Stakeholder Magazine - 2009

Creating value for customers, employees and shareholders

EMPLOYEE SPECIAL Delivering results on and off the pitch at Manchester Utd

January 2009 £4.50

COMPANIES IN THIS ISSUE Manchester United FC Southern Housing Group Hewlett Packard Norwich Union O2 McLaren Innocent Drinks John Lewis

UKCSI RESULTS

HR Awards Employee Engagement Emotional Intelligence

EMPLOYEE ENGAGEMENT STAKEHOLDER ANALYSIS “SOCIAL INTELLIGENCE” UK CUSTOMER MANAGEMENT CONFERENCE

The Together Company Rewarding what matters most to people and organisations

Learn how reward and recognition strategies can help your organisation work smarter, satisfy customers, generate profits and growth, encourage people to think like owners and create a great place to work. Learn how to become a Together Company.

£19.95

“I really enjoyed reading this book, the topics of which will be of extreme interest to HR practitioners and business leaders.

Topics are approached in a systematic and balanced manner. I commend Raymond Robertson’s flexible attitude of recognising that one size does not fit all and that different circumstances will attract different reward solutions.”

Roberto Ponte Worldwide Compensation and Benefits and North EU Human Resources Manager Infineum International Ltd

incl P+P

Order your copy at www.leadershipfactor.com or call 0845 293 9480

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Diary Dates

Training courses and Conferences from the UK and America.

7 News Tips for recession beating

January 2009 23 Case Study Ray Robertson tells us why conventional wisdom applies even at an unconventional time.

Employee Engagement

8 Case Study

27 Conference

Manchester United’s Anthony Lawler tells us how the club delivers results off the pitch as well as on.

Sarah Stainthorpe reports back from this year’s UK Customer Management Conference.

29 Employee Rachel Davies has powerful thoughts on Employee Engagement.

12 Latest thinking

33 Latest thinking

Mark McCall reveals more findings of new research on employee engagement across the UK.

Rachel Allen continues her look at new techniques for deciding who your stakeholders are and how you should treat them.

37 Fast Guide

18 Conference Nigel Hill reports back from the Leaders in London Conference.

In this issue...

VOLUME 6 ISSUE 1

Emotional Intelligence

38 Book Review Social Intelligence by Daniel Goleman.

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January 2009 Stakeholder

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Customer Management Training Courses 1 day training courses ÂŁ325 + VAT

Customer Surveys Customer insight starts with feedback from customers. This practical step by step course covers devising, implementing and analysing customer surveys, plus producing actionable insight to improve the customer experience, customer satisfaction and customer loyalty.

Complaints Management Ideal for people running an existing complaints management system or implementing a new one. Topics include service recovery, ways of measuring performance and moving complaint handling up the company agenda.

London: Mar 3rd, Apr 28th, Jun 24th Manchester: Feb 4th, May 13th, Aug 12th Bristol: Feb 24th Birmingham: Feb 3rd, Apr 1st, Jul 1st

London: Feb 19th, Apr 21st, Jun 23rd Manchester: Feb 26th, May 14th, Aug 11th Birmingham: April 2nd, Jun 30th

Advancing the Service Culture

Improving Customer Satisfaction

Motivate your customer contact staff to deliver a great customer experience. Anyone who works in customer service will come back full of ideas as well as a personal action plan for implementing them.

This thought provoking course is full of ideas, techniques and case studies.

You will learn how to sell customer satisfaction to senior management, how to involve colleagues, how to make customers notice your improvements and much more.

London: Mar 5th, May 12th Manchester: Apr 2nd

For more information or to book a place: Contact Ruth on 0845 293 9480 www.leadershipfactor.com

Manchester: Feb 25th, Jul 1st London: May 21st Birmingham: March 10th

Nigel Hill editor

In a recession you want to keep your top talent as well as your customers.

That’s why Jack Welch spent 75% of his time at GE helping his top people to perform better, why Richard Reed of Innocent Drinks advocates ‘recruiting the best people that match the values of the business, then do all you can to engage them’, and why Charlie Mayfield of John Lewis Partnership enthuses about the Employee Value Proposition. For these and the thoughts of other Leaders in London, see page 18.

That’s why Southern Housing Group has its ‘Brick Plan’ development and reward scheme for employees in the Customer Service Centre, and why several of them have progressed into more senior housing roles within the Group. See Ray Robertson’s article on page 23 for more details.

That’s why Molson Coors invested in improving employee engagement and as a result saved $1,721,760 in safety costs alone. Rachel Davies elaborates on page 29.

That’s why at O2 all managers have an employee satisfaction measure as part of their annual bonus. See Sarah Stainthorpe’s article on page 27.

You don’t often associate football clubs with the latest business management techniques, but Manchester United is one club that puts as much effort into motivating its top talent off the pitch as it does on it. That’s why it introduced the UNITED Vision and Values, the ‘going the extra mile’ award for outstanding performance on a specific project and the ‘high performance’ award for consistently strong contribution throughout the year. That’s why the Club introduced its Performance and Development Review Process and why all employees are rewarded with a free trip to any Cup Final that Manchester United reaches, even if it’s in Moscow. For details see Head of HR, Anthony Lawler’s article on page 8.

And to check out the football allegiances of all the contributors to this magazine see their biographies along with each article!

Best wishes Nigel Hill

Stakeholder Satisfaction is the magazine for people who want their organisation to deliver results to employees, customers and any other stakeholders as part of a coherent strategy to create value for shareholders. We publish serious articles designed to inform, stimulate debate and sometimes to provoke. We aim to be thought leaders in the field of managing relationships with all stakeholder groups.

Our people and their favourite football teams:

Editor:

Nigel Hill (Manchester United) Production Editor: Chris Newbold (Manchester United) Rob Ward Designer: (Ossett Town)!!

Creative Director: Rob Egan (Liverpool) Daniel Hodgson Advertising: (Blackpool)

Printers of Stakeholder Satisfaction (Fabio Capello’s Barmy Army)

www.stakeholdermagazine.com info@stakeholdermagazine.com Stakeholder Satisfaction PO BOX 1426 Huddersfield HD1 9AW Tel: 0845 293 9480 NB: Stakeholder Satisfaction does not accept responsibility for omissions or errors. The points of view expressed in the articles by contributing writers and/or in advertisements included in this magazine do not necessarily represent those of the publisher.

Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without prior written consent of the publisher.

Copyright © STAKEHOLDER SATISFACTION 2009

ISSN 1749-088X www.stakeholdermagazine.com

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Diary Dates

Diary dates COMING UP IN 2009 Strategic Talent Management Summit

People Development Summit 2009

9th – 12th February Stockholm

11th – 13th March Madrid

The theme of the conference is “Driving Strategic Change through Cutting Edge Talent” and the event covers topics such as talent identification and assessment, executive leadership development, proactive succession planning and employer branding. There are speakers from many prominent organisations including Rolls Royce, Siemens, Hilton, Marstons, and Skanska.

For more information go to: www.talent-management.se/

The People Development Summit offers HR professionals from the UK a unique opportunity for focused business networking. This is an event that is effectively funded by suppliers, so HR professionals go free. It comprises a series of short meetings with suppliers, who you can select beforehand, together with some seminars plus entertainment, wining and dining in the evenings.

For more information go to: www.summit-events.com

Improving Employee Satisfaction & Engagement

Advancing the Service Culture

22nd April London Cost £325 This one day training course begins with an explanation of how Harvard’s ValueProfit Chain principles can be used to drive employee satisfaction and its downline consequences of customer satisfaction and profitability. To follow Harvard’s advice and ‘deliver results to employees’, organisations have to be world class at using employee surveys to understand what matters most to employees, to monitor the extent to which the company is meeting their requirements and to identify specific, actionable priorities for improvement. The course covers best practice employee surveys as well as using the results to drive forward employee satisfaction and engagement.

For more information call Ruth on 0845 293 9480 or check out: www.leadershipfactor.co.uk/products/d etails/2030.html

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5th March | 12th May London 2nd April Manchester Cost £325 Without the right mindset, organisations will never deliver a consistently flawless customer experience. This is a highly motivational 1 day training course to help organisations build a genuinely customerfocused culture. Delegates leave full of ideas to build a service culture where staff automatically put themselves in the customer’s shoes and ‘turn customers into advocates’.

For more information call Ruth on 0845 293 9480 or check out: www.leadershipfactor.co.uk/products/d etails/7201.html

HRD 2009 21st – 23rd April London Aimed at people and organisational development professionals, the conference focuses on five key areas: · Organisational development · Coaching · Talent management

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· People development · Learning delivery It features over 40 seminars delivered by HR and business speakers.

For more information go to: www.cipd.co.uk/cande/hrd

Employee Engagement Surveys 16th June London This half day intensive briefing will cover leading edge thinking on how to develop, implement and action an effective employee engagement survey. The briefing will explain how to collect information on ‘emotional engagement’, ‘cognitive engagement’, ‘physical engagement’ and ‘vocal engagement’ as well as calculating and benchmarking a net engagement index and identifying specific priorities for improvement. The findings of original research into employee engagement in the UK will also be shared. With only 33% of UK employees engaged, this is a must attend event.

For more information call Ruth on 0845 293 9480 or check out: www.leadershipfactor.com

CIPD Recruitment and Retention Conference 17th – 18th June London Given the current economic climate it is essential to recruit the right candidates and improve retention across the organisation. Expert speakers and leading organisations will provide practical advice and share how they manage their recruitment and retention. Issues covered include the latest challenges and trends, enhancing your online presence, employer branding, flexible working and creating cultures of engagement.

For more information go to: www.cipd.co.uk/cande/arrc/

News

news

The full list of winners is:

Tips for recession beating Employee Engagement Award: Heart of England NHS Foundation Trust

Here’s advice from Mark Tucker, CEO of Prudential, Carolyn McCall, CEO of Guardian Media Group, Philip Rosedale, Founder and CEO of Second Life and Steve Tappin, author of ‘Secrets of CEOs’.

1) Be very customer-focused, making sure above all that you keep and develop your existing customers since winning new ones will be more difficult and costly than usual.

2) Have a team of leaders at the top who work together, not just a lone CEO. 3) Have some non-financial goals such as customer satisfaction, employee engagement and market share so that everyone can get behind an achievable goal even if sales are falling.

4) Cash is king so conserve it. One great way of doing that is to travel less. Use conference calls or video conferencing to save the environment as well as time and money. (See next note on this page).

5) Combat the gloom by introducing some extra things to have fun at work, e.g. celebrating the achievement of non-financial goals.

6) Be innovative, perhaps by giving employees a percentage of their time to work on innovation or improvement projects. This can provide some good non-financial goals such as number of new products launched or percentage of sales from new products. It can also help with the next point.

7) Have a plan for how you will come out of the recession stronger. If you have cash it’s a great time to buy a struggling competitor. If not, you could aim for stronger customer loyalty, a better website or new reward strategies for motivating and retaining top talent.

