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A few weeks ago I spent time with an old friend who worked in a company that by all appearances was a dynamic, successful industry leader: steady profits, stable leadership, healthy prospects, and a supportive board of directors. But if you asked my friend, or likely many of his colleagues, the description of working at this company would be much less positive. In fact, many of them hate going to work, and they spoke of a palpable malaise inside the company. The reason: a detached CEO who is largely dismissive of communication and culture.
This anecdote brought to mind the old medieval adage that as the king goes, so goes the country. It’s pretty well accepted as a truism that CEO’s have a direct and enormous influence on their companies, of course. They direct and deploy workers in an organization much like a general in battle. But the twist in this story suggests that their impact goes beyond the most obvious elements (and requirements) of corporate success – such as organization, logistics, strategy and financial performance. A company (and leader) doing all the basic things right – at least according to the MBA playbook – can still be horrible workplace, with disenchanted and disengaged employees.
According to my friend, the CEO at his company has a blind spot when it comes to communicating with employees – grudgingly allowing only perfunctory, formal outreach and avoiding genuine, personal interaction as much as possible. Probing employees for ideas and opinions is limited to a typical annual “culture survey”, which apparently drives little discussion, response or change. Needless to say, convincing this CEO of potential investment or innovation in communication is a losing game.
The CEO also apparently sees little value in fostering a positive, distinctive workplace culture. Sure, the typical HR activities are in place – ostensibly to motivate and reward workers – but there is no leadership interest in truly exploring and improving worker morale and satisfaction. And the corporate identity is muted and generic, with little to inspire pride or discretionary effort. In other words, employees should do their jobs and be happy they have one. Since this company is located in a relatively small job market – with limited options for senior executives – there’s no immediate risk of an attrition of top talent. And with the company regularly hitting its numbers, the CEO sees no reason to change anything.
This anecdote raises some interesting questions for communication and HR professionals. Does it really matter if employees are happy at work? Is it important for a company to have a distinctive, engaging culture? Is the recruitment and retention of talent really an issue in smaller, stagnant job markets? And what is the ultimate metric for leadership and corporate success?
I propose the answers to these questions all revolve around the central issue of the core purpose of the company. Some would say that making money for shareholders and paying employees for good work is the baseline. I would argue that that viewpoint is shortsighted, and certainly not optimal for talented employees seeking a fulfilling career and perhaps even a higher purpose. In other words, employees don’t just need to know (and believe) what the company does, but what it stands for and what it hopes to achieve beyond driving profits. Without that deeper affinity and sense of purpose, most workers will remain steady (if unspectacular) performers and jump ship at the earliest chance.
A prominent topic for many of us involved in employee communications is engagement. Engagement has become a proxy for everything from evaluating the effectiveness of internal communications to assessing the psyche of contemporary workers. For the past few years, the news about employee engagement has been mostly negative, with the economic downturn making working conditions tougher than ever and employees feeling increasingly overworked and disillusioned. That may be changing. With the global economy slowing improving it appears employee engagement is also slowly turning the corner. Indeed, recent global surveys show some positive trends in employee engagement, with several studies showing slight improvements in overall engagement. Still, the picture is far from idyllic. Despite pockets of improvement there is still a stubborn, sizeable minority of passive or actively disengaged workers; Aon Hewitt puts this at 4 out of 10 workers. And the gap between the best companies (with the most engaged and productive employees) and the global norms is still substantial. Read the rest of this entry »
I was pretty happy to read the dual press statements from Yahoo and Tumblr when they announced their partnership this week. I have to admit in recent months I’ve pretty well given up on press releases – a sterile, decaying art form that is seemingly impervious to innovation and improvement. It’s true that some companies have made their releases more social in recent years, even entertaining, but too often releases are formulaic, devoid of personality and cloaked in vague and trite legal jargon. In other words, they are usually boring, generic and lacking credibility.
