we’re looking forward to that collaboration too.

So please take the trouble to download a copy, or better still if you are really interested in supporting the development of management and leadership education please consider joining AMED. There’s an annual subscription option at their website.


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Conscious Leadership: The Challenges of Empowerment

Laziness is my primary motivator when empowering others. If a thing is worth doing, I believe it’s worth getting someone else to do it.

This, however, is not as self indulgent as it might seem. I know that as a leader one of the first things I need to learn is to let go and trust others to get on with it.

I have not always been very good at this. However, over the years I have learnt why my old, more controlling ‘I’ll do it for you’ ways don’t really work and why empowering others is essential.

First off, lets look at confidence. My mother’s “Let me do that for you darling” – while I’m performing some simple task like making a cup of tea – is probably meant as an act of kindness. How I actually feel it is: “I am an idiot that can’t be trusted to make tea, despite the years of apparent evidence to the contrary.”

This not only irritates me but it also kicks my confidence, as it’s a tacit implication that I’m incompetent. There’s a subtlety to it though because cognitively I know I’m not, however I still irrationally feel it at some level and feelings tend to beat thoughts.

Learning is another key benefit of empowerment. In today’s fast moving, customer-centric world it is essential that everybody learns, and learns fast. Best of all is when they are so confident and engaged they take responsibility and drive their own learning.

When it comes to learning new things Mum is very much of the school of “probably shouldn’t try as it’s likely to be too difficult”. For me this is less than ideal. When I’m learning, what I really want is lots of encouragement and belief, as this helps me push through the self doubt.

Challenge is also very important to us. Solving something like a crossword puzzle or winning a video game is all the evidence we really need for this. Overcoming challenges helps us grow our self belief (or confidence) and it usually gives us a little frisson of excitement, and a sense of deeper resilience.

So why is empowerment so important? In my quest for a work free life, it is fairly obvious that once I let someone do something little – like a task I have handed them – then I  can give them more and more responsibility – until ultimately they are acting more like a leader themselves.

Effective leaders actively offer responsibility by distributing leadership power among the people that need it, allowing leadership to occur where it is needed most, often in the front line of business.  Most importantly this helps get a lot more done. It’s also likely to help teams be happier, more engaged and show more initiative.

It’s also probably helpful to think of leadership more as how you enable others to do what they need to do and then get the hell out of the way.

Although this is obvious in theory it can be quite hard to get right in practice. If you’re a control freak, for example, not only are you likely to be killing off your team’s motivation and innovation but you are likely to need more than a little help overcoming this urge.

A good and challenging place to start is delegation, and to get good at that. The more you are able to do this the more you are getting closer to allowing others around you to lead.

Inexperienced or untrained managers are most at risk of sabotaging themselves and their attempts to delegate.

The problem is, even if you are a ninja level engineer with technical insight gifted seemingly from the gods, management requires a totally and utterly different skill set and will exercise very different personality traits and emotional muscles, including some you might not have developed yet.

Many organisations miss this obvious fact and expect people to just figure it out, without proper investment in management training or personal development.

Not knowing how to be effective as a manager (common in those newly promoted to management) and without any help from those around them, before long the freshly challenged become frustrated and revert to what they do know – in this case “engineering”. They then start interfering with the “engineering” people in their teams are trying to do – showing them how they are doing it wrong and how the new boss can do it better.

As I said above, the thing most likely to undermine my confidence, motivation and general goodwill is poorly veiled criticism over my shoulder. Every “suggestion”, implies that I’m doing something wrong and thus can’t be trusted to perform the simple thing in front of me. And so I disengage.

Psychologically, I’m in a “double bind”: I’m feeling things are wrong even though I can see my way is working or valid. So I stop trying – because I’m wrong either way. I’ll go and look at what my friends on Facebook are doing instead.

Challenge is also removed – if my manager does take over and do my work for me. I lose the opportunity to learn. And, of course, I now believe he thinks I’m an idiot, so trust between us is destroyed.