Talent Management Award: Mouchel Reward & Recognition Award: Thorntons Employer Branding Award IHG

Travel less and save your marriage According to a survey from The Business Travel Show, 37% of business travellers cheat on their partners while they are on work trips, with 8% claiming to have joined the mile high club but not with their regular partner. In terms of travelling less, only 20% said they would be cutting down on business trips though 42% now have tighter spending controls while away.

Luckily they’re a frugal lot. 56% of business travellers never leave a hotel room without removing the complimentary toiletries and 23% have ‘accidentally' packed guest towels or dressing gowns.

Business Partnering Award Pfizer UK HR Through Technology Award NHS Employers Diversity in the Workplace Award British Gas Services Business Improvement Through People Award Harrods Health at Work Award Chorley Borough Council HR Impact Award Thorntons Innovation in Recruitment & Retention Paul UK

2008 Personnel Today Awards Trophies were awarded at a glittering ceremony on London's Park Lane at the end of November with McDonald's scooping the overall award, Helen Giles, of charity Broadway Homelessness & Support, named HR Director of the Year and Thorntons winning two awards.

Excellence in Training Award B&Q HR Director of the Year Award Helen Giles - Broadway Homelessness & Support Best HR Strategy McDonald's Restaurants

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Case Study

Delivering results on and off the pitch Anthony Lawler Manchester United FC Anthony is Head of Human Resources at Manchester United. He has worked there for 11 years, experiencing the company as a PLC and now back in private ownership. He is responsible for HR across MUFC's commercial functions, corporate services, venue operations and MUTV as well as the football club. When not on a busman's holiday watching the Reds, Anthony is partial to a bit of golf.

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Being successful off the pitch as well as on it requires Manchester United to have employees who are as committed to the success of the company as the players are to winning the Premier League or a major Trophy. To generate this level of motivation, the business has to make sure that employees feel valued. They need to know that their efforts to deliver results for the company will be reciprocated in the company’s efforts to deliver results to them. The starting point is the company’s willingness to listen to employees, to take their views seriously and to take action, where necessary to improve employee satisfaction.

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Case Study

Listening to employees

Induction

Manchester United is currently organising its fourth employee satisfaction survey.

Conducted by specialists in satisfaction measurement, The Leadership Factor, the survey is based on employees’ 24 most important requirements. These include soft factors such as ‘friendly working environment’, ‘approachability of my manager’ and ‘being proud of my job’ as well as more obvious employee requirements such as ‘pay’, ‘pension scheme’ and ‘Job security’. After each survey The Leadership Factor has made clear recommendations for improving employee satisfaction and because it has acted on these, Manchester United has improved its employee satisfaction index each year and is well up in the top quartile of UK organisations on employee satisfaction.

To see how this has been achieved, let’s look at things through the eyes of a new employee.

Like most organisations, starting work at Manchester United begins with an induction to make new recruits feel part of the family and to make sure they understand a few key things: · How employees behave, based on the ‘UNITED’ values · How they are rewarded; pay and benefits · How they are judged and how they can increase their performance.

Just to make sure they haven’t forgotten that they’re actually working at Manchester United, the newcomers are now taken on a tour of the stadium to admire the museum and trophy room, inspect the changing rooms and sit in the dugout to experience Sir Alex’s view of the pitch.

Coming gently back down to earth, the induction now continues at departmental level. Here they meet their line manager and are introduced to their colleagues, have an explanation of how the department works and taken to lunch in the staff restaurant.

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Case Study

How employees behave A past employee satisfaction survey asked employees for feedback on the Vision and Values. Two thirds of the permanent staff stated that the Vision and Values do help them to understand the company’s goals and priorities.

The UNITED Vision and Values Vision: “To be the best football club in the world both on and off the pitch.”

Values: “Incorporate how we intend to operate on a day to day basis, they are at the heart of everything we do, they are a mix of the traditional behaviours that have built Manchester United into what it is today, a successful and professionally run football club.”

United… with our fans in our commitment and passion for the club Non-discriminatory… in making Manchester United accessible to all, irrespective of age, race, gender, creed or physical ability

Innovative… in our ambition to be ‘first to the ball’ at all times Team-orientated… in our desire to work together with the same dedication displayed in every game by our first team squad Excelling… in our aim to be world class in everything we do Determined… in our pursuit of success while being accountable for our actions.

How employees are rewarded: pay This is a key part of our new employees’ induction and has been one of the main areas addressed by Manchester United as a result of the employee satisfaction survey, which demonstrated that many staff didn’t understand how their annual

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salary review was determined. As well as detailed explanations of the reward system in the RedLines employee newsletter, two new elements were added to the pay review process. In addition to the basic pay review (all employees receiving the same percentage increase to base salary) and the profit share bonus (2.5% of all operating profit above budget EBITDA is distributed to all eligible permanent employees as a percentage of salary), employees can now earn additional increases to basic pay for outstanding performance or extra responsibility. Awarded at their manager’s discretion, extra responsibility includes changes in the employee’s role or responsibilities but also takes into account staff who have developed their skills, knowledge or behaviours to such an extent that their contribution to the business has now significantly improved.

Our new employee would hopefully also be motivated by the fact that outstanding performance can now be recognised by a ‘going the extra mile’ award of up to £5,000 for achievement in a specific project or activity or a £1,000 net ‘high performance’ award for consistent outstanding performance throughout the year. Nominations for performance bonuses are made by the relevant Executive Managers and approved by a Remuneration Panel including the Chief Operating Officer, Head of HR and chaired by the Chief Executive.

How employees are rewarded: benefits All permanent employees are entitled to an impressive range of benefits including a contributory defined contribution group pension scheme, life cover of four times basic salary, income protection, sick pay and holiday entitlement. Manchester United has also stayed true to its paternalistic heritage by retaining its fully subsidised staff restaurant. Employee satisfaction with the pension scheme has shown one of the biggest increases across the 24 requirements. Our new employee could also take advantage of perks such as free access to MUTV and various discounts offered via Club Sponsors/Partners.

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TO BE THE BEST FOOTBALL CLUB IN THE WORLD BOTH ON AND OFF THE PITCH. How employees are rewarded: recognition Here’s the exciting bit for any new employee at Manchester United - recognition. Some recognition measures, such as company events to celebrate success, have been part of employees’ total reward package for many years. If the team enjoys success it is good for revenue but places more demands on staff as more matches will be accommodated at Old Trafford. To recognise their extra efforts, all employees plus their guest have been invited to company events in celebration of this success. Newly introduced recognition schemes include the Christmas Party and the end of season ‘Party on the Pitch’, which our new employee can enjoy with his whole family. There is also the established ‘VIP Employees of the Month’ scheme for ‘living the UNITED values’. All monthly winners attend a premier league match as guests of the Directors, dining in the VIP suite and watching the game from the Directors’ Box. Nominated by employees from the monthly winners, the first Employee of the Season, Tony Sinclair, received his trophy on the pitch at the Tottenham home game in front of a capacity crowd and millions of viewers on Sky TV. Tony, who works as Head Groundsman received his award for con-

Case Study

sistently displaying excellent levels of performance and ‘Living the United Values’ day in, day out. There is also the new SAS (Sports and Social Club, named by the staff), which the company subsidises.

Amongst other staff events it organises staff football matches at the end of the season on the Old Trafford pitch, 5-a-side football, mixed netball, badminton, circuit training and ‘legs, bums and tums’ sessions. If our new employee is less worried about health and fitness, there are quiz and curry nights, trips to the races etc!

How employees are judged Following the first employee satisfaction survey, Manchester United introduced its PDR (Performance and Development Review) Process. All permanent employees received training on the process and managers were trained on how to conduct annual reviews. The first goal of the PDR process is to link individuals’ objectives to their department’s objectives which, in turn, are aligned to the company’s strategic objectives. The second purpose is to enrich employees’ working

life by encouraging them to identify personal development goals and by providing the necessary training or guidance to help them achieve their goals.

The PDR process has been a great success. Over the years, the biggest increase in employee satisfaction has been with ‘regular review of my performance’.

Personal development In most SMEs the opportunities for promotion are necessarily limited compared with those in large companies with thousands of employees. This is exacerbated at Manchester United by the very low employee turnover rate. Whilst the company makes every effort to promote from within whenever possible, most employees recognise the limited opportunities for formal promotion as a fact of life if they choose to stay at the Club. This is why it has been so important for Manchester United to maximise employees’ opportunities for personal development and to introduce the performance-related reward and recognition schemes referred to earlier.

Caring and Community All employees everywhere want to feel that they work for a caring organisation: one that cares for them and for its local community. Manchester United provides its employees with specialist counselling and support where necessary, it has a qualified counsellor in its HR Team, a Club Chaplain, a health and fitness scheme, and, as we have already seen, a great induction scheme to make our new employee feel welcome.

The Manchester United Foundation’s support for charity and the local community is legendary. Our new employee would soon get to hear about the Club’s strong links with UNICEF. At the Players’ Player events in recent years, for example, all proceeds went to charity. Players often make personal appearances for charity and signed merchandise is frequently donated to charities. All charity work is co-ordinated by the Manchester United Foundation, which also organises an extensive Football in the Community scheme to give thousands of local youngsters the opportunity to develop their footballing potential. MUDSA (Manchester United Disabled Supporters’ Association) organises free match tickets for its members and their carers, all housed in the recently refurbished disabled section of the stadium. The Club also fosters extensive educational links, investing in its own Curriculum Manager in the Club’s museum, plus a second Educational Officer employed by the local authority but based at Old Trafford. Both work full time on using football and Manchester United to increase local children’s engagement with the educational system.

As well as realising that Manchester United is a caring organisation, our new employee would hopefully soon realise that the company consults and listens to its employees and takes action to address areas of concern. At least that’s what the rest of the workforce think. In the last employee satisfaction survey, 84.1% were satisfied that Manchester United had taken positive steps in addressing feedback from the previous survey. S

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Latest Thinking

Drilling down into employee engagement Secretary of State for Work and Pensions, John Hutton said recently that “The most successful companies recognise that their employees are their most valuable asset. Employee engagement is not just a buzzword – it has a clear link to increased business success”. And there is growing evidence that business leaders are not simply paying lip service, they’re actually walking the talk. Nowadays, most companies do agree that engaged employees – those willing to ‘go the extra mile’ – can have a very strong effect on the success of a business and so are seeking effective techniques that will allow them to build engagement.

The most successful companies recognise that their employees are their most valuable asset.

Employee engagement is not just a buzzword – it has a clear link to increased business success.

Last September’s Stakeholder Satisfaction article explained why ‘engaged’ employees (those who desire to work to make things better and perform at consistently high levels) should be valued above all others, and emphasised the importance of being able to see what motivates and drives these employees. It explained how employee engagement can be measured, and in doing so how we can gain the knowledge required to get those who are less engaged to change their ways.

tions from senior management about vision, values and strategy will be essential.

For other organisations pay may be viewed as a motivator, although this usually only works up to a point. Most people become concerned only if their pay is not competitive with that of others doing similar work.

Other factors that drive engagement include training and development and promotion opportunities but these can be undermined if employees perceive things are not fair or there is a lack of even-handedness in the way managers behave.