In this sorry context come the above mentioned releases. First Yahoo. Right off the bat, you’ve got to give the Yahoo team kudos for featuring the elephant in the room right in their byline – we promise we won’t screw it up. Marisa Mayer’s comments about Tumblr and its CEO David Karp seem genuine and conversational – as if (lo and behold) the quote is actually real. She also acknowledges the obvious – that the two companies couldn’t be more different – but also makes a good case for how they can complement each other. A few other nice touches – the word awesome and an ironic exclamation point - help make the release not just credible, but worth reading. And though the release has some typical verbiage on opportunity and assets, the business case is presented in a way that makes sense.
The Tumblr statement is even more refreshing, and totally in keeping with the company’s smart, rebellious image. David Karp’s blog post is funny, sarcastic and ends with a disarming “F… yeah!” It’s also concise and hits the obvious concerns of his team right at the top. All this and not a legal term or ten-dollar word in sight.
Beyond the initial statements, both teams used their arsenal of social media platforms to get the word out and provide ongoing elaboration and commentary. In the process, they haven’t shied from some of the controversial aspects of the deal (notably Tumblr’s not so secret reputation as a hotbed of porn.)
The lesson here is not that companies need to make their press releases irreverent or informal, but they should remember their identity and their target audiences – which include employees and consumers, not just Wall Street heavies. In this case the tone of the statements seemed entirely appropriate. It helps that this transaction seems to fit with the strategy of the respective companies – Yahoo gets a new potential audience, a boost in buzz and some much-needed hip factor; while Tumblr keeps its independence while benefiting from the huge audience and finances of a large partner. Another point I’ve argued many times with peers and clients is that information that is important – notably in formal announcements like press releases that must be carefully crafted – doesn’t have to be serious or boring. Compelling content that is aligned with readers’ interests, lexicon and media habits is much more likely to be read and believed. Isn’t that the point of releases in the first place?
Keeping employees informed of their company’s financial performance would seem a given. With the explosion of available data online and the increasing mobility of Internet access – which makes financial information readily available – it’s critical that companies proactively keep their employees informed on their quarterly results and investor profile (if they are public.)
For one thing, many employees are themselves shareholders in the company (many through retirement plans) and have a vested interest in the earnings reports. Beyond that, ensuring employees understand company performance, and implications for the business, is important to help them connect the dots between their individual performance and company results. Updating staff on earnings also helps reinforce how the company is tracking against its strategy and business priorities (which themselves need to be explained and repeated) and provides important context for company decisions and policies.
Yet for all that rationale, a surprising number of companies seem to put little or no effort into driving internal financial literacy. [My observation is anecdotal – I can’t find any solid research to back this up.] It’s true that financial information is both complex and sensitive – and not necessarily considered sexy content – and has not historically been part of the communication menu for many organizations. A common challenge is balancing employee interest and understanding on financial issues (which can be very low) with the need for leaders to be transparent and credible. Despite these inherent challenges, companies should err on the side of disclosure; I would argue it’s better for employees to complain they are bored or don’t fully understand financial information than accuse their leaders of not being candid or forthright.
Recycling external earnings content – an apparent easy fix – isn’t enough. Too often companies use materials and tactics aimed at investor audiences and simply share those unchanged with employees. This approach is shortsighted and often ineffective. The internal strategy and content should be customized for employees. Putting thought and effort into regular updates – using some of the best practices listed below – can help companies foster leadership credibility and increase financial literacy among employees. In the long run, this should help increase staff understanding, effort and engagement.
- Be accurate and consistent: The most important factor in updating employees on financial performance is the imperative to be accurate and use consistent figures and messages across all audiences. This isn’t just good communication, but in many jurisdictions it’s a legal priority.
- Avoid the hype: Many employees are cynical and skeptical of financial updates because they are too often overly positive and wrapped in hype – particularly if the messages are geared to investors. Resist the temptation to hold back information when the news is bad, or employees may jump to their own conclusions. To be credible, the updates must be regular, balanced and candid. Leaders can be optimistic and positive, but the core information should be direct and devoid of cheerleading.