It is worst of all when this exists at the top of hierarchies. Perhaps we are genetically predisposed to look up the hierarchy for tips on how to behave. So if someone senior is guilty of micromanagement, this crime can infuse the organisation below them like an unwanted inheritance.

An antidote follows. Let’s imagine the team player we’re delegating to is called Bob and he reports to me. Here is a way to set up delegation, broadly in line with the approach espoused by the late Stephen Covey. This is a mechanism that should catch any possible derailment and put the task back on track.

Bigger picture: I help Bob understand where he and what he’s doing fits into the bigger picture. What the organisation he is part of is trying to achieve. This taps into Bob’s sense of purpose and connects the task he’s achieving with that broader purpose. The context also helps him understand the implications if he does not get it done.

Ownership: I give Bob total ownership of the task. It’s up to him to get it done. This is so he is clear that no one else is responsible for achieving the desired outcome. No one is going to pick up his toys or tie his shoelaces for him. The buck stops with him. Essentially this is an invitation for him to “step up to the plate” of responsibility.

Expectations and Results: I also make sure Bob is very clear about what kind of results are expected. This will be helped if Bob already understands the bigger picture. It’s even better to ask Bob to consider the position of the other stakeholders and figure out what a good outcome for all might be.

For example, Bob might decide he needs to finish the project on time with a high quality, technically robust solution, and on, or under, budget.

Booby Traps: If there are some big obvious pitfalls in front of Bob then it’s only fair to warn him of these in advance so he can try to avoid them.

Support: If Bob is experiencing any problems, is unclear or struggling with the task, or if the delivery of the project is in jeopardy, I make it clear I am available to support to him to get through it, or to re-agree expectations. But I definitely am not going to do it for him.

Mistakes: Bob will undoubtedly make plenty of mistakes, we all do. This will help him learn and become more resourceful and do his job better, especially if all “mistakes” as are treated as learning opportunities. Not with punishment or disapproval, but with encouragement and support.

Feedback: Feedback should be a gift not a weapon. If given as a gift your teams will grow, develop and make you look good. If used as a weapon then your groups will regress, be generally unhappy and perform badly – they will be fearful of taking risks or “getting it wrong”. This kills innovation, creativity and energy.

Finally, having set all this up, you now need to live by the rules you’ve created. Again this is  basically because “monkey see, monkey do”. Other people will do as you do, not as you say. Any ambiguity also creates “wriggle room” – space to allow people to wriggle out of their responsibility. However, if you are consistently well boundaried and do what you’ve said you will do, the opportunity for others to wriggle will be minimised.

Good luck!


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Is conscious business doomed? Quite the opposite…

One of the Performance Review Pro team was at the Meaning Conference in Brighton last week – a Conscious Business event full of people who want to make business more meaningful and kinder to the planet and the staff, while still making a fair profit. Speaking as someone who lives on this planet and is a human being, this seems like a good idea, but its critics maintain that business is business and that ‘Conscious’ might just mean ‘less controversial’.  Capital and Kindness are not the same thing, they say, so is conscious business doomed?

Happine$$ vs $$$$$$ - Performance Review Pro - Performance Appraisal Process

Well, in the blue corner we have the fat-cat capitalists, eager to flog every last inch of performance out of their wage-slaves; in what used to be the red but is now the green corner we have the old hippies, agonising about the morality of profit and going to such lengths to be nice to people that they fail to break even and end up going down with all hands. These two positions are inherently opposed to each other and anyone who says other wise is, as one reviewer said of John Mackey’s Conscious Capitalism, spouting a lot of “well-meaning rhetoric” (hot air).

But this is an oversimplification – business has always involved compromise between profits and ethics, since the abolition of slavery at least.  In practice there is a continuum of differing approaches to business, with a harder attitude to profit at one end and more concern for employees at the other. The question for every business person is where on that spectrum to position your management style, given that each point has its own disadvantages.

At the end where the drivers are margin, efficiency and profit, people become part of the machine.  We make them work harder by threatening their job security (if there is a shortage of jobs or the work is simple) or offering them more money (if there is a surplus of jobs or rare skills are involved).  Carrot-and-stick, in other words.  The hope is that these ‘incentives’ will stimulate focus, engagement and productivity.  But they actually bring stress, disputes, anger, apathy, burnout and (if there are other jobs to go to) staff turnover.  So right now, as business is picking up, people who have been managing on this basis can expect to lose their best employees.