The drivers of engagement Variations in engagement drivers Mark McCall The Leadership Factor Client Manager markmccall@leadershipfactor.com

Mark works with a varied group of clients such as Visa, Tarmac, Ferrero, William Jackson and Johnsons.

When not helping his clients to improve employee or customer satisfaction, he spends his time watching Manchester United win football matches.

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It’s absolutely vital to remember that different factors work for different people so every company should aim to discover what drives engagement in its own organization. For example, in some organisations, such as the caring professions, staff may already identify closely and feel emotionally attached with what they are doing and see their work as having a much broader purpose and value. For many other organisations emotional attachment to the purpose and value of their work will be harder to achieve, so good communica-

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Obviously each individual business has to treat its own employees as unique and conduct a bespoke survey to identify its own engagement drivers. However, it is interesting to explore the differences in employee engagement that can be found at Region/Industry/Gender/Job level etc.

The original research conducted by The Leadership Factor last August using our own representative panel of employees provides considerable insight into variations in employee engagement.

Latest Thinking

As already reported in the previous issue of Stakeholder Satisfaction, the main factors at the overall level that differentiated ‘engaged’ employees from ‘indifferent’ employees were: · · · · ·

Communication from Senior Managers Recognition of your performance Pay and benefits Promotion opportunities Training and development

Chart 1: Variations by sector (industries with samples less than 50 excluded) 60% 67.9%

SECTOR Education

69.5%

Service

69.4% 69.4%

Financial services

69.1%

Leisure and Tourism

68.5%

Retail-non food

68.3%

Health

Interestingly, when cross-checked against overall employee satisfaction these are also the five lowest scoring factors, suggesting that there is lots of work to be done.

Differences by Sector

68.0%

Telecommunications

67.2%

Manufacturing

66.0%

Local Government Retail-food

65.7%

Government

65.7%

Transport

To demonstrate the need to treat your employees as unique, let’s now start drilling down by segment. Firstly, let’s take a look by sector. As can be seen in chart 1 there is a significant difference in the satisfaction indexes, between the top performing industries (education and service industry) and those near the bottom (government and transport).

80%

70%

Overall

62.8%

There is much support in Chart 1 for Harvard’s Customer-Employee Satisfaction Mirror theory. Education is not covered by the UK Customer Satisfaction Index (UKCSI) but the service industry is in the top 2 for both customer and employee satisfaction. Others in the top half for employee satisfaction are also, if covered,

in the top half on the UKCSI and ditto for the bottom half. The only exception is food retailing, which manages to generate good levels of customer satisfaction despite lower than average employee satisfaction. For the latest UKCSI results see page 31 in this issue of Stakeholder Satisfaction.

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Latest Thinking

Chart 2: Drivers of engagement by sector 4

5

6

7

8

9

Training and development Your line manager listens to you Being treated fairly Education (101)

Recognition of your performance

Transport (88)

Communication from senior managers Relationship with your line manager Promotion opportunities Physical working environment

It’s enlightening to look at some key factors that are driving these sector differences. Chart 2 shows the satisfaction scores of those who work in the top performing sector, education, against those in the bottom performing sector, transport. Those working in education are more satisfied with all aspects of their employment, but the biggest differences in satisfaction are recorded for ‘training and development’, ‘your line manager listens to you’ and ‘being treated fairly’.

Relationship with colleagues

Taking a step further, we can look at the number of people engaged in those industries. Shown in Chart 3, the gap looks much bigger now that we look at engagement. Education has a net engagement index (Engaged minus Disengaged) of 32.7%, whilst Transport has a negative net engagement index of –2.3%, meaning that they have more people who are actively disengaged than engaged.

Work/life balance Having the resources to do your job Pay and benefits

Chart 3: Net engagement by sector 0%

10%

20%

30%

40%

50%

60%

38.6%

Education

70%

80%

100%

90%

5.9%

55.4%

To improve any index, you need to understand what’s driving it. This can be done by comparing the scores for each factor given by the engaged and the less engaged employees. If there is little or no difference in the scores, the factor is obviously not making much difference to engagement. A big difference in scores makes it a key driver of employee engagement.

Engaged Indifferent Disengaged

Transport

25.0%

47.7%

27.3%

Chart 4: Improving employee engagement in education 3

4

5

6

7

8

Pay and benefits Communication from senior managers Promotion opportunities Being treated fairly Recognition of your performance Relationship with colleagues Training and development Physical working environment Your line manager listens to you Relationship with your line manager Having the resources to do your job Work/life balance

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Engaged Indifferent

9

As ‘education’ has so few disengaged staff their priority would be to try and move employees from their ‘indifferent’ status towards active engagement and we can see from chart 4 that they need to prioritise ‘pay and benefits’ and ‘communication from senior managers’ to do this.

Latest Thinking

Chart 5: Improving employee engagement in transport 3

4

6

5

8

7

9

Being treated fairly Communication from senior managers Recognition of your performance Training and development Physical working environment

Transport meanwhile needs to explore why so many staff are disengaged, and needs to make totally different factors their priority, especially ‘being treated fairly’, ‘communication from senior managers’ ‘training and development’ and ‘recognition of your performance’ as these show the biggest gaps for the sector.

Relationship with colleagues

Differences by job role

Promotion opportunities Having the resources to do your job Engaged

Your line manager listens to you

Disengaged

Relationship with your line manager Pay and benefits Work/life balance

Chart 6: Satisfaction by job role 60%

70%

Overall

80%

67.9%

Senior Managers (defined here as managing over 100 people) are much more satisfied than all other roles, especially with ‘promotion opportunities’, ‘training and development’ and recognition of your performance’. Not surprisingly, senior managers are also far more engaged, with a net engagement index of 48.9%.

Indeed, any other result would be very worrying, since engagement starts at the top. If Senior Managers are not engaged there is little chance that they will inspire engagement amongst those working for them. It must therefore be of some concern that 38% of senior managers are indifferent and a further 6% actively disengaged!

POSITION Manager - Of more than 100 people

75.4%

Manager - Of between 1-9 people

70.7%

Manager - Of between 10-100 people

69.2%

Non manager - professional

67.2%

Non manager - manual

67.0%

Non manager - clerical

66.8%

Chart 7: Net engagement by job role 0%

10%

Manager - Of more than 100 people

20%

30%

40%

50%

55.3%

60%

70%

80%

90%

21.9%

51.7%

100%

6.4%

38.3%

Engaged Indifferent Disengaged

Non manager - Clerical

As might be expected, managers in general are more satisfied than non-managers. This is important as an organisation is represented at all levels by its management, and an employee’s sense of what the company is like will usually be heavily influenced by the way immediate managers and senior managers behave.

Clerical employees record a negative engagement index of -4.5%. To improve this situation, organisations need to address ‘recognition of performance’, ‘training and development’ and ‘being treated fairly’.

26.4%

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Latest Thinking

Chart 8: Employee engagement by gender 0%

10%

20%

30%

40%

50%

34.6%

Female

60%

70%

80%

47.9%

90%

100%

17.4%

Engaged Indifferent Disengaged

Male

30.2%

50.8%

19.0%

Chart 9: Satisfaction by hours of work and gender 50%

60%

70%

Female Part time (458)

80%

67.1%

Male Part time (144)

68.7%

66.8%

Male Full time (656)

Chart 10: Engagement by hours of work 0%

Part time

10%

20%

30%

40%

30.3%

50%

60%

50.7%

70%

80%

90%

100%

34.0%

48.3%

Differences by gender Gender differences are not large, but women are more engaged than men, showing a net employee engagement index of 17.2% compared with the men’s 11.2%.

However, when we dig deeper, the picture becomes more complex. As shown in Chart 9, part-time employees are more sat-

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17.7%

isfied than full time employees, and more women work part time than men. It is clear that female part timers are more satisfied than male part timers (partially down to work/life balance, are they making the choice to work part time?) whilst there is little difference between gender satisfaction if comparing full time employees only.

Having established that part time staff are

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Most importantly, that you must treat your own employees as unique and that any generic study of employees is unlikely to be transferable to a specific organisation.

Not only do you need to treat your own staff as different from other organisations, but it’s very likely that you also need to explore what is driving different groups of people within your organisation, because managers have different needs from staff, and that age, gender, full time/part time workers may all have differing needs and expectations that need to be met.

19.0%

Engaged Indifferent Disengaged

Full time

Two of the top three drivers of engagement for full time employees are ‘recognition of your performance’ and ‘promotion opportunities’. The third is ‘communication from senior managers’, which is also important to part timers.

However, the key driver of engagement for part time employees is ‘pay and benefits’.

What have we learnt?

70.8%

Female Full time (742)

more satisfied than full time, it is interesting to note that the reverse is the case when comparing engagement. Shown in Chart 10, we can see that the net engagement index for full time employees is 16.3% but that it’s only 11.3% for part time staff.

Clearly part time staff are happy with their work-life balance choice, but are often not particularly engaged in driving the success of their company or their own career.

Another key learning point is just how important in driving engagement, ‘communication from senior managers’ is to most employees. When measuring satisfaction alone, this factor is rarely top of the list of priorities, but it has emerged as a vital factor in turning ‘indifferent’ employees into fully engaged staff.

As the credit crunch bites, and companies need their employees to work smarter and better to differentiate them from the rest, employee engagement continues to become ever more vital to long-term success.

After a decade that has seen employee engagement levels staying at much the same level right across the globe, perhaps we are finally going to see employees treated as companies’ ‘most valuable asset’. S

Conference

Aspiring leaders gathered in December in the interesting venue of the Central Hall Westminster. 800 of them, occupying only the lower of the two tiers of seating in the ‘Grand Hall’ – belt tightening presumably having a bigger impact on bookings than any belief that leadership is the way out of the recession. The venue was an interesting choice.

Convenient yes, historic certainly, with the Victorian features from the ceiling roses to the plumbing still aesthetically pleasing and fully functioning. Interesting and historic but in sharp contrast to the many voices promoting the need to throw out the old management paradigms and bring in the new to have any hope of fighting the recession. Apart, that is, from one very well known, rather crustaceous but very persuasive voice. More about him later. I’m going to start this review of Leaders in London with the thoughts of the thinkers, the speaker category with the biggest membership.

The Thinkers Many people attend conferences to get new ideas and / or to provide thinking time so you would expect full time thinkers to be just what the doctor ordered. Especially if they’re in at No. 11 on the “Thinkers 50” (the list of the world’s top business thinkers). Although it seems like an age ago, I remember sweating blood over Kotler’s massive textbook and always admired his customer-centric view of marketing, not to mention the millions of books he must have sold. Imagine my disappointment when he treated us to a lecture he could have delivered to his first year students a few days ago, or worse, a few years ago. We sat through a thorough text book account of the evolution of marketing and encouragement to fight the recession with paradigm shifts but no new insights as to what these might be.

