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On a regular basis, I conduct roundtables with CEOs and executives about how many of their employees understand the company vision. A common theme among all the organisations is that their executives all “live and breathe the vision,” but they often stumble with extending the same enthusiasm to other employees throughout the company. In particular, filtering the “why the company exists message” down to the lower levels of the company. Some even question if it even matters and whether “the German backpackers packing boxes for six months, or the Chinese computer programmer or the forklift driver” even needs to know.
It always reminds me of the oft-cited (but unconfirmed) urban legend of employee engagement that involves a NASA janitor being asked what he was doing. His reply was “helping to put a man on the moon.” Imagine what results could be achieved, if everyone in an organisation, even the cleaner, was inspired and energised by the company vision?
We all know that the business landscape is continually changing, faster than ever before. Companies that remain tied to maintaining the status quo are unlikely to survive. To keep ahead, organisations need to be regularly reviewing and tweaking their strategy, while having responsive employees who are always on the look out for what needs to be changed, in order to meet evolving customer preferences.
Unfortunately, while many organisations may have up-to-date information on strategy performance, they often find a disappointing gap between their ambition and results.
A study undertaken by Kaplan and Norton found that 95% of employees don’t understand how their day to day activities contribute to the strategy set by the executive team. In other words, the majority of employees spend their time working on activities and making daily decisions that are unlikely to move the company forward. Rather than spend time reflecting on how they can improve the customer experience, they are more likely to be in survival mode, serving a customer or attending to the latest drama. Not surprisingly, the same study found that 90% of company strategies fail to be achieved.
So why is there such a persistent gap between ambition and performance? Essentially, it’s because employees don’t truly understand the big picture and how their actions contribute to goals set by the organisation.
One of the major reasons for the lack of understanding is that CEOs present their top three priorities clearly on one presentation slide. However, they also have 39 other PowerPoint slides that say other things and important priorities get lost in the flood of information.
According to a Towers Watson study, organisations with highly effective communication practices are nearly twice as likely to significantly outperform their competitors compared to those who have low effective communication. And they are worth more – commanding a 19.4% market premium.
So how do you get everyone in your organisation to truly understand your organisation and where you are heading? Let’s take a look at five critical areas that have a huge impact:
1. Connect everyone to the organisational purpose
When you look at companies that have grown substantially in a few short years (think Google, Facebook and AirBNB), the company’s mission is always top of mind with leaders constantly repeating it and ensuring that employees understand it, even well before they are even recruited into the company. The reason this is so important is that it engenders trust.
The secret to high performance organisations is that they are high in trust – with both their employees and customers. Building trust is the foundation of doing business. In fact, high trust companies are more than 2.5 times likely to be high performing organisations in revenue growth than low-performing (Imperative Research).
And the central pillar for building trust is a corporate purpose that’s defined by a genuine commitment to the social good. This is an important way to counteract the suspicion, cynicism, and low-trust inheritance taxes within our society that business is all about making a profit. You build trust with your employees and customers when they can see evidence that you care. An inspiring mission about why your company exists makes it much easier to get employees aligned, if they all believe they are working towards a common goal.
A recent study by researchers at the London Business School and MIT’s Sloan School of Management found only a third of senior managers could correctly identify what the CEO had identified as the firm’s top three priorities. Yet, the most surprising finding was that when the researchers dug a little deeper, they discovered that this became more of an issue when someone in another department asked for help. A department head would say ‘yes’ to the request, but would fail to attend to it, mainly because they didn’t know how vital it was to the organisation as a whole, so other priorities for their business unit called their attention. The result was senior managers trusted colleagues in other departments or business units to deliver only 10% of the time.
Rebecca Homkes who worked on the survey said, “When you drop one or two levels below the CEO, your ability to form a holistic picture is simply lost. In this vacuum, you’re leaving managers across the organisation to prioritise by themselves.”
But it’s not just managers not being clear on what needs to be done that’s an issue. The lack of trust causes serious friction issues that makes it really hard to get work done efficiently. With department managers only trusting their colleagues to deliver 10% of the time, you have to wonder – what impact is that going to have on speed and costs and on their ability to execute a team project effectively?
2. Provide individual meaning to work
Successful leaders make an effort to ensure employees understand how their work makes a difference to the company. They align employees’ self-interest to a more meaningful, bigger purpose set by the organisation. As Scott Meyer, the founder from Ghostery says “People want to know; does it matter if I turn up to work? Does what I do move the needle on some metric for the company?”
High performance companies have highly targeted and frequent internal communication that explain the reasons behind major decisions. They don’t rely on generic SOS communication or “Send Out Stuff.” The bigger a company becomes, the more likely employees are drowning in information, but starving for wisdom. The wisdom comes from the CEO being clear about the why behind the company and how the vision and goals are in alignment with that. This also means addressing business conditions and challenges, a strong belief that the company will succeed (and why), as well as sharing organisational and financial performance.
It also means that direct managers customise company information to show employees how their work connects to the organisation’s mission and what’s in it for them. This is important because employees often don’t believe the CEO or executives, but are more likely to trust what their manager or supervisor says.
