Leadership, culture and employee engagement: Do CEOs and executives actually get it?

Over the past two years in Australia there has been some spirited debate around the value of employee engagement since the introduction of the Hewitt Associates Best Employer study. In fact more companies are seeking instant strategies and solutions to become ranked in the top 10 best companies to work for so that they may use this as a branding model in the marketplace.

Many CEOs seek the results or outcomes and work backwards in their strategies or build ‘new employee programs’ to deliver these outcomes. However clearly today’s employee base is far more intelligent and aware of what is happening in their organisation. They are also prepared to use their feet to find the right organisation and culture that they can feel part of – hence the appalling turnover figures that exist today in many companies.

Leadership

University studies in the US indicate that CEOs believe that greatest single impediment to growing their organisations is the lack of leadership talent, and this is now being mirrored here in Australia. You only need to talk with Australia’s leading executive search firms to know that their biggest challenge today is not only finding the right talent, but more importantly those executives that actually have the leadership capabilities to move teams or organisations forward where growth opportunities actually do exist.

Developing leadership capability in many of today’s Australian companies is a critical need, yet many boards and CEOs fail to recognise this need and continue to manage the numbers rather than investing in developing leadership. In my view, the first step in building a committed and engaged workforce (and in return achieving revenue, growth and results) stems from recognising the need to develop leadership capability not only at the top (one leader alone cannot change even a moderate sized organisation), but throughout the senior and middle executive levels of an organisation. Leadership Psychology Australia’s Terry Lee, one of Australia’s most respected and effective leadership gurus, has clearly identified that in today’s climate ‘the toughest challenge is not organisational change, but in changing mindsets”.

In his work with such companies as Cisco, Westfarmers and Fujitsu, to name but a few, Lee focuses on developing success through understanding what’s needed to transform the organisation, create a leadership culture and take leaders from being ‘good to great’. People leadership is also one of the four key factors of Best Employers, according to Hewitt’s study.

Employees also want leadership; they want a strategy and a culture that they can identify with and feel they can contribute to. Lousy leadership cannot be fixed by massages and free soft drinks. Employees are looking for leaders that demonstrate respect for their people by holding them accountable for results and then recognising their achievements with enthusiasm. Employees want leaders who can inspire them and ones that maintain a passion for outstanding achievement.

Culture and values

My strong belief is that culture drives organisational performance. The undoubtable reason why an organisation becomes successful is through developing a real and meaningful culture and a set of values that reinforce this culture. But perhaps the most important aspect of culture and values is the organisation’s ability, through its leadership team, to live and breath those values. I believe that without this approach an organisation’s culture, vision and values become nothing but a plaque that sits on a wall in the reception area.

Successful cultures, however, don’t just spring up by themselves. Professor Edgar Schein of MIT’s Sloan School Of Management has shown that corporate culture is developed by its leaders either when the organisation starts up or reinvented via a change in strategy. Strong cultures of global companies such as Hewlett-Packard, GE, IBM and Xerox made them leaders in their fields and this theory is again supported by the Hewitt study which identifies culture and values as also one of the four key success factors.

I have been fortunate to work for a number of organisations whose leaders understood the importance of culture and were genuinely interested in understanding and providing leadership to reinforce these values to the whole organisation. CEOs such as Terry Walsh (Cisco), Carl Olsen (Toys R Us) and now Giam Swiegers of Deloitte all understand the critical importance of cultivating and motivating leadership around a relevant culture and a strong set of values.

More than 80 per cent of CEOs surveyed in the 2003 Hewitt’s Best Employer study stated that their organisation’s ability to succeed would be impacted by three things: acquiring and retaining talent; quality of leadership; and organisational culture.

I’m often asked, ‘What is employee engagement, and what does it mean?’ Put simply, employee engagement is how organisations go about investing in their people practices to deliver better results. Best employers recognise that competitive advantage comes from people and aligning them with the goals of the organisation. There are a number of important frameworks that build an employee engagement model:

• Leadership. As I mentioned, this is where an organisation’s leaders are trusted; communicate more frequently, with transparency and integrity and are more passionate about their employees.

• Career development. Does the organisation actually focus and invest more in the learning and development of its employees?

• Culture and values. The organisation’s leaders can drive performance and results by articulating examples of the identified values in action, and then celebrate success and recognise employee achievements and company performance.

The final element of this framework is to complement the above with a range of employee wellness initiatives such as birthday breakfasts, family forums, work/life initiatives, health risk management programs and other things such as gyms and crèches. Unfortunately, as I mentioned, many CEOs and organisations tend to set these initiatives up first expecting to impact retention and engagement, and are then surprised when they fail to impact the workforce.

I need to emphasise here that these are cosmetic processes that do not by themselves make any impact on employee attitudes to leaders and indeed their own motivation. So my solution to this employee engagement question is to:

• Develop leaders who can create champion teams

• Develop a culture which impacts performance

• Align strategy to culture

• Compliment with employee wellness initiatives

• Create your employee engagement proposition

So my challenge to the CEOs, HR and business leaders is this: what are you waiting for? Employee engagement is critical to the success of your business, so start looking at practical and realistic ways you can change the focus of your company. Is your executive team just focused on the numbers or do they really understand the importance of productivity and how to achieve this without being dictatorial and increasing employee turnover? Do you have the courage to redefine your culture and values and reinvent your organisation, to not only achieve balance sheet success but inspire employee motivation and engagement?

Finally to those execs who are ‘managing for today’: have you really looked at your talent and leadership for the next two to three years and honestly assessed their capability to lead the organisation to success in the future?

In attempting to create some thought and debate around leadership and culture I have detailed but a few strategies that are available to business leaders to achieve both organisational success and employee engagement. If our current and future HR and business leaders understand my messages then they need to ask themselves: how do I influence this change and genuinely impact my organisation?

Alec Bashinsky is national director – People & Talent for Deloitte. Email: [email protected]

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