Philip Kotler Professor Kellogg School of Management

Surely Gary Hamel would be better. After all, he co-authored “Competing for the Future”, the best selling strategy book of all time and wrote 2007’s Best Business

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Book (as voted by editors of Amazon), “The Future of Management”. Both titles sound very apt in current times. Well he was certainly more animated than Kotler and a lot noisier, and much more scathing about the complete failure of modern management, which, according to Hamel, has not really progressed since the 50s or 60s. However, he did suggest some specific ideas for how to do the paradigm shifting and become 21st century leaders.

One idea was to ask thousands of outsiders to help develop your company strategy. I think he meant customers. An interesting idea, and one that was developed later and far more tangibly, by one of the doers. Most of his ideas were focused internally on employees and culture and were drawn from his favourite companies like W L Gore and Semler Corp. For the latter see the book review in a very early edition of Stakeholder Satisfaction (December 2003), but there are many parallels between the two companies.

Both are supreme examples of employee managed, in fact, employee led organisations. Work units are self-managed teams who appoint their own ‘leader’ and can do whatever they think appropriate to achieve agreed revenue targets. No-one can tell anyone else what to do, but peer appraisal determines pay, so contributing is a sensible career strategy. All employees can spend 10% of their time on whatever they find personally interesting.

As well as helping employee engagement, this policy generates most of the company’s new products and growth. Hamel’s

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Conference

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fundamental point is engaging, empowering and therefore harnessing the creative potential of all employees. Not a new idea but certainly a good one. He encourages organisations to develop “a thoughtocracy of ideas”. Like the 540,000 suggestions generated last year just by Toyota’s Japanese employees. Dell have an “IdeaStorm”. The interesting thing here is that it’s on the intranet for all employees to see and to comment on, like a blog, often generating many comments for each suggestion. Now that is a good way to harness the creative power of the workforce.

Gary Hamel Visiting Professor London Business School

Vijay Govindarajan is GE’s Chief Innovation Consultant as well as an academic. Another paradigm shifter, Govindarajan uses an interesting high jump analogy to illustrate the view that successful innovation requires ‘outside the box’ thinking. In the early days of the last century the prevailing technique was the scissors, just like we all did at junior school, but over the years the much more efficient techniques of the straddle and then the Fosbury flop were developed. It is the completely new techniques that resulted in advances in the world record.

It’s very unlikely that men would be jumping almost 2.5 metres and women over 2 metres using the scissors! Govindarajan’s five barriers to innovation are 1.Too much focus on current operations 2.Lack of tolerance for failure 3.Not embedding innovation as an important responsibility for every employee 4.Too much silo mentality 5.Lack of a global mindset.

getting some of the old ideas out. You need to forget some of what has made your core business successful.”

Vijay Govindarajan Professor Tuck School of Business

Author of “Microtrends: the small forces behind tomorrow’s big changes”, Mark Penn was a valued advisor to both Tony Blair and Bill Clinton, helping them to identify and respond to consumer trends and voting patterns. Penn’s key trend is the transition from the “Ford economy to the Starbucks economy” – a world of mass customisation and fast emerging niche markets. In the Ford economy seeing new patterns was less important than creating them, marketers seeking to create markets and manipulate consumer choices. Of course, you could debate this.

I’ve always agreed with Peter Drucker that the most profitable business model has always been to sell products that customers want to buy rather than persuade them to buy the products you want to sell.

Where Penn and I would agree, however, is that burgeoning information and communication channels in the internet age have made it much more feasible to identify and respond to niche trends and needs. Not just feasible but essential, since growing consumer confidence together with widely available information on niche products and services means that consumers are no longer prepared to settle for second best. Microtrends might not be a quick fix to battling your way out of the recession but will surely be a key element of all good companies’ innovation strategies in the 21st century.

Govindarajan thinks that overcoming the first barrier is the biggest challenge for most organisations, saying: “The problem is not so much getting new ideas in as

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The Doers Some of the doers are technically exdoers (or is that didders?), but if they run, or have run proper businesses, they’re in this section. That doesn’t mean they were all great contributors to the conference.

The one I was most looking forward to as a champion of entrepreneurs, was the most disappointing. Luke Johnson, best known for Pizza Express but also successful owner of businesses across many other sectors was a strict verbatim reader of a speech, much of which was quotes from other people.

Luke Johnson Entrepreneur and Chairman, Channel 4

Charlie Mayfield is Chairman of John Lewis Partnership (including Waitrose), clearly admirable businesses. He acknowledged that they’re suffering in the recession, especially on higher ticket durables, but he isn’t changing his strategy. Based on Harvard’s Service-Profit Chain principles, his key management beliefs such as the Customer Value Proposition and the Employee Value Proposition have been widely covered in earlier editions of Stakeholder Satisfaction. For details go to www.stakeholdermagazine.com and see the December 2003 issue for the Customer Value Proposition and the March 2004 issue for the Employee Value Proposition.

Charlie Mayfield Chairman John Lewis Partnership

Mark Penn Author and Consultant.

With the recent withdrawal of Honda, Formula 1 is not currently a comfortable place to be, but listening to boss Ron Dennis, one team that’s not quitting is

Conference

McLaren, home of newly crowned world champion Lewis Hamilton. Since their mission is that they exist to win, you wouldn’t expect them to be quitters, but Dennis had some very interesting messages of great relevance to business in the 21st century, especially on the need to increase the speed of making and implementing decisions without reducing the quality of outcomes.

Dennis pointed out that over a lap of almost three miles the difference between the fastest and slowest car on the grid in the Brazilian Grand Prix was 1.74 seconds. To maintain an edge in such a competitive environment, a McLaren car will be 2 seconds quicker at the end of the season than it was at the beginning. To achieve this, a change to the design of the car will be made every 20 minutes! To maintain this pace of change, decisions about design improvements must be debated, adopted and implemented at breakneck speed, but without compromising quality. The cars must obviously remain safe, that’s just a given, but the design changes, or at least the vast majority of them also need to work. To give a couple of examples, it takes a volume car maker five years to conceive, develop, test and build a new car. It takes McLaren ten months. It takes Ford up to two years to design and develop a new suspension system. McLaren have done it in two weeks. Dennis emphasised that to succeed in this pressurised environment, everyone on the team must be highly ambitious and totally engaged, so employees are highly incentivised, but rewards are not automatic, they follow results and

reward success not mediocrity.

Ron Dennis Chairman and CEO McLaren Group

One of the most interesting speakers, and certainly one of the most engaging, was Richard Reed, co-founder of Innocent Drinks, Britain’s fastest growing food and drink company, achieving a turnover of £100 million in less than 10 years. Reed had 5 messages based on the lessons he’s learned over this period.

First, “keep the main thing the main thing”. Maintain focus on a clear product offering that is designed to match precisely the needs of a target customer group. Second, “it’s all about the people”.

Richard Reed Co-founder Innocent Drinks

Like Dennis, Reed advises recruiting the best people that match the values of the business, then do all you can to engage them. As an example, on day 1, new Innocent employees are given a mug and

a bowl with their name on, for the free drinks and breakfast. Third, “make money”, but only if you can do it ethically and sustainably. Fourth, and again echoing Dennis, “take care of the details” because if there’s parity in a market, it’s the little details that make the difference.

Last but not least, “open up, listen up”.

Customer feedback is essential. The business needs to know at all times how customers see it and that they are satisfied with what they’re getting.

Gary Hamel suggested that you should ask thousands of outsiders to help develop your company strategy – just what Carly Fiorina did when she became the first (and still only) female leader of a Fortune 20 company in 1999. Hewlett Packard had just missed its 9th consecutive quarterly forecast. For a technology company at the height of the dotcom boom, that was not a good performance.

In the next issue of Stakeholder Satisfaction we’ll look in detail at the strategic changes that resulted from this customer consultation, but in this article I’ll outline her approach to changing the culture at HP. Fiorina inherited a very conservative culture where people were very thorough, took few risks and were rewarded for beating internally generated (conservative) targets. The first thing she did was to reward people for satisfying customers before developing and communicating the company’s new strategy and vision. Although HP’s strategic direction was changed massively by Fiorina, she was at pains to emphasise that as long as a vision is only the leader’s, it won’t succeed. You have to communicate the vision sufficiently well to motivate some employees (change warriors) to lead the others into the new land. There are some very senior people who don’t lead (which is a big problem) and others lower down who can be highly motivated and very influential.

To successfully drive through change, you don’t need unanimity but you do need critical mass. You must therefore identify the change warriors, recognise and reward them and celebrate success. Other people will be watching this and, apart from the most diehard change resisters, most will join the winning team sooner or later.

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Customer

Fiorina also had some very relevant tips for beating the recession. She pointed out that people always like comfort zones, but never more than in tough times, when they’re inclined to dig down into the trenches and protect what they’ve got. In fact, it’s in the tough times that you most need to change. Darwin explained that the survivors are not necessarily the biggest, strongest or even cleverest species, but the most adaptable. It’s the same for companies, but their leaders must show the way, above all striking the right balance between realism and optimism. Leaders must have the ability to recognise all the threats, obstacles and challenges with clear eyes and they must be truthful to employees about these. But they must also be optimistic, and succeed in communicating a genuine belief that the organisation can meet the challenges and build a better tomorrow.

his direct reports every three months, along the simple lines of: “Here’s what I like. Here’s what you can do to improve.”

He was very strong on the need to be candid with your people. They should never get any surprises.

9.

10.

Jack Welch Fortune Manager of the Century

Rather than hiding away in his office, Welch spent much more time out and about, talking to employees of all levels and to customers, saying; “Your job is to touch everyone and get into their soul.”

Welch’s top 10 tips for creating corporate momentum are: 1.

Carly Fiorina Director of several companies ex-CEO HP

Someone who never had any difficulty being truthful with employees was Jack Welch, who worked for GE for 40 years, as CEO and Chairman for half of that time, during which time the company’s market capitalisation surged from $13 billion to $400 billion. This earned him Fortune Magazine’s accolade of Manager of the Century. Opinionated, cantankerous but infinitely wise and with both feet firmly on the ground, Welch has no time for too much academic theorising. He says that good managers have to be able to “eat while they dream”. In other words, they must continue to produce short term results whilst looking after the long term future of the business. The ability to do this is the hallmark of great companies.

Anybody can do one but not the other.

Great leadership is the ability to make the right judgement calls between the two. So how did Welch allocate his time at GE. He claims that 75% of it was spent helping his people to perform better. He evaluated

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8.

2.

3.

4.

5.

6.

7.

The right measures If he had to run the company on only three numbers they would be customer satisfaction, employee satisfaction and cash flow.

Build confidence Build self-confidence in your people.

Set your people free Like Harvard, Welch believes that employees have to operate within a clearly agreed set of parameters, but “you’ve got to have more freedom than you ever dreamed of.”

Shout when you win You must celebrate all the victories, even the little ones.

Numbers aren’t enough Sales and profit targets are not the vision. They are the product of the right vision and strategy successfully implemented.

Talent development At GE, Jack Welch and his top two HR people visited each division for a day and personally reviewed the top 20 to 50 people.

Fair doesn’t mean the same To treat every person fairly you have to treat them differently.

