Conscious-Business.org.uk

A home for the Conscious Business community in the UK


5 Comments

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]

Advertisements


3 Comments

Conscious HR Part 2

Following on from Conscious HR part 1 of a few days ago, where I explained that Conscious HR is not a one size fits all and is open to individual interpretation, here are some more examples and ideas which hopefully give a feeling of what I am trying to convey. As before, please consider this as thought provoking rather than didactic. Please feel free to challenge me and reprovoke my thoughts!

 Retention

  • Happy colleagues are more likely to stay. Measure the wellbeing of your colleagues with regular anonymous polls – maintain a wellbeing index  that gives an immediate snapshot of what your colleagues are feeling – if it starts to slip, act quickly!
  • Incorporate regular two-way progress checks with each colleague – keep it informal but honest, exploring concerns on an open basis. Whatever you do, don’t go down the archaic annual appraisal route – that is simply too painful and too slow for all concerned.
  • Learning and Development is a cornerstone of  CB – agree group and individual goals and methods which reflect the needs of the organisation and its members. Be realistic and ensure there are checks and counterbalances.
  • Be proactive –  don’t simply apply the letter of the law. I remember an incident at my workplace some 20 years ago –  Paul lost his cool and stormed off site – the classic response in those days was to consider that as gross misconduct and terminate the contract of employment without notice. Instead, I took his manager around to Paul’s house – Paul was eating fish and chips and had cooled down! I offered him the option of returning to work and apologising to his colleagues which he took and ended up staying within the business for another 15 years. We all learned lessons from that which helped us in the longer term.

Redeployment

  • Think of the termination of a contract of employment as a redeployment, regardless of the reason behind it – the colleague in question will be seeking to work elsewhere if not retiring and I feel it is the responsibility of the organisation to help that person successfully redeploy.
  • Sometimes, certain people do not flourish in certain organisations – this can be for any number of reasons. Try to work together to understand why something isn’t working and then fix it. If  the fix is not possible then agree a way forward.

For example, someone may simply have a dream of wanting to work in an entirely different field to the organisation’s area of activity – if the individual has contributed well in the past, why not help them to achieve that goal by talking initiatives such as gradually releasing and even funding them to retrain in other sphere?

  • There will be occasions when a colleague and an organisation are at odds with each other and a recourse to employment law is mooted. Try to avoid this if at all possible but if unable to do so, remain fair, human and always prepared to pick up the telephone to talk – don’t hide behind convoluted documents.

 I am often asked to help in what would be termed ‘tricky’ situations – technically, I am acting on behalf of the organisation but I make it clear from the outset that I will only do what is fair for both parties. During that process I regularly interface with lawyers – regrettably, very few of them on either side of the fence really understand that it is possible in essence to act for both parties in a dispute. (My personal view is that most lawyers are conditioned to be constricted by the law and to apply it robotically and expensively without regard to the human situation in hand – hands up for Conscious Law anyone?!).

I will always encourage an organisation to be more generous than the law dictates – surely it is far better to support the colleague financially than to pay a lawyer a similar or greater amount for applying the law with pressure to avoid such a non-statutory payment?

The irony is in that in order to communicate honestly and to be generous, one has to make initial moves that some employment advisors can try to present in a hostile light – my advice is not to allow fear of the law prevent one from trying to do the right thing.

The key is that at the end of redeployment process, both the organisation and the colleague have parted with a degree of amicability and good feeling, even if both have had to compromise.

Summary

These are just ideas and tips on elements of Conscious HR – some of many ways to make the workplace and the people in it happy, healthy and profitable.

Toolkits anyone?

In a recent meeting of people keen on the principles of CB, I did sense that commencing and travelling the journey can be challenging from a simply practical perspective.

Do you think there would be interest in some  ‘toolkits’ which assist this process? I am visualising some checklists and flow diagrams which provoke thought and simplify action.

This is something that  a group of  us are thinking about creating over the coming months for use in our consultancy lives – would be good to know if there is any interest!


4 Comments

Conscious HR Part 1

Conscious Business (CB) strives to work for the benefit of all stakeholders, or as I have called them previously, interactors.

