Employee Engagement: The Critical Catalyst for Innovation Success
The Secret Behind Higher Innovation is Simple: Increase Employee Engagement. Here's How...
There is an employee metric that may be the single biggest indicator of a healthy, innovative organization—employee engagement.
Employee engagement a measurement of the level of emotional commitment, dedication, and involvement an employee has in their job and the organization. It is a measure of how motivated and passionate employees are about their work and how connected they feel to the company's mission, values, and goals.
As we spoke about in a previous post, engagement is key to maintaining an edge through future waves of change. In fact, it may be the single biggest contributor to your organization’s innovation success. Here’s why:
1. Employee engagement is a Leading Indicator: While metrics like turnover and absenteeism are lagging indicators of problems, employee engagement is a leading indicator. Low engagement levels can signal future issues with retention, productivity, and customer service before they actually manifest themselves. One study found a 59% lower turnover rate in engaged employees compared to less engaged peers.
2. It’s linked to performance: Numerous studies demonstrate a clear link between high employee engagement and better organizational performance metrics like productivity, profitability, customer loyalty, and safety records.
3. It gives you a holistic view: Engagement captures the overall attitudes, emotions, and motivation levels of employees. Other metrics like turnover or training metrics provide a narrower view.
4. It’s a measure of employee well-being: Engaged employees tend to experience higher well-being, better health, and a more positive work experience overall.
5. Engagement = higher innovation. A mind-blowing data point: Research by IBM Smarter Workforce Institute revealed that engaged employees are over 300% more likely to provide a new product/service idea than disengaged employees.
6. Engagement is profitable: Looking for an ROI? Gallup's meta-analysis found that highly engaged business units realized a 21% increase in profitability.
7. Engagement = competitive advantage: An engaged workforce is viewed as a key competitive differentiator in today's talent marketplace. Companies with high engagement can attract and retain top talent more easily.
In fact, employee engagement is a clear differentiator between high-performance and low performance companies.
For most companies, employee engagement at a critical low and is possibly the biggest internal threat for organizations. According to Gallup, the average employee engagement is around 32%, down from 36% in previous years. For companies outside the United States, that rate drops to 23%.[1]
Think about that: as a “normal” company has less than 1/3rd of employees that are actively and meaningfully involved in their work.
Approaching the inverse, that means that at least two thirds of employees are emotionally checked out, putting in time but not energy or focus into their work. The result is lower productivity, higher absenteeism, poor customer service, and lack of innovation.
By contrast high performance, best practice companies score nearly twice the level of employee engagement, around 70%. Further, they have continued to maintain nearly that high level in recent years, despite dramatic changes to work environments.
So, the easiest way to become more productive, innovative, and profitable may be to improve engagement.
It should be noted, that aside from the high-level company benefits, there are clear benefits from and for employees of high engagement, including:
1. Job Satisfaction: Employees who are engaged tend to feel a sense of fulfillment and satisfaction with their roles, responsibilities, and the work itself.
2. Commitment: Engaged employees are committed to the organization's success and are willing to go the extra mile to contribute to its goals and objectives.
3. Motivation: Engaged employees are intrinsically motivated to perform their best and take pride in their work, often going beyond what is expected of them.
4. Advocacy: Engaged employees tend to speak positively about their employer and act as ambassadors for the organization, both internally and externally.
5. Retention: High levels of employee engagement typically lead to lower turnover rates, as engaged employees are less likely to seek employment elsewhere.
6. Productivity: Engaged employees are generally more productive, as they are focused, energized, and committed to delivering quality work.
These benefits should make it clear that engagement is an important factor in your company’s ability to innovate and execute.
So, what can you do to take advantage of all the benefits of employee engagement?
There are three places to start.
Measuring engagement
First, start measuring your employee engagement levels to provide a benchmark.
There are several methods and tools commonly used to measure employee engagement levels, including surveys, focus groups, qualitative interviews, and productivity and attrition metrics. For the sake of brevity, I am going to highlight just three:
Attrition and Turnover Rates. While these are lagging indicators, as we discussed, they can be a sign of a bigger problem of engagement. High turnover rates, especially among top performers, can be a sign of low engagement levels, and warrant further measurement and investigation.
