Tuesday, December 27, 2011

CHANGE change management # 22 in the 2011 all time hits list at TLNT

My son, the budding rock star, is in the other room composing music and studying what he calls "real" all time hits. So he thinks I'm pretty ridiculous calling one of those "boring business articles" a hit - but I will use the word anyway.

In my little world of writing about business, I was just as pleased as a rock star might be to see TLNT today. One of the pieces I wrote in 2011 made it to the TNLT top 30 articles for 2011. The article is about CHANGING change management. When I wrote the article I wasn't sure if it would be well received or massively rejected because I am asking for a change in something that has been well regarded for many years. And that's the practice of change management. The key point in the article is that many of the models and methods used by change management consultants are just way too old. They are not build on the business environment we have today, which can be characterized as very high change and incredibly complex. The old models assume change can be managed, and that's where they start to go wrong. Change is continuous; it does not being and end. Companies that succeed will be, as Ed Lawler and Chris Worley say in their book "build to change."

If you are interested, take a look at the article.

Now... let me answer the really important question you have been wondering about. Who is my rock star son? What band is he in? What music does he play? Just as change management changes, so does the world of music. He's playing a new genre ... yes, things change everywhere, especially in music. No wonder they keep changing in business too.

Steven and his band:

Happy Holidays to everyone.


Thursday, December 22, 2011

Breaking through the Entrepreneurial Growth Ceiling

I'm finishing up a paper that will be published next year. It focuses on something we call the Entrepreneurial Growth Ceiling. The concept suggests that entrepreneurial firms grow until they hit a ceiling. The thickness of the ceiling affects the firm's ability to grow. Thickness = problems to be solved.

What are some problems entrepreneurial firms face?

The obvious one is cash, particularly in today's economy. There are others. In the paper we talk about what they are, and then we examine the initial public offering (IPO) process, which offers money and other resources, as a potential solution for breaking the ceiling. The research shows that firms breaking through the ceiling with a tool kit that focuses primarily on innovation and people (human capital) are more likely to "win" post IPO.

The question I have for anyone readying this is whether you think this new knowledge applies to other solutions? What about mergers? What about raising venture capital money or acquiring funding in other ways? What about strategic self-funded growth?

Do you think investing money in your people and in innovation power firms to break quickly through the growth ceiling? What have you learned? The lessons of the last few years, with uncertainty and recession, may be even more important for people reading this blog.

Thank you for your contributions in advance.

HAPPY HOLIDAYS and I wish you the very best in 2012.

Sunday, December 18, 2011

TurnOver TurnUnder and TurnIn

I recently attended a presentation focused on the topic of employee turnover. As I listened, I kept thinking about how much attention we pay to turnover. This is not surprising as we are seeing renewed interest in reducing turnover because economic conditions are slowly but surely improving in various areas, and employers are worried about losing people. These same employers always have been worried about losing their best people. However, the focus we take is on turnover -the big leaving event. Why????
Turnover is really part of a big continuous variable, and it's way at the end of that continuum and in the negative direction. If we think about what employees do within organizations, they can engage anywhere along the turning continuum. Here are three options:
* TurnOver - they leave. (at the one end, negative)
* TurnUnder -they stay but hide - this is often called "withdrawal" behavior (in the middle)
* TurnIn - they work to become a key part of the organization, and they bring other people along with them, inside the firm (at other end, positive)
What we need is to understand the continuum of events. What makes an employee turnin, turnunder and turnover? Then use that information to continually improve the work environment and ultimately the business.
I've been studying employee energy at work, and over the years have collected over 1 million data points analyzing how energized people are at work and what's energizing or de-energizing them. There are clues to the 'turning' challenge in this work.
* People TurnIn when they feel they are part of something bigger than themselves. There are two interventions that employers can do immediately to improve their 'turn-in' rates:
1. Provide a way for employees, with no fear or risk, to submit new ideas and suggestions. Employees have reported that being listened to and having their ideas acted upon is more powerful than many traditional incentives.
2. Engaging in ongoing, real-time conversations with employees about priorities. I've called these "priority moments." The pace of change at work means that employees are getting bombarded with new work every day, and they just want to know how to reprioritize. Teach everyone how to engage in priority moment conversations.
* From the data we also can identity at least two ways to assure employees will "turn over" and run as quickly as possible away from their company.
1. Ignore problems when they occur; pretend the low performers are really doing ok; ignore bad customer experiences; do nothing when employees are angry and upset.
2. Fail to communicate to the point where employees lose all confidence in the top leadership team, the firm's vision and the people around them. Confidence, we find, is a key predictor of energy, which in turn directly predicts "turning" stage (turned-in, turned-under or turned-over).
* Below are two ways to assure your employees will "turn-under" or hide, try to keep under the radar and avoid being noticed, slowly withdrawing until they finally have time to turn-over.
1. Refuse to hold people accountable. If people are not accountable at work, then keeping quiet and laying low works incredibly well.
2. Provide no means for employees to speak up. People can become invisible and just "get along" fairly easily in this type of environment.
Getting to ideal, with most of your people being at the turned-in stage in the turning continuum does not take a lot of money or effort. It involves listening, interacting, and being agile and even admitting the need to be agile. It involves creating an environment where people are part of something bigger than themselves that they like.
Learn more at www.eepulse.com - articles ,tools and process available for your learning pleasure.