At the other end of the spectrum, where love and peace reign and fulfilling the conscious business dream should be easy, it is often hard to get anything done.  Democratic  decision-making is agonisingly slow, and it is impossible to tell anyone that what they are doing doesn’t work.  It’s just as well everyone is on an equal share of the profit (not that there is any) because pay negotiations would last until the end of time…

So, if you want to achieve a sustainable, profitable, ethical business, how do you decide where to compromise?  Actually, you don’t have to: you really can harmonise the needs and goals of the company and the staff.  You don’t have to beat people or bribe them, because intrinsic motivation is sitting there in each individual.  The same mechanism that powers voluntary, leisure and sport activity in home life is waiting for you to enable it at work.  When you do, your staff will work because they want to, and your organisation will do well, if your business model is sound.

Doing this involves aligning the culture, conditions and communications in your company with workings of the human. That is not just ‘well-meaning rhetoric’ because we can unpack it into practical steps which are straightforward to implement.  And staff enjoy this process because they recognise it as humane and likely to make work work better for them.

This does not mean applying the same changes to everyone – people need different things to different degrees, so you have to measure the need for change from their perspective to see how to enable each team member.  The appraisal or review is a rational place to do this – in fact basing your review process around this discussion is a fantastic way to make use of a process that can otherwise be a fairly negative experience for all concerned.

And so they will want to stay, and to make it work better still, for themselves and for the higher purposes of company, customer and planet.

Happine$$ - Performance Review Pro - Performance Appraisal ProcessSo it’s not a question of humaneor efficient; it turns out that humane is efficient.

The leader who wants to use Conscious Business principles has nothing to fear from the staff, or the market, if they are implemented in alignment with the nature of the staff.  And there is a good way to be sure you’re doing that – take a look at Performance Review Pro


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Is truthfulness a competency?

As human beings, we tend to ignore the elephant in the room because we fear the consequences. Truth is a time bomb; the fuse is lit, and when it goes off we’ll all get blown to bits. Really?… It could just be that when it blows there’s nothing more than a lovely colourful (and perfectly harmless) foam fountain. Why do we fear the worst?

Duncan Brodie, a former NHS Director I interviewed for Undiscussables.com a while ago, questioned the logic of a health service that effectively works a Monday to Friday schedule when those who depend on it (i.e. require medical treatment) typically do not conform to an office hours only schedule when falling ill. I’ve also talked before about the notion that what is undiscussable in an organisation is, in and of itself, often undiscussable, and idea that stems from the work of Chris Argyris.

Reading a pointed (as ever) and thought-provoking post by Roy Lilley at NHSManagers.net recently, what struck me is that the two states of undiscussability that Arygris describes may need defining separately.

The undiscussable undiscussable

A subject that is taboo and has yet to reach the stage that it can even be alluded to.

Sexual and physical abuse, whether that alleged to have taken place by Jimmy Saville or within the Catholic Church, often seems to fall into this category. The difficulty that those who have been abused have in having their stories heard, let alone believed, might suggest that this pattern is particularly difficult to break. In organisational/work contexts, they can arise also.

The discussable undiscussable

The taboo alluded to, hinted at, ‘known’, tantalisingly out of reach

Writing that heading I question my logic momentarily, and it is this category that Roy Lilley describes powerfully in another post re mortality rates in the NHS. Analysis of three years of data and four million patient outcomes have revealed a statistically significant increase in mortality rates the nearer to the end of a working week you have elective (i.e. non-emergency) surgery.

It’s a bit like ‘Area 51’, the US Military…. It’s an open secret. Everyone knows it’s there but the US Government pretends it isn’t. Just like MI5. Everyone knew about it but it took the British government until 1994 to admit it existed. And, The Stig, BBC’s Top Gear test driver; apparently everyone knows who she is.

Elephant in the Room, Open Secret.