This creates a line of sight enabling employees to understand the big picture. But more importantly, employees are also more likely to initiate appropriate actions because they understand how their work is directly linked to business results. Employees with a clear line of sight are more likely to provide feedback as the organisation follows a new strategy or initiates major changes. Their quick response to changing circumstances provide a major advantage over competitors who are shooting in their dark.
Articulating the meaning behind work improves productivity. A study found that when call centre leaders illuminate how the organisation’s products and services make a difference, employee productivity spikes by 28 percent per shift.
3. Avoid making it about the numbers
Companies that focus on everyday functional tasks such as sales targets and KPIs subtly tell their employees that’s what is important. Over time people’s headspace revolves around making targets, but forget the reason why they are really employed. Essentially, creating efficient, scalable business processes engineers the meaning out of work. While a company can survive for some time on this path, over time they forget about the customer and become complacent. It increases the degree of executional difficulty and leaves it more vulnerable to competitive threats.
That’s why it’s so important that employees understand the real meaning behind the work that they do, the purpose of the organisation and the impact they are helping create for the world. Otherwise, they become so caught up in the day-to-day that they’re unable to notice when customers aren’t happy and processes aren’t working.
A further issue is that while a typical manager is skilled at hitting their numbers, few are able to provide inspirational leadership. The outcome is that they lack the ability to manage individuals to reach their potential, build and lead great teams and clearly communicate the company purpose. This ensures it’s more difficult to embed the company purpose throughout the organisation.
4. Seek feedback
One of the issues when leaders tell people about the new strategy is that they assume that telling them about it, means they understand it. Research shows something completely different.
A Harvard Business Review study found that almost half of top executives cannot connect the dots between their company’s strategic priorities: and two out of three middle managers say they simply do not understand their strategic direction. McKinsey and Company reported similar findings from its Organisational Health Index as did Timothy Devinney at Australia’s University of Technology in a recent experiment. Taken together, this research points to the fact that most leaders just don’t get what their organisations are trying to do.
What’s missing is that leaders blindly assume employees actually understand key messages. Often they conclude an affirmative response to, “did you understand?” is sufficient. Instead, to validate comprehension leaders need to ask questions that actually test for understanding. For example; “What did you remember about the first priority?” This can even be surveyed company-wide. A Towers Watson study found that high-effectiveness organisation also use internal surveys to verify that employees understand key messages.
What differentiates the best from the good companies is not whether they ask the questions, it’s how they respond to the answers. Make sure if you do survey employees that you follow up on all requests, so that employees believe you mean what you say.
5. Foster a Shared Language
Clear, actionable values are so important to an organisation. Not only because they help an organisation recruit the right people and inform people about what behaviours are acceptable, but because, they provide a common language. The same goes with a mission statement and vision.
The reasons why this is so important is that many leaders use terms that have many different interpretations. If you ask people what customer service means, or innovation, you’ll find everyone has different definitions. We each bring our own meaning to language and experience. Meaning does not reside in things nor is it even necessarily in words. Meaning resides in people. This is a huge problem if you want to achieve an outcome, because everyone will have different expectations.
According to the book, The Speed of Trust by Stephen M. R. Covey, one of the reasons why the meaning of words is so pervasive is that in every interaction – explicitly or implicitly, understood or not, there are expectations. And the degree to which these expectations are met or violated affects trust. In order to achieve results, you need to make sure that everyone is clear on what needs to be achieved and the related expectations.
A mission and values statement provides a clear set of vocabulary about the relationships between things, so that everyone is on the same page. It provides a framework for how employees need to think about what needs to be done and how.
Furthermore, great leaders take the time to really define their organisation and to continually communicate that and keep it fresh. They use stories, metaphors and visual cues to help employees feel, hear and see their future. Emotion matters in every type of business and the more sensory interaction in the employee experience, the better.
Purpose Before Profit
Companies that do extremely well in meeting their financial goals and continually moving the organisation forward, all have one thing in common – highly effective communication. Organisations that communicate effectively do a better job of creating “line of sight” for employees that helps drive behaviours to achieve desired financial results.
In effect, they build a community that fosters the feeling that employees, at all levels, are in it together. This can only be done through a shared sense of purpose that is appropriately defined, communicated and embedded, to provide employees, at all levels, with the context they need to understand how their work makes a difference to the world.
And it’s gradually building momentum with Fast Company proclaiming “Purpose above Profit” as the next big trend in business over the next 20 years.
According to Deloitte’s Millennial Survey 2015, 60% of Millennial respondents reported that they chose to join their current employer in part because of the organisation’s “sense of purpose.” In addition, 57% of respondents who perceived their organisation to have a “strong sense of purpose” reported a “high level of employee satisfaction” at their company versus only 23% of those who worked at an organisation without a strong sense of purpose.
Fostering a sense of purpose provides strong levels of trust which drive strong performance and more consistent success. When employees have a high level of trust in management and the organisation, the company as a whole becomes significantly better at achieving business goals.
This article was reproduced with permission on Huffington Post.