Sunday, December 4, 2011

FROM THE ENERGY FILES: Positive peer pressure helps create a culture that improves employee accountability

As we all get close to ending 2011 and starting up in 2012, there is a lot of talk about how to create a culture of accountability. This goes beyond the subject of alignment. You can provide clearly established goals to executives, managers and employees, but how do you assure that they are accepted and that employees feel and act as if they are accountable for their role in meeting the business objectives?

What we know doesn’t work

For years organizations have been trying to create cultures of improved accountability through rigid employee performance management systems. There is an interesting debate being waged on whether we should even keep doing performance appraisal because managers and employees claim it’s not useful and in fact it may cause more harm than good. On the other side of the spectrum are companies that are trying to formally roll out their business goals to everyone in the organization through formal and informal processes, cascading messages from the most senior levels of the organization to the entry-level employees.

Much of the research that the energy team has done shows that despite the complex efforts to roll out strategies, employees remain confused about direction and how strategy affects him/her. This, in many cases, is because the business environment changes quickly and as a result the business changes what it’s doing, disorienting employees. About 70% of the open-ended comments we receive from clients and in the leadership work focus on direction, with employees and leaders saying that alignment is very difficult because employees are unclear to what they are suppose to align.

Lessons from marketing and social networking such as Facebook

What does work in terms of accountability is positive peer pressure. If one looks to the world of marketing, advertising campaigns designed to create positive peer pressure to purchase items are quite effective. People are accountable to their peers and will pay money to purchase items that let them “fit in” with peer groups, either at work or at school. Facebook is another interesting phenomenon. Users are very accountable to their “friends” and do what it takes to keep up their profile, add pictures, communication, and be part of the ongoing network.

Being accountable because you WANT to be accountable appears to work well. The challenge then is how to create an environment where employees and managers want to participate in a system that holds them accountable for doing work.

Learning from the Energy Files

The energy research proves that accountability increases through positive peer pressure and self-driven accountability, driven through high visibility. Below is a summary of how the process works:

The core of the process is an energy pulsing system that asks employees to provide information on their energy at work and respond to other inquiries. The energy pulsing happens frequently. The Pulse Dialogues (this term is used for the process) match the rhythm of the business. If the organization reviews business data weekly, fortnightly, monthly or quarterly, then the Pulse Dialogues are on the same schedule. Pulse Dialogues are not an event. They are not the annual or every other year survey event. Data from pulse dialogues and the action-taking process associated with it are blended with other business metrics and processes. This puts human capital metrics right into the middle of the business discussions and then taken seriously. Managers are immediately held accountable for their human capital and relational capital assets in the same way they are accountable for other business outcomes (e.g. sales, costs, quality, production goals, etc.).