This is the ‘classic’ elephant: the thing we all know is there but do not want to acknowledge and/or discuss, yet there is tacit agreement that it exists. The undiscussable undiscussable is different: there is no agreement, tacit or otherwise, of existence because the consequences of doing so are too high for some of those involved. Or because those who witness what is happening cannot bear the consequences of even acknowledging it (the bystander effect)?….

There is no easy answer, although I am drawn to two suggestions, both sparked by Lilley.

Data, data, data… Give me more data

The mortality rate issue above was revealed and discussed in sharper terms because not only was there data available, it has been used to make sense of complexity to reveal an underlying pattern. With data, you get to a conversation that takes you closer to a decision based on reality rather than the shifting sand of opinion.

Truthfulness is a competency

In the post on mortality rates, Lilley laid out a challenge for leadership in and around the NHS, in the context of the recommendations in the Francis Report calling for a new approach to leadership practice.

Truthfulness emerges as a key competence when an organisation is faced with the unachievable. Soldiering-on, to protect reputations and careers, not confronting the real issues leads to an environment fertile for fraud, fictions and fabrications. Obsfucation, cover-ups and smokescreens disguise the actualite and defer the inevitable.

Relative to the NHS, and given my own experience working with people within the UK health sector, I would agree. What is more, I am not aware of any psychometric tests, competency frameworks or similar that explicitly seek to inquire into the capacity of individuals in organisations to speak the(ir) truth, relative to role and context (suggestions welcome if there are). And…

A challenge to leaders and leadership development practitioners

My experience of working with(in) organisations and with leadership teams is that the desire for simple answers and certainty undermines those who make the case for slowing down to seek more data in order to establish what is real and not real, what is fact and not opinion. This desire for simple answers and certainty, delivered in as short a time as possible, places a primacy on an illusory form of truth. ‘Directness’ and ‘honesty’ are not the same as truthfulness, the essence of which is grounding in fact or reality, and means you are exposed to the possibility that reality may not be how you imagine it. So a couple of questions, relative to the taboos and challenges in your organisation:

  • To what extent do you know what is true (real), and based on what data?
  • To what extent are you prepared for the truth, whatever it is, or to speak a truth?
  • To what extent is your organisation ready for the truth?
  • What are the consequences, all of them, of speaking out and not speaking out?

Your move.

(Ed: This post was initially published on Undiscussables.com)


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The Real Value of Totems

We often get asked: “How do I know if a business I am working in is conscious?”

There are plenty of posts here, and on other sites, which attempt to answer that question by giving lists of attributes – behaviours, processes, statements of principles etc.

These ideas are very, very useful. But they also have limitations.

Our BHAG is to create more conscious businesses. That means change. Such analytical and diagnostic methods can help bring about change in organisations. But there are other ways to assist change – and to increase consciousness in a business.

For example, in our consulting practice, we often encourage our clients to create what we call ‘totems’. Another contributor to this site, Rob Warwick, has written about this topic too, but from a slightly different angle.

A totem is an object to which a society or group attaches a particular significance or meaning. It may become emblematic of that society or group.

For example, one of our clients created a pack of Top Trumps cards representing the strengths of employees. Another has a large banner which represents the future vision of the company.

A totem can be something physical, or it can be a ritual.

For example, at another client in the ’90s we started holding stand-up meetings. These meetings became an emblem of how things were done. Since then many other companies have come up with the same idea – it’s not a unique practice. By what it represented was unique to that group at that time – in that case innovation and the ability to do things differently, and better.

One of our long-term clients, NixonMcInnes, has at least two obvious totems. One is a ritual: The Church of Fail, which came directly from some workshops we ran for the company. The other is Happy Buckets, which was born a little more indirectly, but still by design.

The idea of measuring happiness in a business has been around for many years. Paddi Lund, for example, first wrote about it 1994. In fact, I borrowed the idea from Paddi’s book “Building the Happiness-Centred Business”. There’s lots of interest in the idea today, post-Seligman and Csikszentmihalyi, and there’s even a Chief Happiness Officer!

Happy Buckets is very simple in principle.