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Make people share good ideas At quarterly divisional head meetings Welch insisted that all managers shared the ideas and practices most responsible for their division’s success that period. “We take the best of diversity and use it.”

Meet customers more often Welch made a point of personally meeting all GE’s major customers twice a year.

Don’t dither. Jump ”I’ve learned in a hundred ways that I rarely regretted acting but often regretted NOT acting fast enough.” S

Nigel Hill Founder of The Leadership Factor and editor of Stakeholder Satisfaction.

Football highs meeting Bobby Charlton twice, the last 3 minutes of the 1999 Champions League final and Ryan Giggs’ wonder goal against Arsenal.

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EMPLOYEE SURVEYS Do you want an average employee survey based on standard questions for the typical organisation?

Or would you prefer questions based on what's important to your employees with actionable outcomes to improve the engagement of targeted employee groups.

If you’re trying to differentiate rather than follow the pack, contact Jim Alexander on:

01484 467 025 or jimalexander@leadershipfactor.com

Case Study

Employee Engagement - The key to business success A POSITIVE ATTITUDE HELD BY THE EMPLOYEE TOWARDS THE ORGANISATION AND ITS VALUES In a recent survey of large UK employers conducted by Strategic Reward, we asked HR Directors “What are your top three issues, in order of priority, over the next 6 to 12 months?” The 150 respondents placed Employee Engagement in top spot, closely followed by Leadership Development. Is this what we would have expected? According to conventional wisdom – the financial crisis, decline in manufacturing output, tough times on the high street and plenty of negative press – mass redundancies and major restructuring of the workforce would be nearer the mark. But, why should conventional wisdom apply when times are definitely unconventional?

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Case Study

Employee engagement is now widely recognised to be at the heart of business success – in good times and not-sogood. If you’re restructuring, engaging survivors is going to be a tough challenge, but it’s far from impossible; If you’re standing still and in “batten down the hatches mode”, motivating, encouraging and supporting employees who feel insecure about their future is crucial. If parts of your business are expanding (yes, it’s not all doom and gloom out there), having a compelling proposition about why people should join your organisation (and stay) is essential too.

Engagement defined Not surprisingly, definitions of employee engagement differ. The Institute of 2 Employment Studies definition includes the words “a positive attitude held by the employee towards the organisation and its values. An engaged employee is aware of business context, and works with colleagues to improve performance within the job for the benefit of the organisation”. Heskett, Sasser and 3 Schlesinger talk about “….the frequency with which an employee refers others for employment with the organisation”.

Ask a group of HR Directors and they will typically say · Employees showing high organisational commitment, job satisfaction, and who embrace the brand · A happy, motivated, productive and loyal workforce · Employees feel valued and that their contribution has an impact on the business · Employees regularly work to exceed expectations, are willing to challenge the status quo and take informed risks.

While organisations may have different definitions of employee engagement, the end result is the same: desired behaviour, in particular the extent to which employees engage in the sort of discretionary behaviour which is right for customers, other stakeholders and long term growth.

This behaviour is often referred to as “going the extra mile”. For me, this is about

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· Customer focus: understands the customer; solves their problems · Innovation: challenges assumptions; proposes new ways · Teamwork: works across boundaries; shares knowledge; encourages colleagues · Open communications: creates clear communications and feedback · Recommending the organisation: as a place to work; as a place to do business.

Our research tells us that this is a big concern. Among the most frequently made comments at focus groups that I facilitate for clients are

Why is behaviour so important? Surely, results are what matter most. We have to look no further than our own experience for the answer. How do we feel when we stay at a hotel where employees treat us like a VIP? Great, we book again and we tell our friends. Contrast that with a retail store where the sales assistant is interested only in “pushing” a specific product, probably because they have been financially incentivised to do so, and treats us like an inconvenience. We are dissatisfied, we tell our friends and we never shop there again.

According to research by the Corporate 1 Executive Board , employees’ perceptions of pay process fairness, that is the procedures used to evaluate and allocate pay, not the level of pay, is a 25 times stronger predictor of employee commitment than is pay satisfaction. Without fairness and consistency, emotional connections will not exist.

Barriers to engagement and overcoming them Our experience raises two important questions. What are the barriers to employee engagement and how can we engender it? There are lots of organisations where employees don’t understand how their day-to-day work affects business performance. Philip Addison, Human Resources Director, Accor UK & Ireland Hotels, puts it this way: “Business Leaders often take some of the basics for granted and assume that employees know what’s important if the business is to succeed, what’s expected of them and what they can receive in return. But, if we, the Business Leaders, don’t set out clearly what’s expected of employees and what we’ll provide in return, how can we possibly expect employees to know what’s important to our business?

Developing our vision and values with them really helped us clarify our own thinking”.

Other, more potentially damaging, reasons are lack of fairness and consistency in the way HR practices are implemented.

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· “Pay review isn’t transparent” · “We only get negative feedback about customer satisfaction” · “Recognition! What’s that?” · “My manager pays lip service to my training needs”

But not dealing with malingerers, people who go out of their way to upset working relationships and cynics who criticise the motives of the organisation, whatever it does, sets an incredibly bad example to the majority of employees and is bad for business.

This is in stark contrast to organisations where people feel valued and work together towards common objectives with which they all understand and agree.

Here, business leaders work tirelessly to build and retain the trust and confidence of employees, to create a culture where employees feel engaged because their personal success and that of the organisation are tied together. These business leaders are the role model for “the way we do things around here”.

A compelling employee proposition A truly compelling employee proposition, which attracts, engages and retains the talented people the organisation needs, must be based on everything employees value in the workplace. That’s a lot to do with intangible factors such as job challenge and interest, freedom and autonomy, employees’ needs at different stages of their life and reputation of the organisation. The twoway nature of the employee proposition can be set out quite simply, as shown overleaf:

Case Study

We expect you to…. · Put guests at the centre of our company · Help create a positive and engaging work environment for everybody · Live our company values · Engage with performance review · Develop your skills and want to learn · Work together, contribute ideas and share knowledge · Be open and respectful We provide….. · Very competitive rewards in the hospitality sector · A benefits package that is relevant and of value to you and your dependents · The opportunity to earn rewards based on contribution – both results and behaviour · Opportunities for learning, development, personal growth and career progression · A great work environment that recognises excellence and teamwork, and provides respect and support for the individual.

While this “generic” proposition communicates the key principles which underpin employment, what one type of employee group finds interesting and engaging, another may find boring and de-motivational. So, variations in employee proposition may be appropriate.

Segmenting the workforce can reveal powerful insights about what employees value, and consequently the drivers of engagement. Categories include · Employment arrangement – full-time, part-time, fixed term contract, telecommuter · High performers – do they have unique needs and expectations? · High potential employees – those whom the organisation believes have the capability to become top leaders and the vision to take the organisation to greater success in the future. What engages them? · Critical groups – do groups of employees, such as graduates, customer-facing or product development have different views about the workplace experience?

The case study describes how one organisation, Southern Housing Group, delivers three key aspects of its employee proposition – providing a talent pipeline, encouraging and rewarding learning, and giving employees the opportunity to work flexibly.

Change Blueprint

CASE STUDY: Southern Housing Group

Contrary to much conventional wisdom in HR, the drivers of engagement are specific to individual organisations, so general prescriptive actions to improve engagement levels are of limited use. Actions should focus on the specific results of the engagement survey. The following five-point plan is a good way to get things started:

Southern Housing Group is one of southern England’s largest housing associations. Founded over 100 years ago, Southern Housing Group owns and manages 24,000 homes with more than 66,000 residents, employs 900 people and works with 80 local authorities.

Southern Housing Group believes that building communities is as important as building homes. So as well as developing and managing quality affordable housing for rent and ownership, Southern Housing Group invests considerable resources to provide an environment where people really want to live. Southern Housing Group also invests in HR practices which are designed to encourage high levels of customer service and meet the needs and aspirations of employees. This case study looks at three aspects of its HR approach.

1. Communicate key results of your engagement survey openly, via team talk, round tables and business forums, and say what action will be taken with an indication of timescale 2. Build on your employee proposition: what does it really mean for your brand and employee engagement?

3. Ensure you understand employees’ perceptions and the importance they attach to them 4. Recognise and celebrate success at individual, team and organisational levels, especially in non-monetary ways 5. Invest in managers and team leaders.

Help them delegate, trust, coach and reward.

Employee engagement is not an end in itself. It is worthwhile only if translated into business results, such as increased customer or stakeholder satisfaction (ultimately leading to their loyalty), sales growth, higher productivity, lower costincome ratio or higher profits. Will your organisation take up the challenge?

References 1. Corporate Executive Board: Driving Performance Through Pay-January 2006 2. Institute of Employment Studies, The Drivers of Employee Engagement, Report 408 3. The Value-Profit Chain, Heskett, Sasser & Schlesinger, The Free Press

1. Providing a talent pipeline The Graduate Development Programme (GDP), which has been running for seven years and is recognised to be one of best in the Housing sector by the National Council for Work Experience, provides a successful talent pipeline for Southern Housing Group.

The GDP is a three-year programme which fast-tracks graduates into established jobs in Southern Housing Group and gives them the opportunity to continue with specialised postgraduate studies.

During years 1 and 2 graduates gain experience in all areas of Southern Housing Group. They start their training in the Customer Service Centre and move onto frontline housing management, policy work at head office, housing development projects and group departments, such as community regeneration, finance, IT, human resources, and sales and marketing. In year 3, graduates take on a specialist job.

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Case Study

Throughout the GDP, graduates have a personalised career development plan and attend well-established in-house training courses and management development workshops. Each graduate has a mentor (a director or senior manager) who acts as a sounding board and helps them achieve their full potential.

According to Karen Harvey, Head of HR and Employee Development: “Southern Housing Group has a 100 per cent success rate for graduates passing their professional examinations and several of them now hold key jobs in Southern Housing Group”.

2. Rewarding learning Southern Housing Group’s approach to reward includes three schemes which are designed to encourage learning. First, The Brick Plan is a structured six month development and reward scheme for all employees starting work in the Customer Service Centre. The scheme gives financial rewards to employees on successful completion of each stage of the scheme.

These rewards are designed to give employees a personal development incentive to gain a good, foundation knowledge of Southern Housing Group and the Housing sector. Karen Harvey says: “Southern Housing Group’s recent successful Investors in People review found that employees working in the Customer Service Centre said that, compared to some call centre environments, the Brick Plan offered them a better career path and had a strong learning focus.

Several employees have progressed from the Customer Service Centre into other more senior housing roles in Southern Housing Group. Since introducing the Brick Plan, employee retention rates in the Customer Service Centre have improved”.

Second, Southern Housing Group have recently introduced a new reward scheme providing employees with Learning Vouchers which can be used for any learning activity, work or non-work related. The scheme enables employees to learn something new, for example a language or cooking which may not be work related, but could bring additional personal benefits.