  • The energy metric is coupled with other custom questions that meet the needs of the business on the day the data is being collected. Every organization using the energy system has a unique, customized metrics strategy that can be adjusted on a moment’s notice to fit changing business conditions. That means managers are accountable not for something set in stone or a set of questions that is being used by the competition but for questions that are important to the organization. During implementations, managers and sometimes all employees are involved in helping shape question ideas.
  • The overall metric strategy is horizontal (questions spread out over time) not vertical (all questions loaded into a once-a-year bigger process). Trend data are collected, pulse dialogues are short and easy to do, and trust is built up over time because employees have experience in submitting data, engaging in dialogues, being part of an action taking process, and learning as recipients of results or news about outcomes.
  • Reporting is frequent and to everyone. If pulse dialogues are done weekly, then reports are delivered weekly; if they are conducted monthly then reports also are provided monthly. The pulsing process is used with all employees, not a random sample. This is because all employees and all managers receive reports. This is what builds accountability. Random sampling results in the HR department or leadership team “owning” the data because sampling does not provide enough people responding to provide reports to all managers. If an organization wants to increase accountability at the line level, then the line needs its own data. Thus, the energy pulsing process keeps the pulse dialogues short, and it provides trend data and regular fast reporting to everyone.
  • Everyone translates to mean all employees. At some time in an implementation, when trust is built, all employees get reports. The energy pulsing process is built to give employees personal reports. Every single employee can see his/her own data compared to the trends for the company overall and for other views of the data (e.g. department, location, occupation). This moves accountability from leadership and HR to the manager and to every single employee. Employees “own” their own data because ultimately employees are responsible for their work experience. By sharing the data to everyone, visibility to problems and opportunities improves. Transparency increases accountability and alignment.
  • All employees use the event log (to track their own experience) and the action-taking module. The words “action taking” are used vs. “action planning” to remove the passive language that is customarily used in employee-driven survey processes. The action-taking module is attached to reports, providing employees with a tool for reviewing actions taken by others and recording their own actions. The system tracks opportunities, actions against opportunities, return on investment (ROI) when an action is closed and/or an ROI story. The stories are powerful, and we find it is the stories that travel from one person to another very quickly. Story telling about successful actions is where the positive peer pressure starts to develop. The ROI stories range from very small actions that may have a $300 benefit to large, organization-wide changes that result in millions of dollars in savings.
  • Everyone can nominate actions as best practices. The process builds heroes, and by this competition for doing your best, accountability takes hold in a positive, results-focused way. Accountability for taking action is not the result of threats; it’s not the outcome of a new compensation or performance management system. Accountability grows out of active, high-energy participation in a process designed to make the workplace better.
  • Accountability and alignment are outcomes of employees networking and taking action to meet business priorities. The organizational objectives are the focus of all this activity because they are at the core of the metric strategy used to power the pulse dialogues, which kick off the interactive dialogue driving action and results.

Barriers to success and barriers to creating a culture with higher levels of accountability

The energy work started in 1996, and we have evolved the process since that time. The research team’s learning is that the process of ongoing pulse dialogues with accountability, alignment and action can work anywhere. Success has been experienced in large, global firms and in smaller, start-up organizations as well as in manufacturing organizations, unionized firms and in organizations in Brazil, Russia, Japan, Spain, the Czech Republic, and 50 other countries. People around the world, in all jobs want voice; employees want to be challenged; positive energy is a universal construct.

What gets in the way of success is not the culture or the employees. The research shows that the biggest barriers to success are the company’s leadership team and in many cases the human resource departments. Fear of the unknown and lack of faith in employees from these two groups (one or the other) leads organizations limiting transparency and visibility, and that kills an accountability initiative. Accountability requires employees having a deep understanding of cause and effect, but if an organization is unwilling to share information with employees, then a culture of improved accountability cannot be built.

Making employees accountable means that first; leaders must be accountable to employees. They must share information, opportunities, and problems and allow everyone to engage in ongoing dialogue about the business and the changing business conditions.

CHANGE Change Management

The art and science of change management is due for a change.

#1 – Quit thinking about change as something that is negative.

#2 – Stop talking about change management as an event.

#3 – Use new models and move away from those based on grief management.