When people leave the office they simply drop a ball into a bucket to show whether they are feeling happy or sad, or something in between. The number of balls is counted up every day. At NixonMcInnes the figures are reported back weekly to the whole team, and monthly to the management team for further consideration.

People often ask: “What do you do when the numbers go down?” “How do these numbers correlate with other business measures, like profitability?” “Do the numbers really measure happiness?” And so on.

Unfortunately, these questions miss the real point of this and many other totems.

The important thing from an organisational development perspective is what simply having Happy Buckets means. What does it mean to the group – the business team – and how will that meaning help effect real, lasting change in the organisation?

Clearly something like Happy Buckets means different things to different people. Meaning is constructed on the fly, and is related to context, our personal state and probably other things.

But we can make some guesses for the meanings people might construct. For example:

  • To some, measuring happiness every day signifies that the company cares about employees and their happiness.
  • To some it means that employee happiness is an objective of the company beyond simply making money.
  • To some it might simply mean that the company likes to measure things.
  • To some it might mean that the company values experimentation and piloting things.

And so on.

All these different meanings give people a story to tell, a narrative to follow. By telling the story and listening to it, we create meaning together. And we gain something to hold onto, something to ‘anchor’ around.

As long as it stays foregrounded, the totem begins to emblemise something about the company – something semi-permanent about the ‘culture’. As we construct the ideas in words and language, we start to ‘live’ it, and the ‘culture’ emerges.

At best that aspect of culture becomes ‘embedded’. Something is now different from how it was. A short cycle of change is completed. Or so the theory goes.

Of course, there’s probably more to it than that.

For example, I can also read Happy Buckets as a transitional object.

Businesses and society generally are stuffed full of such objects. It has been argued that work itself is something that we use to manage separation from our parental figures. Work, just like a teddy bear or a security blanket, helps us grow up, and gain our own adult independence.

So, perhaps, for some, totems like Happy Buckets operate in a similar way. We attach to them, and hold them as important, because they signify something that is important to us about a particular company.

When they represent a particular kind of relationship – a caring relationship between an organisation and an employee, for example – they allow us to foreground that relationship, and perhaps eventually integrate it.

By that I don’t mean move away from it, nor do I mean cosy up to it. I mean to bring the parts together and make a connected whole.

Over time, therefore, that object might allow us to step beyond a simplistic and dependent relationship into a realisation that we can choose to build caring relationships with other adults, in adult ways, in the company we work in, and beyond the company or corporation too.

That also takes us beyond a rather mechanistic view of company culture as something we can ‘build’ or ‘create’ or ‘design’ and into a more complex one – where culture is continually constructed by adults relating to each other. In complex and continually evolving ways.

That to me seems much closer to how life is.

As a way of thinking and being it also generates a ‘living flexibility’ that from a business and a human perspective seems more likely, at least to me, to give us the immediate and longer-term results we need.

What do you think? Does your business have totems? What do they mean to you, and your fellow employees? What are the obvious meanings, and the more subtle? Do they help or hinder people in ‘growing up’ and becoming more conscious?


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Evidence for Conscious Business

Some people would argue that if you need evidence that being more conscious at work is a good thing, you’ll never be persuaded. But there’s also an argument that hard evidence helps – to give confidence and encouragement to those that need it.

So here’s a selection of facts and figures I have put together.

It covers the value of employee engagement, clear purpose, innovation and good leadership. It shows these are what investors look for, and that they are good for a business generally. There is a PDF version here if you prefer to print and read (or send to your ebook).

Investing in  leadership skills:

About 80% of professionals who analyse companies for investors – including investment bankers and executives at private equity companies and hedge funds – say they would place a valuation premium on a company with a particularly effective senior leadership team. And the same percentage said they would discount a valuation if they thought a company’s leadership was ineffective. Analysts and investment professionals placed an average premium of 15.7% on particularly effective leadership, and an average 19.8% discount on companies with leadership that was deemed ineffective.

