Do you lead through transactional benefits or emotional benefits?

If you have gone to Business School or studied economics, you would have been taught that humans are self-interested creatures who like to do minimal effort for maximum pay.

Yet, as behavioural economist Dan Ariely argued in his book, Predictably Irrational, humans are far less rational than economic theory assumes.  Our emotions drive our behaviours.

When making a purchase, customers seek to fulfil both their functional needs (what it does for me) and emotional benefits (how it makes me feel).

Companies like Google, Apple and Mercedes-Benz have all done a stellar job at getting into the minds of their customers and designing products, right from the start with a maniacal focus on emotional benefits.  The result is captivating products that excite customers and make them feel great when they use them.   According to authors, Peter Boatwright and Jonathan Cagan in the book Built to Love, emotional content drives product awareness, word-of-mouth referrals and motivates repurchase.

While marketers may have wised up to promoting the emotional benefits of products and product engineers are learning to design emotionally engaging products from the ground up, there is still one area that business leaders struggle to connect emotionally.  And that’s with their own employees.  

Where it all Began

Over hundred years ago, in the industrial age, factory owners wanted compliant workers who were low paid, content with being injured at work and easily replaceable. Humans were considered just mere cogs in a machine.  More recently, we moved to the knowledge based economy, where a demand for University educated employees was required who followed instructions, worked hard and undertook heavily controlled and planned work. Functional benefits of the job (eg: pay, annual leave) were mostly on offer.

Now, we are transitioning into the connection based economy.  Jobs of today require more emotionally intelligent skills – such as empathising, collaborating and creating.  According to Geoff Colvin, the author of Humans are Underrated, people want to work with other people in solving problems, share stories with them and create new ideas.  It also means that people weigh up the emotional benefits they can receive from their work, with the functional.

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.

Today, we have The Great Resignation being a thing where people are leaving their jobs for more meaningful work.  But still companies don't quite get it.

As I was quoted in saying in HRD NZ magazine, “Few business leaders truly appreciate that improving employee happiness means focusing on the emotional benefits. In other words, the impact the company makes to the world and how each person contributes to that.  It’s the relentless repetition of the company mission and why the company matters.  It also means promoting how achieving the goal or vision will make employees feel – emotional benefits such as trust, job security, achievement and empowerment.”

Why is it So Hard

Emotion is fundamental to being a human.  Although, most people understand that humans are emotional, what has been poorly understood is how to use emotionally based communication on a daily basis to lead others.  Leaders who can communicate the why behind every message have the emotionally intelligent skills necessary for the connection economy.

But it's not easy. Many leaders avoid spending the time having conversations with their people to align their work to the firm's purpose. 

In my research, it's based on two reasons.  The first one is that it defies what they learned in business school or through observing past leaders.  The second is because dealing with humans is messy.  If you are not a people-person then having to have be interested in other people, giving credit and encouraging others can be hard.  And it feels like wasting time.  

The Integrated Trust Building System

One of the ways to help more numbers-driven leaders lead people is to give them a system to help them emotionally connect with others.

Introducing The Integrated Trust Building System which I unpack in my book, TRUSTED TO THRIVE: How leaders create connected and accountable teams.

Workplaces require leaders who reassure people that their emotional needs are being met through both verbal and nonverbal communication.  It unpacks how to communicate to people both the transactional and emotional benefits of work.  This system helps leaders focus on the three most important practices to emotionally engage employees, so that their limbic brain trusts the situation.  These being:

1. Fostering safety

2. Creating connection

3. Stepping into a meaningful future.