Change Management Roots in Studies of Grief

Many change management models and associated processes are based on early learning from grief management. This work, started in the 1960s and focused on the experience of personal loss (e.g. death of a loved one, experiencing significant health problems, etc.), was used to design interventions and change process to help employees accept change. The assumption is that change is bad; employees need to grieve the loss of their pre-change conditions, and through a drawn-out recognition of how negative the change is, employees can learn to move on.

The reason these models were used by organizations was that consultants saw a parallel between grieving loss in health-related issues and grieving loss of a job, department. The grief models applied to business change worked well when change was an event. One could see a clear starting and stopping point of the change event, and then a path for recovery could be plotted out. This change strategy recognized the full range of emotions laid out in the health-related grief models. The concept of mourning the loss of the prior organization and job was quite useful in helping employees move through change.

Cycles of Change are Different Today

However, what we see today in our Leadership Pulse (www.leadershippulse.com) research and client work suggests that these grief-based models are not appropriate 50 years later. Today, the cycles of change have escalated; there is no ‘relief’ time between change events because business continues to speed up. Leaders, managers and employees need to keep up with the frantic pace of business. Today’s global organization does not have time for the long grief cycle-focused change management processes that the earlier models require. It is time for successful organizations to reinvent change management based on what is known about business in 2011.

Today, things are different:

  • Change is constant.

  • Change needs to be embraced not mourned.
  • Resilient employees who know how to make change work for their own careers will embrace change and thrive with new change making skills.
  • It is critical to learn how to develop organizational and employee resiliency.

Change Lens™ Research

In a new series of studies done with clients and via the Leadership Pulse we examined how employees respond to various types of change using something we call a Change Lens. Measuring employee perceptions of their personal rate of change and the rate of change of the group in which they are working (e.g. department or team), characteristics of successful change management could be modeled. These studies also involved gathering data on employee energy at work, employee engagement, fairness and confidence in a number of business factors. We tracked employee attitudes throughout various types of change processes.

The studies examined conditions under which engagement, energy, perceptions of fairness and confidence improved as change escalated. Comparing perceptions of personal rate of change and department rate of change, the data suggest that employees have the lowest attitude scores when the gap between personal and department rates of change are higher. Regardless of the amount of change reported by an individual employee, if the employee reported his/her personal rate of change to be the same as the rate of change of the department (context), then the scores on engagement, fairness, confidence and energy were positive and high.

Marketing and Sales Models Replaced the Grief Based Models

Employees were positive about change because the models used were different. One of the theories that we use in change management work comes from protection motivation theory. This theory is useful if a change event or ongoing change process is designed to lead to different employee behaviors. Protection motivation theory has been used to develop interventions for large-scale attitude and behavioral changes in other fields (e.g. for people to stop smoking, change habits to improve health, etc.). The core concepts of the theory are:

  1. High emotional charge is needed to get people to listen to the change message. The message must be strong, and it must be targeted or important to the individual.

  1. As you raise the emotional charge (sense of urgency to change), people need to feel confident they can be successful in this new environment. Thus, marketing processes become useful in creating interventions.

Organizations spend millions of dollars on change and transformation efforts. If they can take those resources and use them to build an agile and fast organization that expects change, they can stay ahead of the competition. Money spent on getting through one change does not have as high a return on investment because employees are waiting for the change to be over, and it will not happen; change will continue, and it will come around faster every time.

Benefits of Marketing Change vs. treating it like a Death Sentence

As we analyze data in the firms going through change, organizations that did more aggressive and positive marketing of their change campaigns and that raised the level of positive emotion associated with change did much better. Employees recovered quickly if there were negative spikes, and in many cases, employee engagement, energy, fairness and confidence scores were positively rather than negatively affected by the change mantra.

Keeping all employees focused on continuous change is similar to stressing that people take on health habits vs. kicking the smoking habit only. Employees can be tempted to go back to the status quo (just like smokers who quit can go back to smoking). Thus, surrounding employees with messages about movement, momentum and accepting change is like creating a healthy environment. Employees are emotionally charged to think in the right direction, and they build healthy change-ready habits.