- Story behind the numbers: While it’s important to share some of the core financial information with employees, it’s far more useful to share the story behind the numbers – What happened to the key metrics? What drove the results? What does it mean to the business/strategy? What is the internal context for these results (e.g. internal cost-cutting.)? What does it mean for investors/Wall Street or private owners? What does the team need to do as a result? More importantly, show employees how their daily work contributes to companywide growth.
- Provide context: Use quarterly updates – and ongoing staff and department meetings – to share business and industry trends and put them in perspective. This will provide important background for the financial/earnings outreach.
- Segmented cascade: Though it’s appropriate to have a CEO lead the communication effort with the broad workforce (perhaps a company memo, blog post and/or short video statement) that should be complemented by more targeted outreach by functional and regional leaders who can make the information more relevant by adding targeted results for their teams. This approach can/should be used down to the level of manager, who may have information on a factory or facility level that can provide additional detail for employees. This effort should be supported with solid direction and support from Communications (e.g. cascade toolkit) and be coordinated to avoid massive duplication.
- Know your audience: Content should ideally be tailored to the interests, routine and requirements of the various employee segments. Leaders shouldn’t “talk down” to their employees assuming they can’t understand basic financial concepts, but conversely they should consider that many front-line employees aren’t interested in, or familiar with, the nuances of financial results. A good approach is creating core messaging/content that appeals to the majority of employees and adding complementary content for specific internal segments. Senior leaders typically can be expected to receive and understand a fairly detailed and sophisticated earnings update.
- Avoid jargon: Building on the point above, it’s important any financial information for employees be simple, clear and devoid of unnecessary jargon. Terminology that’s important to an analyst is not relevant to most employees.
- Dialogue: In order to spur conversation and provide an opportunity for explanation and discussion, it can be useful to have senior leaders (perhaps the CEO and/or CFO) participate in an online panel/webcast or video interview where the “story behind the numbers” can be explored and employee questions can be addressed. This is particularly true is the financial results are a surprise or disappointing. Latent employee questions or concerns can proactively be addressed in these sessions. The content of these calls can also be promoted and archived after the fact. Similarly, any internal social platforms (Yammer, leadership blogs) should be featured during the financial updates to foster discussion.
- Be timely: It’s good form to inform your employees at the same time – if regulations allow – as the financial update is shared externally. A delay will erode credibility and usefulness of the update.
- Think visual: Some of the most effective examples of financial communication feature simple, compelling visuals (graphs, scorecards, info graphics) to represent key concepts and results. This approach ensures the information is presented in a clear, consistent fashion without being boring.
- Bring the outside in: Though it’s important the outreach to employees be tailored for them, companies should also leverage/promote their key investor events internally through news features, social media updates, links and/or posting on the intranet (e.g. investor days, shareholder meetings, annual reports.)
- Voice of the customer: It can be useful to include comments from investors, customers and/or analysts in the financial updates to provide a third-party perspective on the performance. This can help company leaders to emphasize certain themes or messages with employees.
- Humanize the numbers: Examples and anecdotes that illustrate the company’s performance – for example stories of employees or teams achieving savings or big customer wins – can help humanize the financial results and make the information more relevant and interesting to employees. Having these employees tell their own story is even more compelling.
- Education through repetition: Employees can/should be educated on key terms (EBITDA, cash flow) through simple examples and repetition of these definitions across all references and materials. A glossary of terms should also be easily available (e.g. intranet) and promoted with employees.
- Use sound bites: The use of short summary headlines with links (like Twitter updates used externally) can be an effective way to get out updates to a broad employee audience in a convenient, timely fashion. This allows interested staff to obtain more detail but ensure all staff has some awareness of the key results.
- Think pull vs. push: Though leaders should proactively share (or push) custom highlights of quarterly performance, a good approach to promote transparency is to make more detailed information available to all staff – usually through the intranet and/or press materials. Along these lines, all regional and functional updates (be they presentations and/or memos) should be posted on the intranet for easy access to all employees.
