Building capacity for employee engagement

The great thing about building engagement capability is the broad range of benefits. Engagement reshapes the nature of the relationship the organisation has with its stakeholders, be they customers, suppliers, owners, employees or the community. Reshaping the relationship with employees appears to have significant potential.

It doesn’t take long to find a damming array of reports revealing that, in most cases, employee engagement is woeful. Without labouring the point, here are some examples:

Employee engagement by region, from the
2011 BlessingWhite Employee Engagement Report 

The good news is that there appears plenty of scope to improve engagement. The even better news is, that the capabilities required to improve engagement with employees will be beneficial in other stakeholder relationships.

I may be biased, but engagement capability needs to be at the epicentre of organisational development.

Think of it this way; What action would you take if only a third of your vehicle fleet operated reliably, or your core systems rarely achieved their potential? I am sure you would focus your attention on it. So why is it that many organisations are unable to more fully engage their employees?

Engagement capabilities

Some organisations survey employees to learn more about engagement, but these surveys can actually further erode engagement if employees perceive that there is no follow up. Further analysis is probably not useful. Fortunately, the essence of engagement is in one-to-one relationships between people, and therefore capability for engagement can only be enhanced when individuals work on their engagement skills and develop those aspects of character that support engagement. These include integrity and trust. The Korn/Ferry Whitehead Mann UK Survey found a clear deficit of these qualities where there was poor engagement.

The engagement spiral

The popular TV series ‘Undercover Boss” week after week demonstrates what happens when company leaders take time to get to know their employees. Typically their employees respond strongly when their boss acknowledges the effort they invest in the company. And as they get to know something of the private lives of their employees, empathy increases.

Of course organisational leaders do not have the time to engage with all employees, but all employees should have the opportunity to engage with someone with a leadership role. A sense of belonging and connection with the wider social group, including its leaders, is a fundamental human drive.

Developing engagement capability

The skills of engagement are simply communication skills, including listening, acknowledging and empathy. These are supported by qualities of character such as integrity and trust. Formally, these skills can be fostered in organisational development programmes in communication, leadership, change and organisational learning. And given the critical role that engagement has in 21st century organisations, they must be regarded as core skills for performance management purposes.

In earlier series of posts I identified engagement as one segment of the communication spectrum. Understanding the distinctive nature of engagement helps us to be more discerning about how we communicate, and helps us aspire to higher expressions of communication.

The tools needed to improve engagement are simple and close at hand. There are no quick fixes – the journey to improving engagement requires constant vigilance, but the returns promise to be significant.  Understanding the communication spectrum is a good place to start.

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More engagement lessons from the Canterbury earthquakes

Recently, John Hamilton, the Director of Civil Defence Emergency Management, New Zealand, spoke about the Canterbury earthquakes at the National Board meeting of Neighbourhood Support.

Resilience and personal fortitude

John was effusive in his praise for the “personal fortitude” of Cantabrians and the resilience of their communities. Their response has negated the myth of weak neighbourhood spirit prevalent in pre-quake discourse. The tragic impacts of the earthquakes have strengthened community engagement and communication.

the Student Volunteer Army in action in Christchurch

In immediate response to the quakes, Christchurch citizens checked on their neighbours. In the following days and weeks, community groups such as the student army arose and self-organised to check on people’s well-being and remove the liquefaction flooding streets and properties (see an earlier post). Unlike many overseas disaster scenes, Christchurch people used emergency accommodation for just a few days and quickly returned to damaged homes (where that was safe). Most of the fatalities occurred in the CBD, but thankfully residential buildings performed well and no lives were lost in residential building collapses. And, according to John “schools did a fantastic job” – no school children lost their lives.

Situational awareness

But the people of Christchurch and Canterbury weren’t anticipating an earthquake, and may not have been as well prepared as they could have been. The authorities found it difficult to get timely and accurate intelligence about immediate impacts and particularly in suburban areas. Effective community networks established before any disaster help the authorities gain situational awareness and better target response actions.

John believes that Wellington, New Zealand’s capital city, has heeded lessons from Christchurch and is improving community preparedness. Wellington sits on a major fault line and people have been anticipating “the big one” for decades. Wellington civic leaders have engaged at community level to build emergency response capacity. Should a big earthquake occur, Wellington’s strong community infrastructure should  enable a good response.

Neighbourhood Support’s role

Community groups such as neighbourhood support play an important role in fostering community engagement. Neighbourhood Support was originally set up to improve security and reduce crime in neighbourhoods. This necessary, but reactive role, is dramatically enhanced by the more pro-active community engagement role – where people are encouraged to get to know their neighbours. Thus resilience is built into communities as people learn (or relearn) to engage with neighbours. Resilient communities are better placed to respond to destructive events, whether they be natural or man-made. And on the positive site, increased neighbourhood engagement opens up opportunities for an enriched social life and greater prosperity through community initiatives.

If you want more information about neighbourhood support, or would like to form a neighbourhood support group check out the Neighbourhood Support New Zealand website. Please comment – I would be interested to know about similar initiatives in other countries.

image credit: http://iprepared.blogspot.com/2011/02/helping-each-other.html

Engagement stories – back yard angels

Di Celliers was concerned about the increasing demand on food banks to feed the poor. She was also aware that a lot of fruit goes to waste in back yards. She drew on her social and church networks and workmates at the ASB bank to inspire and mobilise people to pick fruit in backyards.

In a little over a month, Di’s initiative has spread across Auckland and the idea has been picked up in other regions in New Zealand. Auckland City Mission now collect the fruit weekly and distributes the fruit to 70 foodbanks.