The colleagues working within an organisation are a key set of interactors  and Conscious HR is therefore a key element of  a sustainable CB – in my last blog, ‘The Transition to Conscious Business’, I undertook to write about this so here goes.

So, what is Conscious HR other than the HR part of an organisation which embraces CB values?

Like any element of a business or an organisation, Conscious HR benefits from an organisational structure but one that allows flexibility, change and the application of ‘conscious sense’.

I like simple, clear systems and prefer to break the HR cycle down into five distinct areas:

  • Recruitment
  • Remuneration
  • Retention
  • Record processing
  • Redeployment  (a much more positive word than ‘termination’!)

It’s helpful to everyone if  all of the procedures and protocols are detailed in a Colleague Handbook which is kept updated – in a format which sets out everything from a perspective that is equally valuable to anyone in the organisation, regardless of their perspective – as an ‘us’ document not an ‘us and them’ document.

Set your stall out at the beginning of the handbook and document: ‘why’ and ‘how’ the organisation has chosen the CB journey – these can just be a series of simple statements but will become entwined in everything that the organisation achieves.

Conscious HR is not a one size fits all and is open to individual interpretation. Let me give you some examples and ideas which hopefully give a feeling of what I am trying to convey – I have stated ‘do’ and ‘don’t’ quite a bit – please consider this as thought provoking rather than didactic. Please feel free to challenge me and reprovoke my thoughts!

Recruitment

  • Use a job description detailing the role and how it can develop, a list of definitely required skills but not a person description – how can one possibly determine in advance what type of person is best at a particular role?

Ask the interviewee how and why they are the person for the role and you may be surprised by the candidate with the most interesting insight.

Diversity within departments and organisations is a proven key to success unless you are running a private army, in which case CB won’t be high on the list!

Celebrate the fact that we are all different and bring something different to the table – the extrovert, the introvert, the white Anglo-Saxon, the ethnic minority, the clean-cut individual and the alternative dresser all bring valuable values to the table.

Remuneration

  • Transparency (internally publishing all colleagues remuneration) may be too much too early on for most organisations but there is a strong argument that a less than opaque system removes a barrier in what is undoubtedly a subject sometimes fraught with petty jealousy and rumour.
  • Perhaps start by seeing individual remuneration as a monetary token of exchange which allows a colleague to live their life outside of work. We all need money but try not to set it as an incentive in its own right – if the ingredients are mutually beneficial, an individual will want to achieve their best for the right reasons, not solely for reward.
  • Group rewards based on the overall performance of the organisation are a fair and transparent way of encouraging a team ethos and perhaps healthier than an individual bonus system.
  • Additional Innovative Remuneration (AIR) is a fun and motivating for all recipients – come up with something which helps to breath the AIR with joy – can be anything –  restaurant vouchers, days out, sports events, ‘free’ afternoons off, books, event tickets etc

 I think that this is probably enough for one post, so will publish some examples and ideas about Retention and Redeployment in a few days time.

Toolkits anyone?

In a recent meeting of people keen on the principles of CB, I did sense that commencing and travelling the journey can be challenging from a simply practical perspective.

Do you think there would be interest in some  ‘toolkits’ which assist this process? I am visualising some checklists and flow diagrams which provoke thought and simplify action.

This is something that  a group of  us are thinking about creating over the coming months for use in our consultancy lives – would be good to know if there is any interest!


9 Comments

Why Consciousness

People sometimes ask me why am I involved with Conscious Business?

I have been involved in business for over 30 years. During that time I have worked with some marvellous people, and in some marvellous groups and companies. And we’ve done some great things.

So the business bit is easy – business is, in my view, simply the best and most powerful way to get good things done.

But why ‘conscious’?

I’ve often noticed that the things that seemed to work really well in those successful groups weren’t the stuff of conventional business or management. It was as if I was operating in a parallel world – that, to me, seemed very different from the conventional one outside.

About 10 years ago I moved to Brighton and helped create the MDhub, a collaboration of local MDs. Working with this group I realised that a lot of them wanted to do things in more innovative, more collaborative, more successful ways, but that they too could only find the one business and management book – the conventional one.

So I started working with some of them to do things in slightly different ways from how they are usually done. Business, but different.