- Communication beyond/after the quarter: Companies should consider reinforcing the key financial concepts, targets and even results beyond quarterly updates via bulletin board scorecards, digital posters or other collateral to reinforce this information beyond the quarterly updates. Use of compelling visuals can help drive awareness, understanding and engagement on these topics.
- Educate staff on disclosure rules and best practices: All updates on financial performance with company staff should include reference to the legal requirements and limitations to ensure employees don’t breach any SEC regulations or company rules (e.g. disclosure of confidential information, media contact). This information should also be easily accessible on a permanent basis on the intranet.
- Foster an ownership mentality: Employees should not be a passive audience when it comes to financial updates. Encourage staff to adjust their priorities and activities given the company’s overall business situation. Invite their input on process improvements, cost-cutting and new business sources. Recognize and reward ideas that lead to greater efficiency and growth.
The recent decision by Marissa Mayer to abolish telecommuting at Yahoo has sparked a firestorm of criticism and debate in social media platforms and executive suites, and put a spotlight on the increasingly accepted practice of virtual work. You can review a good summary of the polemic here. Certainly, at first glance the policy change seems to go against prevailing workplace trends and HR logic – where maximized work-life balance fosters more happy, productive employees. Telecommuting is a growing trend and seems a boon to both employees and companies alike (statistics I’ve seen suggest productivity increases with flexible work arrangements.)
This response - from none other than Richard Branson – is fairly typical of the strong negative reactions to the Yahoo move, which suggest the blunt directive is anachronistic and short-sighted. Some of the criticisms have even questioned Mayer’s feminist bona-fides – such as Maureen Dowd’s column suggesting Mayer’s gilded work arrangement may be clouding her understanding of the needs of other working women. It should be noted not all the comments were negative. Several like this one featured Yahoo insiders who praised the move, suggesting there were too many slackers taking advantage of the loose workplace rules. Other commentators argued that the company’s growth and survival trumps any workplace conveniences.
One of the realities that I found missing in some of the comments is that in all flexible workplaces – in particular those promoting working from home – there’s always been an implied, or formal contract, featuring one or all of the following requirements:
- There’s no blanket policy – Each job/role should be evaluated if and how it lends itself to telecommuting, and in many cases senior leaders or group leaders understand their roles preclude being based off-site for extended periods of time.
- Productivity trumps convenience – If a case can be made the efficiency and output of employees is suffering due to telecommuting, then the policy should be revisited.
- It’s not all of nothing – Most people I’ve worked with over the years operated in a blended routine that includes both virtual work (from the home or other outposts) and occasional face-to-face interaction, such as quarterly meetings or special retreats.
- Circumstances change…and so may your job – Employees must recognize that workplace policies are fluid and can (and must) change to ensure they remain viable and relevant in the context of the company’s evolving performance and objectives. The fact that telecommuting is a policy now is not a guarantee or excuse for keeping it in perpetuity.
In defense of Yahoo’s blanket ban on working from home, many of the negative comments seem to conveniently ignore the company is on a steady downhill towards irrelevance and possible oblivion. Yahoo’s leaders made a strong case that business as usual wasn’t working and dramatic change was required not just to boost productivity, but also collaboration and innovation – both of which benefit greatly from sustained in-person interaction. Furthermore, company leaders are leaving the door open to further adjustments, saying this is the right solution for right now.
As I thought further about this issue, however, I looked at my own situation, where work with global partners via Skype or other interactive platforms is the norm, and productivity rarely seems compromised by the lack of face-to-face interaction. In fact, the inherent flexibility of a virtual team has often been a boon to our performance – with more than one Skype call featuring folks at the breakfast table or quietly baby-sitting their children. Is it helpful to have in-person meetings on occasion? Certainly. But does that prelude a balanced model where virtual work is allowed for more routine work and collaboration. It should not.
