24 Jan The IPS Principle. Why Some Companies Stand While Others Crumble
A lot of organizations will conduct their version of the annual employee survey sometime this year. It’s sort of like the swallows returning to Capistrano or the vernal equinox – an expected part of the natural world.
You can predict the standard questions that will be asked in the “confidential” survey – the external firm that will gather the data – and the sequence of events that follows. Here’s the probable course (and it will vary by company and industry).
- A company wide pronouncement of the findings – celebrating the progress and noting the opportunities around people and culture
- The requisite flurry of activity that follows – to include:
- Some kind of mandate for action
- A hurried rush to convene task forces
- Stage presentations/TCs/Webcasts that signal a new era
- Three months later most of those task forces will be forgotten, the day-to-day business will have come back to center stage, and the rest of the year there will be (at best) only a perfunctory attempt at building sustained progress – until next year when the process repeats itself.
If it doesn’t then count your company in the favored minority – Gallup suggests most organizations are losing millions because of employee disengagement – and are only modestly aware that even minor improvement can add significantly to their bottom line. Gallup’s projections around the precipitous risk surrounding the next great generation (our millennials) reinforces that those companies who remain blind are destined to stagger and fall.
We are losing the fight for the hearts and minds of employees – while many companies weave a narrative that rivals the apocryphal story of Nero – fiddling while Rome burns.
Straight talk – The greatest driver of organizational success is not product, pipeline, strategy, or execution.
Which takes us to the IPS Principle. I.P.S. stands for the age-old advice many companies – and many senior leaders – have limited appreciation for:
IT’S PEOPLE, STUPID.
Build a company of motivated employees who have purpose in their professional lives, feel respected, enjoy some level of autonomy, and a great many more organizational sins can be forgiven.
With apologies for the somewhat overstated descriptor, the reality is that in an era when every available study points to the same malady, few companies seem willing to confront the issue of employee disengagement – or to take real action on employee burnout.
Why? Here are six reasons that stand out.
- There is no agreement a problem exists. Like the weather and world hunger, a great many companies assume employee malaise is part of the natural order of things – “it’s either impossible to affect or too big to tackle.”
- Few recognize the cost to the bottom line as regards employee burnout. Every day senior leaders and marketers step over the dollars of an engaged employee population to pick up the pennies of a revised brand strategy.
- There is no guiding coalition to truly assess the problem – instead, most Engagement Surveys are handed over to Human Resources – the logic, “this is not my shop…. let the people who handle personnel stuff deal with this.”
- There is no sense of urgency. No one has taken the time to assess the crisis or the devastating cost of simply maintaining status quo (translation – doing nothing at all.)
- There is no vision of what could be. Truly great companies always embrace a simple principle – They work daily on building a place people want to be a part of – not just work at.
- There are few leaders equipped to really address the issue of people. The reality is most companies are over-managed and under-led, and addressing employee engagement requires transformative leaders willing to step up and step out. In a world of transactional management, transformative leaders are rare.
And here are the factors that complicate the matter still more.
- Companies that cut employees with a level of regularity that rivals the spring thaw. Downsizings do more than affect the bottom line – they erode employee faith in the future. Trust is a powerful human emotion. So is cynicism.
- Migratory senior leaders – committed to hitting the quarterly goals that will ensure their bonus check – but with little to no interest in cultivating a culture that will withstand the test of time.
- Employees who grow tired of the “corporate speak.” Callused to the above points, sometimes even the most passionate of career soldiers can and often do surrender.
So, if we assume even a part of the above is very real, what are definitive steps a progressive company can take to actually begin to build sustainable improvement in employee engagement and the organizational culture? Here are Five Steps that are critical (and yes, Step 5 requires commitment.)
- Get agreement a problem exists
- Quantify its costs – in terms of both people and profits
- Agree on what can be – present state versus future state
- Make the plan to affect change more than window dressing for the next national meeting
- Get started…which takes us to the meat of why many companies flounder. Getting started can and should involve the following eight dimensions:
- Assign a senior leader full accountability for Employee Engagement – and give that individual the resources and corporate support to actually affect change.
- Establish a sense of urgency that makes clear to the organization the:
- Scope of the problem and what present state really looks like
- The cost to individuals
- The cost to the organization
- The WHY behind the need to take action
- Build a stakeholder coalition charged with owning the initiative – to include legitimate representation from all levels of the company.
- Aggressively address line leader accountability and skills. The data is compelling when it comes to the greatest single determinant of employee engagement – the boss they report into is far greater than any other factor. This means you either build a best in class leadership team or NOTHING you do on the following points will gain traction.
- Mutually build a vision of what “can be” versus “what is” today – and the strategies and plans that will ensure movement, not mindless dialogue.
- Engage people at all levels in the plans/solutions. A team of ten, twenty, or thirty will have no impact on a large company – the goal is to get an organization pulling on the same rope and in the same direction.
- Constantly work on creating an environment that does two things:
- Honors and respect the value of the individual – to include:
- Open communication channels
- Dialogue and not monologue
- Acknowledges and celebrates progress/short term victories – and assess and correct as you move forward
- Honors and respect the value of the individual – to include:
The IPS Principle is timeless – and yet often forgotten. Even the 20th century guru of business strategy, Peter Drucker, understood its power when he said, “Culture eats strategy for breakfast.”
Annual surveys quantify a diagnosis most companies and virtually all employees already fully understand.
The diagnosis is the easy part – it’s the treatment plan that affects a cure.