[Deloitte 2012 How TMT Companies Win The Confidence of Investors]

Stock market performance and shareholder return in relation to conscious business:

Firms of Endearment study – over 10 year period companies that broadly  follow conscious aims outperformed the S&P 100 by ratio of 9:1

[Raj Sisodia, Bentley University]

Stock market performance and shareholder return:

Motivated employees are 52 to 127 percent more productive than those who have average motivation. Companies that have an employee recognition strategy double the return to shareholders compared with those that don’t. 40% of the variability in corporate financial performance comes down to employees sense of fulfillment in the workplace.”

[Richard Barrett, ‘Liberating the Corporate Soul’ – TBD original source]

Growing interest by investors in sustainability, climate change, social factors:

Investors increasingly believe that social and environmental conditions in society can have a direct impact on the business operations of a company and its long-term viability.

In 2011, average support for environmental and social shareholder resolutions topped 20% for the first time, according to research by Institutional Shareholder Services. That’s up from 18.1% in 2010 and 16.3% in 2009.

[Sabine Vollmer  – senior editor – CGMA Magazine March 2012]

 Including more stakeholders improves financial performance:

Despite the drop in performance seen in 2011, companies that are owned by their employees have outperformed FTSE All-Share companies by on average 12% each year.  Over successive three-year periods they have outperformed by 37% and over successive five-year periods by 71%.

[The Employee Ownership Index]

 Transparency:

280 CEOs were surveyed for the report spanning 21 countries. Three-quarters of the CEOs recognised the need for measuring non-financial value. Meanwhile, 76% think the current reporting system places excessive emphasis on financial data. 87% viewed transparency as an opportunity, and 13% viewed it as a threat. The question among many CEOs is how much transparency is too much.

[Research Commissioned by  AICPA and CIMA (the major UK Accounting Bodies) and carried out by Oxford Economics (2012)]

Employee disengagement is expensive and destructive:

In recent years, employee loyalty has plummeted. Here are just a few sobering statistics that may surprise you:

  • Only 30% of today’s employees reported that they were engaged (loyal and productive)
  • 54% reported they were passively disengaged (going through the motions)
  • 16% reported they were actively disengaged (badmouthing the employer, sniping from the sidelines

[Getting Engaged: The New Workplace Loyalty, Mattanie Press, October 2005, By Tim Rutledge]

Congruence and authenticity at work:

In a field experiment carried out in a large business process outsourcing company, it was found that when socialization/induction focused on personal identity (i.e. emphasizing newcomers’ unique perspectives and strengths and authentic expression) it led to significantly greater customer satisfaction and greater employee retention after six months, compared to (a)when socialization focused on organizational identity (i.e. emphasizing pride from organizational affiliation) and (b)when it focussed on the organization’s traditional approach which focused primarily on skills training.

[Breaking Them In or Revealing Their Best? Reframing Socialization around Newcomer Self-Expression By Francesca Gina (Associate Professor in the Negotiations, Organizations, and Markets Unit at Harvard Business School)]
Encouraging newcomers to be themselves rather than adapt to the company culture]

Purpose impacts profit:

A  strong, strategically coherent and well communicated corporate purpose is associated with upto 17% better financial performance

[IMD/Burson Marsteller Corporate Purpose Impact Study 2010. The study is based on research into 213 European companies from 10 industries.]

Employee engagement:

88% of highly engaged employees believe that they can positively impact the quality of their organization’s products;  only 38% of disengaged employees think so

[Towers Perrin 2008]

Only 4% of UK workers exhibit the highest level of engagement with their work.

[Corporate Leadership Council]

Purpose and brand:

40% of a company’s reputation is determined by its purpose and 60% by its performance.

[Burson Marsteller/Penn, Schoer and Berland 2008.]

Lack of employee engagement costs companies re staff turnover, accidents and theft:

Gallup in 2006 examined 23,910 business units and compared top quartile and bottom quartile financial performance with engagement scores.  They found that: Those with engagement scores in the bottom quartile averaged 31–51 per cent more employee turnover, 51 per cent more inventory shrinkage and 62 per cent more accidents. Those with engagement scores in the top quartile averaged 12 per cent higher customer advocacy, 18 per cent higher productivity and 12 per cent higher profitability.