In the final analysis, I believe Mayer could have taken a more nuanced, incremental approach, starting with a more disciplined policy and closer monitoring to weed out the worst abusers, but she likely felt that lacked the urgency the dire situation required. Ultimately, I think her blunt approach will backfire – if she doesn’t retreat from the decision altogether. (They left the door open for future changes in the policy, so this is perhaps the most likely outcome.) The unintentional message it sends to employees and prospects is that they can’t be trusted and don’t merit the same flexibility and options that are given to most other technology companies – particularly those based in Silicon Valley. After all, though productivity is certainly paramount it cannot be achieved without employee engagement and goodwill. Given this context, Mayer may win the immediate battle for innovation, but lose the longer war for talent.
Over the years, I’ve had many clients and peers ask me about the best strategy for true, lasting employee engagement…the holy grail of internal communications. Like many, I’d tell them about the importance of two-way communication, robust workplace programs, strong leadership and a vibrant culture. But often I’d also relay my “Amazon” story – which was based on my short but formative consulting stint with the internet giant when it was still a brash start-up.
My Amazon story was about the incredible energy, drive and productivity of their Seattle team despite tough odds, persistent criticism from pundits and brutal, round-the-clock working conditions (this was not a place to ask about office hours.) Sure these guys worked in a funky renovated hospital and defined the casual workplace, but they worked incredibly hard and seemed driven by a greater cause, a belief they were inventing a new business and creating a better customer experience. In hindsight, there were right, and they continue to blaze a path in the evolving world of internet commerce.
The lasting lesson for me – and the point of telling my story to clients – is that doing all the right things is usually not enough to get employees to operate at the highest level, and that the most successful companies are the ones where employees believe their work has higher meaning beyond the obvious imperatives – fill a customer need, sell services or products, make money and please investors. All of us want to do something that really matters, or at least appears to be useful, relevant and timely.
As it happens, I’ve had the opportunity to put this theory in practice in a recent client engagement. This company was in the midst of a classic “transformation” exercise designed to improve efficiency and profits. In short, they needed a major reboot. After months of relying largely on logical arguments and data – the usual practical, empirical rationale for change and list of potential benefits – we started to focus more on the meaning of the company and its unique heritage. Luckily for us, this client was a legitimate pioneer in its industry (helicopter services) and had a very compelling, unique story to tell about getting customers to/from the most remote places on earth safely and on time. In short, this company was cool, did something very special – even dramatic – and had a lineage going back to the creation of helicopter flight. Not surprisingly, this storyline – translated into various media and injected into the brand identity – has resonated much more than the balance sheets and market studies that were initially the focus.
I’m glad to say the smart folks at McKinsey have landed on the same conclusion. This recent article makes a compelling case for why this quest for meaning is critical for tangible and lasting employee engagement. The article acknowledges one of the challenges inherent in this aspiration– some companies will naturally have an easier time identifying and promoting their distinctive pixie dust; either because they are pioneers, uber-cool, game-changers, or have an obvious altruistic bent that fuels that sense of “meaning”. Think Google, Kiva, Facebook, Body Shop or Apple. Much tougher to imagine, and implement, if you work for a company that produces ball-bearings or book shelves.
But the McKinsey folks argue there are strategic steps and tactical tools that can allow even the most mundane, uncool business to foster a sense of meaning among their employees. I particularly like their concept of holistic storytelling, which suggests companies go beyond the typical turnaround or “good to great” narrative – which is inherently focused on company benefits – to encompass other impacts:
Our research shows that four other sources give individuals a sense of meaning, including their ability to have an impact on:
- society—for example, making a better society, building the community, or stewarding resources
- the customer—for instance, making life easier and providing a superior service or product
- the working team—for instance, a sense of belonging, a caring environment, or working together efficiently and effectively
- themselves—examples include personal development, a higher paycheck or bonus, and a sense of empowerment
Ideas like this can provide communication professionals with additional justification, and potential approaches, to foster engagement that comes from deep employee alignment and commitment. When employees are in the zone, as McKinsey says, there is nothing they can’t achieve. It’s our job to help them do that.