Discretionary Effort Is a Big, Dot Deal

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Discretionary Effort Is a Big, Dot Deal

Since commencing research on what ultimately became our first book, I have taken a rather steely-eyed approach to the subject of employee relations. A data-driven sort, I suspect that, had that research not produced clear linkage between worker attitudes and corporate performance, I would have found something very different to do for a living. But it did, and thus work at the intersection of people and profit has been the main event around here for better than fifteen years.

With each passing month, set of quarterly earnings reports, and new worker engagement survey, there is further evidence that the nexus between people and profit is a big, dot deal. Witness Gallup’s 2013 State of the American Workplace report which suggests that lost productivity due to worker disengagement now costs U.S. employers in the neighborhood of $500 billion annually, or roughly 3.3% of our $15 trillion national economy.

Let’s just say for grins and giggles that Gallup’s math is somehow off by one-third on the high side (I doubt it), and that only half of the remaining productivity loss could effectively be captured through better management performance. That still leaves better than a 1% potential improvement in GDP on the table, and very much within our grasp. In relative terms, that would cover the entire defense-related portion of the recent eight year budget sequester, with enough left over to buy the U.S. Navy a couple of new Nimitz-class aircraft carriers.

The same principle holds true on an organizational level. For fifteen years we’ve documented, most recently in our 2012 book, Contented Cows STILL Give Better Milk,  the outsized performance of employers of choice relative to their peers and market averages. As a case in point, the average annual total stock return for the twelve newly named “Contented Cow companies” during the period 2002 – 2011 was 10.7%, besting the broader market average by a whopping 9.7% annually, creating a wealth premium of approximately $70 billion annually. Nuff said?

In a recent presentation for University of Memphis School of Business students, I ventured that, over the next 20 years, discretionary effort, that extra morsel of effort that is applied exclusively at the will of the individual, will have greater effect on productivity and profits than the continued exploitation of technology. We’re not anti-technology mind you. In fact we tend to be fairly early adopters, but it seems unlikely that we’ll have another equivalent of the Internet invented every decade. Moreover, given that worker engagement levels are presently at sub-surface (whale poo) levels, let’s just say that there is a lot of low hanging fruit.

Here are a few steps wise managers and organizations are taking to improve worker engagement, and thus unlocking discretionary effort and better business performance:

1. Getting serious about personal development plans – For years (no, decades) most of us have paid lip service to creating and executing personal development plans with our staff. A funny thing happened as we began the climb out from the Great Recession. Workers at all levels began making it known in no uncertain terms that as long as they were going to have to provide their own job security, they expected more and better help in the learning and development department. Indeed, analysis of any legitimate engagement study reveals that learning and self-development are always among the top 3 engagement drivers. Aside from better developmental assignments, workers are looking for help with securing professional accreditation and KSA’s to make them more competitive for their next job (hint). As but one manifestation, overtaxed L&D organizations are turning with greater regularity to external coaches to  partner with high potential employees to help execute those plans. That is particularly the case with newly promoted organizational leaders (at all levels).

2. Reacting quicker to misfits and poor performers – Fans and even casual observers of Major League Baseball were witness to an unusual social drama this summer wherein two dozen or so players suspected of cheating via performance enhancing drugs were left twisting in the breeze for months as the league figured out what to do with them. In the interim, not just the involved players, but their teammates and fans grew highly agitated over the agonizingly slow pace of justice (about as slow as a Yankees vs. Red Sox game).

Taking a lesson from Major League Baseball perhaps, smart leaders recognize that being slow to move on people who either don’t fit or can’t / won’t perform is unkind to the person involved, and it poses a terrible drag on the morale and productivity of those around them. To be sure, really good leaders, the ones we call Leaders of Choice, are neither reckless nor callous about dealing with these matters, but once it is apparent that the situation is untenable, they act.

3. Getting better seed corn – Any good baker will tell you that great cakes start with great ingredients. That is as axiomatic in the workplace as the kitchen. If you want contented (read engaged), high yielding workers, it’s important to start with folks who have sufficient bandwidth, desire, and the capacity to be contented on your team. Over the course of the Great Recession and our climb out from its depths, many of us have not taken time to sharpen our sourcing and selection processes, to wit we could quickly be disadvantaged as hiring resumes (and it is).

Moreover, it has been so long since some of us were in a serious recruiting mode that we have missed much of a generational shift in the workspace. Consider, for example:

  • How mobile-friendly is your recruiting process (end to end)? For that matter, how candidate-friendly is it? (Remember, 138 characters + an RT can make a big difference.)
  • What have you done lately to establish, burnish, and take advantage of your employer brand? Are you regularly doing employee surveys to get feedback from the people who define that brand?
  • Do you have serious Millenial involvement in your recruitment process? Never mind involvement, let them run it.
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