The implications for leaders who want to create agile and fast organizations that sustain high change ready people are:

  • Increase sense of urgency (or high emotions) targeted at being change ready
  • Use sales and marketing models – not grief models
  • Build employee coping skills
  • Target emotion or urgency at the ‘right stuff’
  • Measure employee energy and sense of urgency or readiness for change
  • Use data to constantly retarget the message (just like marketing executives do with advertising campaigns).

    The challenge for today’s leaders is to determine how to keep overall employee momentum and energy moving forward. Grief-based models and tools suggest to employees that change will end, and that is not the case. CHANGE change management starting today.

How often should you survey employees?

People often ask me how frequently to conduct employee surveys. The most popular debate seems to be between doing it on an annual basis or every other year. As our friends at Saturday Night Live would say,


Think about it. Imagine telling your CEO that from now on the management team will only look at the financial data every 2 years. Your argument would be something like:

* It takes so much time to review financials; we should stop looking at them so much and just do it every other year.

* I mean, if we can't make a big impact on the financials from week to week or month to month, then why look at the data?

* Managers don't have time to look at financial data; they are busy doing other things.

Yes, these arguments sound ridiculous. And my guess is that many years from now, when word gets out that inviting employee feedback and reviewing data quarterly, monthly, or even weekly has the SAME EXACT EFFECT ON BOTTOM-LINE PERFORMANCE as reviewing financial, sales, productivity and quality data then looking back at yearly and every-other year processes will make us all laugh.

Today, the enlightened companies that do realize their employee data are important enough to use for overall decision making are indeed laughing - because these "new-age" companies are leaping way ahead of their competition.

You ask how often to survey employees? The answer is how often do you survey other types of data, such as sales, financial or productivity data? I could argue that employee data are actually even more important than these other types of data because people drive sales, productivity, quality and financial output.

Below is the eePulse tip sheet -to help clients think about survey frequently. To learn more, visit www.eepulse.com.

Definition: Pulse dialogue = eePulse's term for short, frequent pulse surveys

The eePulse process requires frequent data collection (weekly, every other week, or monthly are common frequencies). If the frequency is any less than monthly, variation cannot be studied well, and in most organizations, the data cannot be part of the overall internal business metrics system (which reports monthly or more often).

Overall, eePulse’s research and work with clients shows the following:

First, clients can alter the frequency during an implementation. In general, it is better to start out with more frequent dialogues and then “dial down” to a less frequent process. This is preferable to starting out less frequently then “dialing up.” The reason for this is that with more frequent pulse dialogues, everyone learns faster, and it also builds high trust in the process. Thus, when an organization moves to less frequent data collection, the data are high quality and managers know how to use the data. People also get into the habit of responding with a higher frequency start-up process, and it gives them time to learn to trust the process (e.g. it’s confidential).

Second, separate data collection from data analysis. Just because a company collects data weekly does not mean managers have to respond weekly. Consider how often most firms collect data on sales, productivity, and quality. They collect data frequently so that when they sit down to do a thorough analysis they are responding to trend data vs. point-in-time data.

Third, the frequency should fit the following:

Rate of change – the higher the rate of change, the more frequent the process.

Metrics strategy – as a client has more managers asking their own questions, the more frequent the process is preferred because each dialogue still can be short.

Culture, climate and habits – the pulse dialogue is not just a “data gathering” device; it provides clients with an intervention that makes employees feel more valued. When employees are asked to express ideas and opinions, they feel appreciated. The pulse dialogues are a listening device; it’s about interactive dialogues or give and take.

Fourth, clients do best when they do not fixate on response rates. Clients let employees know that the pulse dialogues will be there every week, every other week, etc., and it is ok to not respond all the time. Employees should be encouraged to try to participate in the pulse dialogue process (and encourage them to fill out the quantitative data at least if they have time) but not worry about comments every week. Because variance predicts performance, the more frequent process gives you better predictive data; however, a 100% response rate is not required.
A representative response is the goal.
Learn more about transforming surveys into leadership tools at www.eepulse.com. Presentations at my slideshare account available via the link in this post.

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