[Gallup in 2006]

Employee engagement and earnings per share:

A second Gallup study of the same year of earnings per share (EPS) growth of 89 organisations found that the EPS growth rate of organisations with engagement scores in the top quartile was 2.6 times that of organisations with below-average engagement scores

[Gallup in 2006]

Employee engagement and innovation:

Gallup indicate that higher levels of engagement are strongly related to higher levels of innovation.

Fifty-nine per cent of engaged employees say that their job brings out their most creative ideas against only three per cent of disengaged employees. This finding was echoed in research for the Chartered Management Institute in 2007 which found a significant association and influence between employee engagement and innovation.  Based on survey findings from approximately 1,500 managers throughout the UK, where respondents identified the prevailing management style of their organisation as innovative, 92 per cent of managers felt proud to work there

[Gallup/Chartered Management Institute in 2007]

Employee engagement and illness:

Engaged employees in the UK take an average of 2.69 sick days per year; the disengaged take 6.19.

[The Macleod Report commissioned by BIS 2009]

The CBI reports that absence due to sickness costs the UK economy £13.4 bn a year.

[CBI]

Employee engagement and interfacing with clients/customers:

70 per cent of engaged employees indicate they have a good understanding of how to meet customer needs; only 17 per cent of non-engaged employees say the same.

[The Macleod Report commissioned by BIS 2009]

Employee engagement and retention:

Engaged employees are 87 per cent less likely to leave the organisation than the disengaged.

[The Macleod Report commissioned by BIS 2009]

The cost of poor employee retention:

The cost of high turnover among disengaged employees is significant; some estimates put the cost of replacing each employee at equal to annual salary.

[The Macleod Report commissioned by BIS 2009]

Employees as ambassadors and relation to NPS (Net Promoter Score):

Engaged employees advocate their company ororganisation – 67 per cent against only three per cent of the disengaged. Seventy-eight per cent would recommend their company’s products or services, against 13 percent of the disengaged.

[Gallup 2003]

Employee engagement and change/flexibility:

Engagement  and involvement are critical in managing change at work; according to Price waterhouse Coopers (PwC), nine out of ten of the key barriers to the success of change programmes are people related; only 24 per cent of private sector employees believe change is well managed in their organisations (15 per cent in the public sector) according to Ipsos MORI.

[Price waterhouse Coopers (PwC) and Ipsos MORI]

The need for employee engagement and conscious business more widely in UK:

Gallup suggest that in 2008 the cost of disengagement to the economy was between £59.4 billion and £64.7 billion.

[Gallup (2008)]

The importance investing in everyone, not just leadership:

The IES/Work Foundation report ‘People and the Bottom Line’ found that if organisations increased investment in a range of good workplace practices which relate to engagement by just ten per cent, they would increase profits by £1,500 per employee per year

[The IES/Work Foundation report ‘People and the Bottom Line’]

Towers Perrin in their 2008 Global Workforce Study of employee views found that the top driver of engagement was senior management demonstrating a sincere interest in employee well-being.

[Towers Perrin in their 2008 Global Workforce Study]

Evidence is not the problem, there is so much of it:

The case for employee engagement – there are so many more research findings in the Macleod Report

[commissioned by the Department for Business (BIS) 2009.]

Consciousness is a rare commodity:

Only 10% of Managers take “Purposeful Action” (a powerful combination of focus and energy).  Meanwhile 30% of managers procrastinate, 20% show detached behaviour and 40% exhibit distracted behaviour.

[Sumantra Ghoshal and Heike Bruch]

Pretending to engage employees doesn’t work:

If employees conclude that a manager is just trying to win points by paying lip service to consulting them — and has no intention of acting on their advice — they are likely to stop offering input and, worse, act out their frustration by clashing with their colleagues.

[When Employees Stop Talking and Start Fighting: The Detrimental Effects of Pseudo Voice in OrganizationsGerdien de VriesKaren A. Jehn and Bart W. TerwelJournal of Business Ethics, 2012, Volume 105, Number 2,  Pages 221-230]