Digging this up is a bit like archaelogy. It is only through uncovering artefacts I can date certain of these activities and things that I started to do differently.

For example, I know it was it 1987 that I learnt some of my first lessons about self-responsibility at work. On my first day of work in my new job at DEC, I was left to my own devices. On the next day too. And the next. It took a while for me to realise that I was meant to figure out what I was meant to do – for myself. Without instruction.

I know that it was during 1997 that I started doing stand-up meetings with teams, because I know that is the year that BBC News Online launched. And I remember the first large team meetings – held in an abandoned studio that had no chairs. Hence it was a “Stand-Up”.

I know it was in early 2007 that I started measuring happiness in my favourite organisation – my family. I got the idea from Paddi Lund – an Australian dentist – and my wife, kids and I measured our happiness daily for some months. I know because I still have the spreadsheets.

Having prototyped (!) the approach the only sensible thing to do was to start trying it out with the businesses I worked with.

The financial crash of 2008 certainly isn’t too far back to remember. The crash accelerated the number of MDs, and people from other fields, calling out for different, more effective ways to do business and management. The trend was already clear by then, and it wasn’t just financial. Bigger social trends such as the feminisation of the workplace were already well underway.

So working with my partners we’ve continued to develop and deliver new and different ways of doing business.

But why consciousness? Looking back the key to change in all the outfits I have worked in has always been a change in the level of consciousness, first with individuals, and then with the group.

By a change in level I don’t meant anything esoteric. Or spiritual.

I mean something quite simple to understand. But hard to achieve in practice. I mean a change in my assumptions, a shift of paradigm.

I don’t know how many levels there are.

But I do know that my experiences of 1987, 1997, and 2007 were all about increasing my consciousness and those of others.

In 1987 I learned first-hand that business worked better when I and others chose what to do.

In 1997, standing up, I and others learned that meetings weren’t the be-all and end-all of getting things done.

And in 2007 I realised that measuring happiness every day – paying attention to it – actually seemed to change my level of happiness.

There are many ways to ‘do’ change in organisations. Change is often approached like a technical problem, as if a company was a machine that could be prodded and pushed into action. Much is ‘technological’, believing that new technologies will somehow drive changes in behaviour.  Some change is ‘structural’ – change what is connected to what and things will get better.

In my view all of these work to some extent. But the thing that makes most sense to me is increasing consciousness. To me changing, and developing and growing, in fact, maturing, seems to me to be the only thing that really changes things sustainably and reliably.

I am not saying it is easy. It has taken me these three decades to make even a few real steps forward. And I often step backwards too.

But, personally, I find the process of growing my consciousness terrifying and fascinating in turns, and ultimately deeply rewarding. We get better things done, and it is more enjoyable.

That is why I choose to work in Conscious Business.


Leave a comment

Great leaders, great groups

A recent contact pointed me to a great little book on leadership by Steve Radcliffe.

It’s short, very clear, and very aligned with the way I understand leadership. I have written before about the need for us all to lead, but I only wish I could put it across so succinctly.

Of course, it’s only a book, and can’t really give a full sense of what it is like to live in a real life, or in a real group situation. But the central tenet – that we benefit by becoming more conscious of how we behave, what we think, and what we assume – is very dear to my heart.

The book also suggests this idea can be carried into teams, and again I completely agree. But borrowing from the great Ed Schein, I think there are even more fundamental things we need to build into our groups and teams, namely an understanding of:

  • Who am I? What is my role to be?
  • How much control/influence will I have?
  • Will my needs/goals be met?
  • What will the levels of intimacy be?

These are really great ways to access the dynamic of a group. If you are in a group and answers to these questions aren’t clear, then I’d suggest asking again, and again, until they are.

But why doesn’t every group automatically provide good, believable answers to these questions?

I believe it does indeed relate to leadership. Personal leadership. The responsibility of each of us to manage ourselves, our own emotions, our own impact.

To my way of thinking group culture is no more than the sum of how all the people in a group lead. That aggregate is what creates a situation, or maintains one, where we do – or don’t – get answers to those questions.

It is, ultimately, how we all lead that makes the difference.