Third, Southern Housing Group are required to have a certain number of qualified employees working in their care schemes and services, so it offers financial rewards to employees undertaking an NVQ in Care. Karen Harvey again: “The extra financial incentive can encourage employees to take on the extra challenge of studying and developing, especially as some of them haven’t studied for a number of years. Since introducing this incentive, we have seen an increase in the number of employees taking up NVQ qualifications”.

considers there is no adverse business impact, employees are able to accrue additional hours to allow them to take up to one day off every 4 week period, with prior agreement from their line manager.

In addition to Flexitime, Southern Housing Group offer all employees the option to apply for compressed working. This is where employees work 70 hours (2 x 35 hour full-time equivalent weeks) over 9 rather than 10 days.

Currently approximately one third of employees across Southern Housing Group take advantage of flexible working opportunities, with around two thirds on flexitime and a third work on compressed hours. According to a recent employee opinion survey, 76% of employees felt Southern Housing Group allows them to adopt working patterns which help them balance their work and home life and 70% felt that overall, their terms and conditions of employment were good. S

Raymond Robertson Director Strategic Reward

3. Working flexibly Southern Housing Group’s Flexitime scheme gives all employees the opportunity to apply for flexible working. The scheme is designed to enable employees to work hours that are more sympathetic to their lifestyle and personal commitments. As long as their manager

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Ray is author of the widely accliamed book, “The Together Company” and one of the UK’s leading experts on reward. He has worked with companies such as Porsche, Wildlife Trust, B&Q, ABB and Whitbread.

Ray can be contacted at: email: team@strategicreward.com Tel: 01666 511347

Conference

This year’s UK Customer Management Conference strongly featured customer management in the current economic climate. We will look at this in the next issue of Stakeholder Satisfaction, as well as the importance of defining the experience you want your customers to have. Here, we will pick up on another theme from the conference, that of employee engagement, and in particular its intrinsic link to customer experience. We will also see some of the examples of best practice outlined from organisations such as Norwich Union and O2.

Bob Downie (Founder, UK Customer Management Conference and Chief Executive, The Royal Yacht Britannia) opened the conference, reminding us of the need to deal with internal customer service before external, maintaining that a genuine customer philosophy comes from the inside. Staff need to be engaged in order to deliver good customer service.

He felt it was imperative that staff are involved in customer service improvements because they are closest to customers and are therefore more aware of the problems and their potential solutions. We will see an example of this later from Norwich Union. Shaun Smith (internationally-acclaimed business speaker and best-selling author) also underlined the interconnectedness between employees and customers, claiming an 85% correlation between the way employees feel and the way customers feel.

Norwich Union employee blogs Darren Cornish (Director of Customer Experience, Aviva, formerly Norwich Union) gave us an interesting insight into his unique way of engaging with staff; He created a blog on the intranet to communicate with staff. He felt strongly that listening, acting and improving upon the experience creates engaged and motivated people. The success of the blog was supported by the fact that it gets 4,000 unique hits a day and each person spends an average of eight minutes on there.

One example Cornish gave of listening and acting on what staff say was where a new employee at the company posted a message on the intranet about a problem with the direct debit form that was sent out to customers. The information

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Conference

NEVER EVER TELL A CUSTOMER, WHO PAYS MY WAGES, WHO CLOTHES MY TWO BOYS, WHO PAYS MY MORTGAGE, WHO I JUST DAMN WELL CARE ABOUT THAT I WON'T SPEAK TO THEM

required on this form was not clear, causing hassle for both staff and customers. After the message was posted, the staff member was enlisted to help change the form to be clearer and the problem was rectified quickly.

More crucially, his story demonstrated the importance of senior management in motivating staff and defining the internal culture. One excellent example of this is shown in an extract from the blog below…

company policy for customers not to be put through to Directors (or their secretaries).

Let me be clear. My number is 07800 690217. My email is darren.cornish@norwich-union.co.uk I trust people to use it sensibly but never ever tell a customer, who pays my wages, who clothes my two boys, who pays my mortgage, who I just DAMN WELL CARE ABOUT that I won’t speak to them.

Each manager has an employee satisfaction measure as part of their annual bonus.

This really is leading edge. In the UK there is still only a small percentage of organisations that have adopted customer satisfaction-related pay, let alone employee satisfaction-related pay. According to Daniel Goleman (see article on page 18 of this issue), 50 to 70% of how employees feel about their organisation is driven by how they feel about their immediate boss. If he’s right, employee-satisfaction related pay for managers must be a win-win initiative.

Hard to swallow In NUI I was the Head of Customer Experience. One of the things we did was regular ‘customer listening forums’ where complaint customers came and told the Exec Directors what it felt like trying to get a service.

As Head of Customer Experience these sessions helped me no end in getting senior management attention and action on what needed to be better. Almost without fail, the customers would say how badly we treated them until the complaint team stepped in and helped sort it out.

Last night I facilitated the NUL Exec team listening to 6 complaints customers. This time I had no place to hide. No other director to ask to sort it out.

We had one customer in tears, we had another very angry with us. Another who said he would do pretty much anything NOT to put anymore business with us. I’d normally share in detail what was said but I can’t bring myself to.

Apart from one thing. It was said by one of the customers that they were told it is

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Sorry for being downbeat. I know this was a small sample of customers. But it’s not the company I want to be a Director at. We have to get better. I need a dark night of the soul. The fish rots with the head and I am right up there.

Cornish also told us how Norwich Union had changed their reward scheme for staff, scrapping incentives altogether as he maintained that they drove the wrong behaviours in staff. Instead, he preferred to ‘create heroes’, telling stories via the blog about excellent service delivered by individual members of staff.

Also at 02, staff are privy to the same offers and services that customers have, such as early access to tickets at the 02 arena. 02 realise that their people make the difference and recognise how important their frontline staff are because they have the most interaction with customers and are doing a difficult and demanding job. To demonstrate this, 02 arrange regular visits from senior management to the call centre to talk to staff. This allows senior management a good insight into what is happening with both employees and customers. S

Driving employee engagement at O2 Cheryl Black (Customer Service Director, 02 and Vice President, Institute of Customer Service) shared some of the fundamentals that meant 02 were voted one of the top 10 companies to work for in the Sunday Times. She told us that it is vital not to leave the employee experience to chance, therefore 02 have set out 7 key things that need to happen for each member of staff, from a warm welcome when starting to thanking employees for a job well done.

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Sarah Stainthorpe Research Manager: The Leadership Factor

A demon with data, Sarah provides insights to Direct Line, Churchill and RBS amongst others. When not number crunching, Sarah watches her sister play Premier League football for Nottingham Forest Ladies.

email: sarahstainthorpe@leadershipfactor.com

Employee

What is Employee Engagement?

According to the Work Foundation, “Employee Engagement describes employees’ emotional and intellectual commitment to their organisation and its success. Engaged employees experience a compelling purpose and meaning in their work and give their discretionary effort to advance the organisation’s objectives.”

The Best Companies’ definition is a little more succinct. “Engagement can be defined as an employee’s drive to use all their ingenuity and resources for the benefit of the company.”

So, put simply, Employee Engagement is about people doing willingly and well what needs to be done and going the extra mile – because they want to. It is the difference between people coming to work and doing an ‘O.K.’ job and people turning up at work firing on all cylinders, displaying creativity and using their initiative.

and feel a real connection to their organisation. People who are actively engaged at work help move the organisation forward.

PEOPLE ARE LIKE ELECTRICITY - OF NO USE UNLESS SWITCHED ON. Peter Drucker Harnessing that innate, latent, but all too often ‘never to be untapped’ talent of employees does improve performance.

When employees maximise their potential, everybody benefits.

The value of employee engagement The 2008 Engagement Report by BlessingWhite found that only 29% of employees are actively engaged in their jobs. These employees work with passion % believing they can make a difference to:

Research carried out by Gerard Seijts and Dan Crim in 2006 found huge differences in the extent to which engaged and disengaged employees believed they could make a difference.

Another study in 2006, this time by Alison M. Konrad, found that engaged employees feel a strong emotional bond to the organisation that employed them. Similarly, research conducted by the Hay Group found that those with a strong emotional bond to their employer demonstrated a willingness to recommend the organisation to others (advocacy) and commit time and effort to help the organisation succeed.

Engaged

Disengaged

Quality of products

84%

31%

Customer service

72%

27%

Cost in their job unit

68%

19%

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Employee

Nancy R. Lockwood’s article in HR Magazine, March 2007: “Leveraging Employee Engagement for Competitive Advantage” found that employees with the highest level of commitment performed 20% better and were 87% less likely to leave the organisation. Interestingly, at the beverage company Molson Coors, it was found that engaged employees were five times less likely than non-engaged employees to have a safety incident and seven times less likely to have a lost-time safety incident. In fact, the average cost of a safety incident for an engaged employee was $63, compared to an average of $392 for a non-engaged employee. Consequently, in 2002, through strengthening employee engagement, the company saved $1,721,760 in safety costs. In addition, savings were found in sales performance teams through engagement. In 2005, for example, low engagement teams were seen falling behind engaged teams, with a difference in performance related costs of low versus high engagement teams totalling $2,104,823.

Such extensive research, both in the academic and business communities, indicates clear links between highly engaged individuals and overall organisational performance, specifically in the following areas: · · · · · · · · ·

Bottom line results Job satisfaction Customer satisfaction and loyalty Advocacy Absence Employee turnover Accident and safety records Creativity and innovation Resilience to change

ically show what employees feel about their work on a range of issues including Pay and Benefits, Communications, Learning and Development, Line Management and Work/Life Balance. The resulting data can be analysed to identify areas in need of improvement and combined with other Management Information to support Performance Management.

The results of such surveys, the employer’s commitment to take action on the outcomes and, crucially, the clear communication of all that back to their employees, are more important than ever to an organisation eager to build an engaged workforce. For more information on employee engagement surveys, see Mark McCall’s articles in the current issue and September’s Stakeholder Satisfaction.

Employees also need to know how their work contributes to organisational outcomes. The Institute of Employment Studies (IES) has concluded that the key driver of Employee Engagement is feeling valued and involved. Indeed it is often said that ‘involvement equals commitment’ and that a person thrives on positive feedback.

BY IMPROVING EMPLOYEE ENGAGEMENT, MOLSON COORS SAVED OVER $1.7m IN SAFETY COSTS ALONE. An organisation committed to employee engagement should also ensure that there is a shared sense of purpose and that individual goals are aligned to those of the organisation.

Building an engaged workforce Given the clear association between engagement and overall business performance, there is every incentive for organisations to drive up levels of engagement in the workforce.

The first step is to measure employee attitudes. Most large employers in both the public and private sectors now conduct regular employee surveys. The results typ-

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It is not about driving employees to work harder, but about providing the conditions under which they will work more effectively – it is about making conditions conducive for employees to demonstrate their discretionary behaviour and go the extra mile. This is more likely to result from a healthy work/life balance than from working long hours. Engagement is wholly consistent with an emphasis on employee well-being.

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Not surprisingly there is a parallel between the concept of engagement and that of ‘flow’ – the term used by the American Psychological Society to describe that state of mind when people become completely immersed in an activity, so absorbed in the task, so ‘in the zone’ that they lose track of time and are oblivious to external distractions.

