If Great Workplace Cultures Outperform the Pack Why Aren’t More Companies Switching?
It’s no secret that when employees can take their whole selves to work, performance exceeds far beyond companies relying on the ‘tell-sell’ and if that doesn’t work, then ‘yell’ approach. Rationally it makes sense, but decision-making isn’t always rational. Employees show up for work with enthusiasm, passion, a sense of purpose and a desire to contribute to a purpose that matters. Until someone tells you you’ve screwed up and never to do so again.
Sadly, the majority of companies remain addicted to quarterly reports like crack addicts unable to see an accelerating world with crisis signs on every corner. Traditional management style, casually known as ‘command and control’, basically says, “Park your passion and energy at the door. We’re busy doing what we’ve always done.”
Disturbing disengagement statistics tell the tale. With 70 percent of employees disengaged, there is plenty of potential being ignored. Transformation of workplaces to restore care is essential. Not the incremental type. It’s way too late for that. I’m talking about radical transformation so that a company regains confidence in its ability to run a marathon while staying flexible. Keeping pace with customer values, needs and expectations while also reclaiming the edge, and swapping out old beliefs is a tall order, which is probably why people prefer to try and control the uncertainties.
Yet if a company knew they were on the brink of failure, the mindset and decision making shift would happen out of necessity. Toyota’s stellar reinvention in the 1940’s and switch to cybernetic principles is a well-known example. The question remains. Why are companies hanging on so persistently to the past? Is the problem complacency or a belief that it’s all under control? Is courage absent? Is it a matter of fixed narrow thinking? Or missing know-how?
I’ve puzzled about the untenable disengagement statistics and have been equally puzzled by the assumption that incentives will fix the problem. It has also occurred to me that management confuses busy, over-tasked employees with engagement. Perhaps it’s time to better understand the role of ‘power of the human spirit.’ After all, when you have a sense of belonging, know you are making an important contribution and feel valued, you’ll contribute full throttle. This isn’t religious belief. It’s been proven in the performance of great workplaces where employees accomplish a challenging goal faster than expected.
Take the case of Novo Nordisk, a Danish global pharmaceutical firm with offices in 75 countries and employing over 41,000 employees. In 2004 they decided to reduce their carbon footprint. Novo Nordisk asked, “How can we save energy and increase profits while investing in renewable energy (offshore wind power)?” and challenged employees to find energy savings to compensate for the expense.
The goal? Cut CO2 emissions by an absolute 10% from global production sites within ten years. Employees loved the challenge and quickly found the savings, achieving the goal in five years. They were empowered to make a difference and the company was able to work smarter without compromising requirements or spending more money.
Novo Nordisk’s sees itself as part of a living system — life itself. Author and investment advisor Joseph Bragdon points out Novo Nordisk’s concern with bio-ethics connects its human health products to the biological health of the planet. Further, “its goal of ‘positive net impact’ seeks to return more value to the earth than it takes in, creating value for its customers.” It’s a management philosophy that includes a major win for shareholders.
“From the turn of the century to year end 2014, Novo Nordisk’s shareholders saw their share value grow more than twelve times. In contrast the share prices of Merck, Pfizer and Lilly (a primary competitor in the global insulin market) all lost money.” (Joseph Bragdon)
In Novo Nordisk, decisions are anchored by values of ecological health, systemic health and financial well-being. Rather than profit being their purpose for existing, an inspiring purpose drives their profit. Everyone gains.
The ideas underpinning the management of Novo Nordisk, and other companies that see themselves as part of a wider living system aren’t new. Just better, more robust and healthier by benefiting the planet, people and prosperity.
The problem is that companies relying on a traditional style of management are ignoring their true performance potential.
What are the signs that a company is clinging to the past?
1. A need to control creativity. One indicator is the collision between a more agile creative approach where co-creating with the customer collides with risk aversion and cost cutting mentality. This doesn’t bode well because creativity is a chaotic process that can’t be controlled.
2. Decisions are based on politics, placing career advancement ahead of the company’s success. It has worked for many a CEO whose pay is tied to shareholder returns. It’s a cyclical trap that leads to death by leaking talent and money, driven by the restrictive notion that the company exists solely to generate a return to shareholder.
3. Management is still telling employees what to do. The paradox is that companies say they want talent, yet insist on telling them how to perform. Give them a compelling enough purpose or goal and then step aside.
4. Single loop learning runs unquestioned. In other words, decisions repeat themselves based on past beliefs and assumptions about how the world works. Companies fall into the rut of recycling the past, so work hard to get nowhere. Constantly questioning assumptions allows you to iteratively adjust.
The level of leadership required to transform traditional management habits demands courage and a high level of self-mastery, or at least the desire to be all you can be as a leader. To identify and rapidly respond to undetected disruptions, companies need all of their intellect, collective intuition and enthusiastic horsepower — without relying on the crutches of authority. Transformational, fully responsible leaders are in short supply.
Can the true leaders residing at every level in companies please step forward? We need you.
Originally posted on the Huffington Post — Great Workplaces June 8, 2015