Observation and Feedback. Solicit feedback, talk to people, create more open-door policies, create a suggestion box or anonymous electronic submission.
Employee Net Promoter Score (eNPS) One of my favorites, the eNPS is a simple tool adapted from the customer Net Promoter Score, measures how likely employees are to recommend their company as a great place to work. Just one simple question and a text box for feedback is an easy way to start.
Of course, the most effective involves using a combination of these methods to gain a comprehensive understanding of employee engagement across the organization. Once you find these measurements a regular part of our company health check, you can develop more sophisticated and granular method such as the Gallup Q12 question set.
One benefit of measuring is the Heisenberg effect: just by the act of observing and asking about engagement sends a message to your team that may positively impact their engagement.
The second key principle for improving employee engagement is to establish the right foundation.
I can’t emphasize enough the importance of laying the right foundation as the catalyst for engagement, improved culture, and strategy execution.
And that foundation generally includes a vision, a mission, a defined strategy, and clear individual responsibilities.
Your success as an organization is mainly dependent on your ability to pull together a team of individuals and align them to continually engage in the tactical and strategic actions that lead to differentiation. Your ability to do that in vastly improved by defining those foundational elements of the organization and individual’s work.
If you think your company doesn’t need a clear mission, vision, and defined strategy, consider this: according to a PWC survey, 93% of employees don’t understand their company’s director or strategy.[2]
Define them, make them clear, and clearly state them again and again.
The third, and last is actively encouraging engagement by inviting employees to participate and rewarding them properly.
Here are a few ways leaders can invite engagement:
Provide motivation and inspiration: After sharing your mission, vision, and organizational goals and strategies, recognizing employee achievements towards achieving them.
Train Management to Coach. According to Gallup testing, 70% of the variance in team engagement is determined solely by the manager. Two of the simplest things managers can do to increase job satisfaction and engagement is to be actively interested in the employee and ask them what help they need to accomplish their job. So, train managers in effective coaching of their employees.
· Enable decision making. Leaders can foster a sense of ownership and enable employees to participate in making meaningful decisions.
Create meaningful work: Positive leaders connect individual work to the broader organizational goals and enable and invite their co-workers to participate in meaningful work.
Create a positive work environment: Leaders that promote a culture of respect, recognition, and appreciation achieve higher employee satisfaction and a decreased desire to leave.
· Model risk tolerance. Supporting this, of course, is the development of a culture that is tolerant of risk and mistakes, providing the psychological safety and career safety to know that appropriate risks are encouraged.
Regarding risk tolerance, former Amazon CEO, Jeff Bezos was a master at delineating the concept of acceptable risks and decision making. He clearly encouraged his team to identify the type of decisions that were reversable and encouraged his team to take risks. Amazon had plenty of mistakes (Fire Phone, Ebay competitor) and learned from them. He enabled his teams to take risks which increased interest in participation and engagement.
Studies are clear on the impact of employee engagement on organizational innovation and demonstrate that it’s critical to getting the most from your team and motivating them to contribute.
Importantly, these steps are not just an attempt to boost engagement levels. They are an indication that employees have a voice, and the ability to express ideas and concerns freely, which motivates them to contribute. When employees feel heard, they're more likely to contribute their unique perspectives, leading to a broader range of ideas and breadth of innovation.
Things to consider:
1. What are the best ways for us to measure employee engagement levels across our organization? How can we utilize methods such as surveys, focus groups, productivity metrics, and turnover rates to get a comprehensive view?
2. Do we have a clear, well-articulated company vision, mission, and strategy that employees can connect their work to? How often do we reinforce this foundation?
3. What steps are we taking to actively invite employee participation and input?
4. What examples do we have of employees feeling empowered to make decisions and voice their ideas? How do we increase those?
5. How effective are our managers at coaching employees, providing motivation, and recognizing achievements? Do we provide sufficient training on building an engaged team?
6. Do we create an environment that promotes psychological safety for taking risks and learning from failures? Or does fear of mistakes stifle innovation?
Until next time, lead with purpose.
Will
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[1] https://www.gallup.com/394373/indicator-employee-engagement.aspx
[2] http://www.strategyand.pwc.com/ media/ le/Strategyand_Slide-Pack-Strategy-execution-survey.pdf