MAN IS SO MADE THAT WHEN ANYTHING FIRES HIS SOUL, IMPOSSIBILITIES VANISH. Jean De La Fontaine

This tends to result when employees share the organisation’s vision for the future, have job autonomy, support and coaching, feedback, opportunities for learning and development, task variety, responsibility, involvement and a sense of pride in their work.

By placing Employee Engagement right at the top of their agenda, organisations are sending out a strong, unequivocal message to their workforce that they are valued, respected and trusted. They subsequently attract and retain more talented staff, which all results in significantly higher levels of customer satisfaction and loyalty. This is a Win-Win strategy if ever I saw one! S Rachel Davies Director Peak Performance Training Rachel is an inspirational trainer and people motivator. She presents the “Advancing the Service Culture” one-day training course for The Leadership Factor. Comments from delegates who have attended this courses include: “Enjoyed it all and re-enforced my passion for excellent service provision and customer service” Paul Phillips, Customer Relationship Manager Visa Europe

Rachel says that when she was at school she supported Liverpool and now supports the underdog. Not sure if this is the same team.

rachel.peakperformance@tinyonline.co.uk

Customer

Wave 4 Results: January 2009

THE NATIONAL MEASURE OF CUSTOMER SATISFACTION Consumers optimistic about service The UK Customer Satisfaction Index (UKCSI) is the National Measure of Customer Satisfaction for UK organisations. The survey is conducted by The Leadership Factor on behalf of the Institute of Customer Service. Released on January 15th 2009, the latest results are based on a representative sample of 24,000 adults surveyed over the internet. (results available online at www.ukcsi.com) Customer satisfaction The UK Customer Satisfaction Index has continued its upward trend, despite fears that the downturn in the economy might result in cost-cutting and failures of customer service. It is particularly striking that satisfaction with the banking sector has improved, proving that customers are able to “score it as they see it” based on their own service experiences rather than giving a score that reflects media coverage, although the adverse press does seem to have affected customers’ expectations of future service (see overleaf).

The overall UKCSI now stands at 72. The biggest gains were for the Government and Food Retail. The Services sector has slipped slightly, dropping below Non-food Retail at the top of the table for the first time.

50

55

60

65

70

75

80

85

90

95

100

72 71 77 77 77

Retail - non-food Services

79 76

Retail - food

74 75 75 75 76 74 73 72 71 70

Finance - insurance Automotive Finance - banks Leisure & tourism Government

67 70 70

Transport

67

Telecommunications Utilities Local government

66 64 64 63 64

Improvements expected Scotland

Consumers believe that the upward trend in CSI will continue, with 72% saying that they expect the organisation they scored to improve over the next few months.

Northern Ireland England Wales

73 72 72 72 72 71 70 70

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Customer

There is a clear link between customers’ current level of satisfaction with the organisations they have scored and whether or not they expect to see them improve.

Retail - food Retail non-food Automotive 80 Finance - insurers Services Telecommunications Leisure & tourism

70 Transport

Finance - banks Government

50 Local government

60

65

70 Satisfaction

75

80

To find such a link is interesting, but hardly surprising. More revealing are the deviations, for some sectors, from their expected position based on satisfaction.

As shown in the chart above, Telecommunications customers are confident that they will see improvements despite their relatively low levels of satisfaction—this may reflect a very dynamic market in which rapid innovation is expected, but in which lasting differentiation is difficult to maintain.

By contrast, Local government customers are relatively pessimistic about future improvements. Banking is the other salient sector where customers believe service will get worse in the coming months – hardly surprising in view of the banks current bad press.

Success stories The results for top performing companies in all sectors are freely available online at www.ukcsi.com. Of the 147 individual organisations measured for the UKCSI, the highest scoring named Top Ten were: · John Lewis · Ambulance Service · Lloyds Pharmacy · Waitrose · Saga · Marks & Spencer (food) · Boots · Autoglass · Premier Inn · Marks & Spencer (non-food)

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Customer satisfaction is often a relative judgement, so organisations that are out-

35

Utilities

40

the case that three of these have traditionally been seen as markets with little differentiation, but Automotive is something of a surprise. Although Automotive suppliers are consistent, and all are able to provide a reasonable level of service, there are no “stars” as there are in some sectors.

40

60

|

Number of companies

% believe service will improve

90

26 organisations received a CSI over 80, meaning that they are achieving consistently good performance with their customers. Six managed a CSI over 85 but none could exceed 90. If we look at the distribution of scores it becomes obvious that the majority of organisations fall close to the average.

The top performing companies may not seem to be far above average, but their performance puts them in very select company.

30 25 20 15 10 5 0

50 52.5 55 57.5 60 62.5 65 67.5 70 72.5 75 77.5 80 82.5 85 87.5 90 92.5 95 97.5 100

CSI

Variation in performance Comparing all organisations on a level playing field is the best way to establish the level of service on offer in different sectors. As shown in the chart below, there is considerable variation within each sector.

The chart shows the lowest, highest, and average score for each sector.

50

Retail - non-food Services Retail - food Finance - insurance Automotive Finance - banks Leisure & tourism Government Transport Telecommunications Utilities Local Government

60

70

Lowest score 68

80

Highest score 88

77

86

76

85

75

85

71 68

58 62 58 58

70

75 81

71

74 81

70

84

87

10 15 20 25 30

Ambulance Service (Gov’t) John Lewis (Retail - non-food) Premier Inn (Leisure & tourism) Hilton (Leisure & tourism) Virgin Atlantic (Transport)

Saga (Finance - insurance) Waitrose (Retail - food)

75 88

Some sectors show considerably more variation in performance than others. We would expect sectors which show a narrow range of scores to be those in which there is less perceived differentiation between suppliers—in other words all organisations in the sector are seen as being similar in terms of their ability to satisfy customers.

According to these data, this is the case for Finance (banks), Automotive, Utilities and Telecommunications. It is certainly

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Eurotunnel (Transport)

83

64 71 63

0

Fire Service (Local Gov’t)

Mariott (Leisure & tourism)

72 70 67

100

77

Average

62

63 60

90

performing the rest of the sector are the ones we would expect to see most benefit from their strong performance. The chart below shows the companies and organisations which are furthest ahead of the average score for their sector. S

Stephen Hampshire Client Manager The Leadership Factor Stephen manages customer and employee surveys for Visa, Norwich & Peterborough Building Society and King’s Fund amongst others. He also presents training courses on employee surveys, customer surveys and data analysis.

Stephen “sort of vaguely” supports Reading but is not too interested in football. However, he does climb mountains and reads New Scientist.

stephenhampshire@leadershipfactor.com

Latest thinking

Stakeholder Analysis Part 2 The success of any business, policy or project is usually judged by how satisfied stakeholders are. In an ideal world, all stakeholders would be completely satisfied – but things are rarely so easy. When stakeholders have different issues and objectives, keeping everyone happy is not as straightforward as it might appear. To give themselves a fighting chance, businesses can conduct simple stakeholder analysis to improve their understanding of stakeholder dynamics and how they might affect the project in hand.

In order to achieve this it is vital to not only identify all stakeholders (groups and individuals) but to ensure they are treated appropriately according to the role they play. The last issue of Stakeholder Satisfaction explored two straightforward techniques for identifying stakeholders and categorising them to gain a greater

understanding of how they need to be treated. Firstly, the article explained how the simplest way to identify stakeholders is to hold workshops or focus groups with employees and gather their feedback, creating an extensive list of stakeholders.

Secondly, it described how compiling a Power versus Interest grid (based on

stakeholders’ power to affect the project and interest in the project) creates a framework that shows clearly how stakeholders should be managed. Again, employees can potentially play a key role at this stage of the analysis by feeding back their views on stakeholders’ ‘power’ and ‘interest’.

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Latest Thinking

Involving employees There are numerous techniques available for analysing stakeholder involvement and gaining a greater understanding of stakeholder relationships. This article builds on those covered previously and introduces some techniques that take the analysis a stage further, using the Power versus Interest grid as a starting point. One of the greatest benefits of these techniques is that they provide a basis for discussion, and more than likely, heated debate.

Employees often know more than they think they do and it is more than likely that they store a wealth of information about stakeholders but, too often, lack the forum to share their knowledge and compare and contrast it with their colleagues’ viewpoints. For the purpose of stakeholder analysis, it is particularly beneficial to include a wide range of staff, from a variety of job roles, in the discussions to get as wide a range of opinion as possible.

To recap - the power versus interest grid, considers the Stakeholders’ interest in the project and Stakeholders’ power to affect the project and is shown in Figure 1.

Stakeholders are placed in the appropriate quadrant based on their characteristics.

Figure 1: Power versus Influence Grid.

Players

Interest

Subjects

Stakeholder influence diagrams

Context Setters

Crowd

Power (Influence) Source: Eden and Ackermann (1998)

Briefly: Players – Good working relationship is essential for the project to succeed.

Develop a partnership approach.

Subjects – Could present a risk to the success of the project. Identify and pro-

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tect. The project is a failure if it doesn’t meet subjects’ needs.

Context setters – Could present a risk to the success of the project. Take a proactive approach. Manage and monitor their activity.

Crowd – Require only limited monitoring and evaluation. Keep at arms length to reduce costs.

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Stakeholders on the Power versus Interest grid not only affect the outcome of the business or organisation’s project (whether it is a success or not) but they can also have an effect, or impact, on each other. The purpose of stakeholder influence diagrams is to explore these inter-relationships and uncover any new relationships that may have previously been unrecognised. Shown as Figure 2, the approach is straight forward. · Start with the completed Power versus Interest grid – stakeholders will

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appear in each quadrant. The easiest way to view this is to stick this on the wall or flip chart. · In the group environment (with colleagues), discuss which stakeholders influence each other. Draw lines on the chart, from one stakeholder to another, to suggest the lines of influence. · Draw an arrowhead to indicate the direction of the influence. (It is useful to bear in mind that two-way influences are possible.) · Discuss which of the relationships is the strongest or most influential. The thickness of the line can be used to represent the strength of the relationship.

As the diagram develops it is easy to see which stakeholders are likely to be under pressure from a number of other sources.

The chart will also show which stakeholders exert the pressure. This approach helps when it comes to viewing the project from a stakeholder’s angle as well as gaining an overview of the project as a whole and the stakeholder dynamics.

Latest Thinking

Figure 2: Stakeholder Influence Diagra

S1 Players

Subjects Interest

S5

Crowd S4

S2

Context Setters

S3

Power (Influence)

Stakeholder influence mapping The Stakeholder influence triangle is an alternative way of looking at the relative influence stakeholders have over decision-making. Shown as Figure 3, the diagram shows the relative size of stakeholder groups, how much influence they exert and their relationships with each other. As with the other techniques, this is best created in a group environment where opinions and views can be shared and challenged. · To create the triangle, define the project and the time period being mapped. · If it has not already been done - identify the stakeholders that have an impact or interest in the project. · Draw a triangle on a large sheet of paper. A selection of various sizes of paper circles will also be useful. · Revisit the list of stakeholders. Write the name of the largest stakeholder groups on the biggest paper circles.

· Under guidance from the group, arrange the circles on the triangle to reflect their influence and the strength of their relationships with other stakeholders. · Take time to discuss the positioning of the circles and understanding the range of views from the group.

Where the relationship between stakeholders is strong – this can be represented by placing the circles closer together. · Keep a record of the final diagram for future reference.

common ground amongst stakeholders 2) They provide background information that will help planners understand the way stakeholders react to problems or proposals.

Figure 3: Stakeholder Influence Triangle

· After this has been done, brainstorm the ‘directions of interests’ (goals) the stakeholder may have. Write these on the top half of the sheet. Draw an arrow on the sheet to indicate the direction of interest. · Exploring the power and interest of each stakeholder in this way, is extremely useful for gaining a greater insight into the nature of stakeholders. Much of the value lies in the discussion process itself.

Project aim

Increasing influence of stakeholders

Increasing influence of stakeholders

Circles represent stakeholders

Bases of power - directions of interest analysis The ‘bases of power’ analysis highlights the tools that are available to key stakeholders (i.e. the sources of power) and what they hope to achieve. The purpose of constructing the diagram is to identify the powers that might have influence on a project. An example is shown as Figure 4. The benefits of constructing the diagrams are two fold: 1) They help identify

· To create a ‘Bases of Power’ diagram, start with a flipchart and write the stakeholder’s name in the middle. · In a group setting, brainstorm the ‘bases of power’ as they apply to the stakeholder and write these on the bottom half of the sheet. This is about understanding what gives the stakeholder its strength.

Draw an arrow on the sheet to indicate the direction of power.

Figure 4: Bases of Power

Directions of interest What they ‘seeí the lenses they use to interpret your behaviour

Their view of your impact of their aspirations Player Support mechanisms

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Available sanctions

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Latest Thinking

Figure 5: Issue Interelationship Diagrams

Stakeholder 2 Stakeholder 1

Stakeholder 2 Stakeholder 1

Issue 2

2 Co-operative possibilities

Stakeholder Stakeholder

· Use four sheets of paper to create a grid. Fix to the wall. · In a group setting, brainstorm the names of stakeholders. (If a Power versus Interest grid has already been created, a list of stakeholders will already be available). Write the name of each stakeholder on a Post-It note. · Brainstorm a list of issues connected with the project being planned. Write each issue on a Post-It note, using a different colour note from those used for stakeholders. · Fix the issues on the grid then, around each issue, place the stakeholders with a link to that issue. · Draw arrows to illustrate the stakeholder’s interest in the issue. Write on the arrow the nature of the interest in the issue. · Discuss the findings. Are there any potential areas of co-operation or conflict emerging?

Stakeholder 3

Issue 1

Issue 1

Stakeholder

High Stakeholder

Stakeholder

Co-Operative possibilities Stakeholders have common interest

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Weak Supporters

Strong Supporters

Weak Opponents

Strong Opponents

Low Low

Issue 1

Stakeholder

Stakeholder

Issue 3 Issue 4

Stakeholder

Issue 2

Stakeholder

Potential conflict Stakeholders are interested in different issues

· Use four sheets of paper to create a grid.

Fix to the wall. · Mark the grid, as seen on Figure 6 with Stakeholder Power on the horizontal axis (low to high) and Opposition/Support on the vertical axis (high to low, low to high). · In the group, brainstorm a list of problems that might occur during the project.

Problem-free Stakeholder maps Stakeholders could form coalitions in the face of problems or adversity. These coalitions could play a strong role in swaying opinions on various issues – either positively or negatively. Equally, project planners may want to consider creating coalitions to help them overcome particular problems or issues.

Problem-frame analysis allows project planners to see the links that exist between stakeholders and problems. This approach is helpful when putting together proposals and anticipating the degree of support that is likely to be forthcoming as well as understanding how tweaking proposals can lead to an increased degree of support.

Figure 6: Problem Frame Analysis

Support

Stakeholders may be ‘related’ to each other through their common interest in certain issues connected with the project.

The Stakeholder-issue interrelationship diagram helps understand the issues that could potentially be a source of disagreement or agreement between stakeholders.

It uncovers common ground and therefore provides planners with useful insight and an example is shown as Figure 5. Once more, the technique used to gather this information is straightforward to employ.

· Again, in the group, brainstorm a list of stakeholders involved/concerned/connected to the problems. Time may be saved, if this list is available from earlier analysis. · As with earlier analysis techniques – write the names of stakeholders on Post-It notes (one stakeholder per note). · For each problem, consider the stakeholder and place them on the grid in the appropriate position.

Deliberate and debate the position until the group is in agreement.

Rachel Allen Client Manager The Leadership Factor Rachel works with a wide range of organisations from RBS to the YHA and from Littlewoods Shop Direct to the Forensic Science Service. This makes her far too busy to waste time watching football matches but she does ride horses and do outdoorsy stuff.

If you have any thoughts about this article you can contact Rachel at: rachelallen@leadershipfactor.com

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Opposition

Issue interrelationship

High Low

Stakeholder Power

High

When the grid is completed, particular attention should be focused on the stakeholders that appear in the top right hand quadrant. These stakeholders are the most powerful. The greater the number of strong supporters the better the chance of overcoming the problem or issue.

Conclusion By employing a range of simple analysis techniques, project planners can increase their understanding of stakeholder groups and how they are likely to affect the project at hand. The approaches covered are not only straightforward to facilitate, they are also flexible and can be adapted to suit a range of situations regardless of size. They can be successfully adopted to assist with making major strategic policy decisions or at the other end of the spectrum for making smaller scale departmental changes.

At the end of the day, they are designed to furnish planners with the type of information that enables them to make sensible informed decisions that will succeed in satisfying a wide range of stakeholders and gain support early in the project. S

Fast Guide

Emotional Intelligence

Although it was popularised by Daniel Goleman, emotional intelligence (EI) was developed by American psychologists, Peter Salovey and John Mayer in 1990.

Definition EI is knowing how you and other people feel plus understanding how to improve it.

EI is a combination of intrapersonal and interpersonal skills. The intrapersonal is internal, or self-awareness. It’s the ability to know and understand yourself, motivate yourself and manage how you behave. The interpersonal is external and is all about relationship management. It’s the ability to sense, read, understand and manage your relationships with other people.

Benefits People with high EI understand how to express their feelings accurately and sensitively and ensure that their emotions have a positive rather than a negative impact. Studies on both sides of the Atlantic variously report that employees with high EI achieved better financial performance, suffered less stress, depression and absenteeism, enjoyed better health and work/life balance, worked better in teams and are more likely to rise to the top of their organisations.

Emotion management There is nothing intrinsically wrong with anger as an emotion, but as Aristotle said, the trick is to be “angry with the right person, to the right degree, at the right time, for the right purpose and in the right way.”

The problem is uncontrolled anger that achieves nothing and probably makes you as well as other people feel bad. The

problem often starts with how you perceive the incident that triggers the anger.

A key belief of EI is that you can choose how you feel about people and events.

This comes from self-motivation – the ability to manage your emotions and channel them in a direction that enables you to achieve your goals.

Relationship management There are four steps to effectively managing relationships.

1. Reciprocity Give and take. Treat others how you want to be treated. Offer to help people at work as often as you ask favours of them.

2. Skills Understand how other people feel through dynamic listening (non-verbal as well as verbal cues), building empathy (the ability to see the world from other people’s perspective) and asking questions (don’t assume - ask people directly how they feel, what they think of your work etc.)

3. Keep relating Relationships build up over time. Bad as well as good relationships develop over time. To make sure they’re good ones, try to get to know the full person (e.g. meet them out of work as well as in the office, find out about their families and interests) and build trust by learning from each interaction and using that learning to make the relationship better.

Coaching A fundamental element of EI is that it can be learned and improved. Taking this a step further, a key skill of leaders (as opposed to managers) is their ability and willingness to develop other people’s EI as well as their own. Of course, there’s a whole raft of coaching skills that can be learned but as far as EI is concerned the critical thing is to find the time to talk to your staff about things like feelings, relationships, self-awareness, emotional control etc, not just what work needs to be done by the end of the week. S

FOR A COMPETITIVE EMPLOYEE SURVEY QUOTE contact Mark McCall on: 01484 467033 or markmccall@leadershipfactor.com

· employee engagement · · employee satisfaction · · drivers of engagement · · actionable recommendations ·

4. Engage To build a positive relationship over time, engage the other person as much as possible in different ways. Use different media face-to-face, telephone, email. As well as factual information, exchange thoughts, feelings and ideas.

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Book Review

Arrow Books

Social Intelligence Daniel Goleman

“Emotional Intelligence” sold more than five million copies worldwide. In his new book, Goleman draws on the new science of neuro-sociology to extend his concepts from a business context to the wider world of social relationships. Goleman describes social intelligence (SI) as the interpersonal part of EI and maintains that since most organisations function like a society, SI has fundamental implications for how leaders can build a positive culture.

According to Goleman, we are all wired to do two things at work:

Resonant leadership In view of the inter-related web of personal relationships, Goleman argues that it’s the job of the leader to harness employees’ positive emotions, a task that goes beyond good communications and even empathy. Calling it ‘resonant leadership’, he maintains that leaders must communicate their message in a way that moves others, although he also emphasises that it’s not enough to be a good communicator. Effective leaders will also walk the talk.

Goleman thinks this is even more important in a recession. He labels the opposite of resonant leadership as dissonant lead-

Get on, i.e. compete Get on with, i.e. collaborate.

For decades leadership has been based on getting on, competing effectively to climb the company hierarchy. Three recent trends are over-turning this tradition. First, many organisations are becoming much flatter. There are consequently few middle management positions, not as many rungs on the ladder. Second, the world is much more networked. Whether through email, texts, blogs or formal social networking sites, people maintain relationships with a far wider circle of contacts. Third, deference to those in authority is falling. Increasingly, leaders need to use consensus rather than command to manage. This all means that success for leaders and for those working their way up is increasingly based on networking – understanding and serving the needs of the people in the network and displaying the behaviours that are valued by network peers as well as leaders.

Succeeding in this world, says Goleman, requires highly developed SI.

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Stakeholder January 2009

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SUCCESS FOR LEADERS AND FOR THOSE WORKING THEIR WAY UP IS INCREASINGLY BASED ON NETWORKING ership and gives the example of a leader who fails to properly understand employees’ emotional reaction to current uncertainties. They may do this by not communicating enough, by under- or over-reacting to threats facing the company or by not recognising employees’ concerns. Goleman cites three behaviours in particular that will help them to achieve a resonant rather than a dissonant leadership style.

Perspective Employees must be confident that their leaders see the big picture, not just for the company and its future success but also

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for its people. They must convince the workforce that they understand all the things that affect employees.

Interest Individual employees are of course interested in their own personal situation and want their leaders to be as well. Leaders with good SI will make individual employees feel that they are genuinely interested in each of them as a person.

Concern It’s no good having understanding and being interested if you never actually deliver. To be fully engaged, employees therefore need to trust that they will always be able to count on their leader giving them real help if they need it. S

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