Community Fruit Harvesting now has a Facebook presence and a website is hopefully on its way.  The Facebook page is a great example of community engagement and social networking’s capability to connect people in a cause. You can hear Di talking about the initiative on National Radio. Here’s Di picking citrus.

Another Auckland initiative is ooooby.org, (Out of our own back yards). It has been set up as a social business that harvests produce grown in backyards, micro growers and from local farms. Customers sign up for a $27.90 weekly box of fruit and veges.

These initiatives are inspiring steps to a more sustainable means of food production and supply. The benefits include providing free or inexpensive, nutritious food, building community bonds through engagement and volunteering and providing micro-enterprise opportunities.

Here is Muhammad Yunus explaining the social business concept.

Images used by permission of Di Celliers

Engaging stories: rebuilding Christchurch

The City of Christchurch, New Zealand was devastated by a series of earthquakes. The largest, on the 4 September 2010 wrecked havoc in the central city, but the second quake on 22 February killed 181 people and all but destroyed the central city. The response of the people of Christchurch is an inspiring engagement story. On 11 August, the Christchurch City Council released it draft Central City Plan.  The plan was immediately received with acclaim.

From an engagement perspective, the plan embodies three foundational strengths:

  • inspirational leadership
  • inclusion of the indigenous Ngāi Tahu
  • comprehensive public participation and community engagement

 Inspirational Leadership

From the day of the first quake, the indefatigable Mayor, Bob Parker fronted up and communicated clearly, exuding a aura of compassion and hope. As in the image below, he was often seen on camera with a person translating his words into sign language, an unspoken symbol of inclusion. When the Council released the draft plan there appeared to be an evident sense of celebration and unity in the council – not that common in local body politics.

 Inclusion of the tangata whenua

The Mäori tribe Ngāi Tahu are the indigenous people of the Canterbury region. In formal occasions, it is common for Mäori to acknowledge tipuna (ancestors) and those who have died. The draft plan beautifully incorporates words authored by Ngai Tahu to set an appropriate context for the plan. Here is the English translation:

This mihi is given by the Ngāi Tahu Rūnanga – Te Ngāi Tūāhuriri- to acknowledge and respect the people who have been lost and those whose hearts are grieving them, and the sorrow of this .  It also acknowledges the losses and pain of all people in Christchurch and Canterbury who have suffered as a result of the earthquakes.  Ngāi Tahu recognise their atua/god Rūaumoko as having pulled his umbilical cord and caused so much to break, including land from the mountains to the sea.  While acknowledging the pain, Ngāi Tahu see us uniting us as one people – the survivors (morehu) of Christchurch and Canterbury.  The mihi is a call to Christchurch to rise up, and together to rebuild Christchurch brighter and better.

Public participation – share an idea

Following the second quake, the City Council launched Share an Idea, a public engagement campaign to lay the foundations for the rebuild. In six weeks, the website, www.shareanidea.org.nz generated over 58,000 visits. Ideas were also harvested through facebook and twitter. Virtual engagement was complimented by a two-day community expo (attended by over 10,000 residents) and a series of public workshops. These are two of the larger examples of over 100 stakeholder meetings. (See the draft plan for more detail of engagement).

A total of 106,000 ideas were shared during the six week campaign – that is one idea from every 2.2 residents. Share an Idea generated a level of community involvement that has never been seen before in New Zealand.

The fruit of the engagement process

The thousands of ideas clustered into 5 themes:

  • green city
  • market city
  • city life
  • distinctive city
  • transport choice

The plan includes contributor’s comments to directly link the ideas generated to the completed draft plan (click on the thumbnail for a larger image).

Mayor Bob Parker described the new Christchurch as “a safe, sustainable, green, hi-tech, low-rise city in a garden”.

Out of adversity comes an unprecedented opportunity. We are embarking together on one of the most exciting projects ever presented to a community in New Zealand, perhaps the world…This is our city, it will rise again

Bob Parker

This is just a taste of a truly inspirational document. Anyone interested in stakeholder engagement, community participation or organisational development will benefit from a closer look.

Stakeholder engagement pays!

This blog positions stakeholder engagement at the leading edge of sustainability and also, as a core process underpinning a superior business model is transforming older, extractive and exploitative models. However, it is also great to have evidence that stakeholder engagement supports financial sustainability in addition to environmental and social sustainability.

Witold Henisz led a major Wharton School research project to deliver such evidence summarised in Spinning Gold: The Financial Returns to External Stakeholder Engagement. Here is the abstract from their document:

We provide direct empirical evidence in support of instrumental stakeholder theory‘s argument that increasing cooperation and reducing conflict with stakeholders enhances the financial valuation of a firm holding constant the objective valuation of the physical assets under its control. We undertake this analysis using panel data on 26 gold mines owned by 19 publicly traded firms over the period 1993-2008. We code over 50,000 stakeholder events from media reports to develop an index of the degree of stakeholder cooperation or conflict for these mines. By incorporating this index in a market capitalization analysis, we reduce the discount placed by financial markets on the net present value of the gold controlled by these firms from 72 to between 33 and 12 percent.

My (limited) understanding is that the reduction in net present value is increased significantly when stakeholder co-operation is low and stakeholder conflict is high. Here is a video explanation of net present value.

Apart from the great result, what impresses here is the size of the study and the stunningly positive result for stakeholder engagement. Notable too, is the assertion that mining companies that were once known for a myopic short-term view, are now “global leaders in the implementation of stakeholder engagement”.  A participant in the research commented:

It used to be the case that the value of a gold mine was based on three variables: the amount of gold in the ground, the cost of extraction, and the world price of gold. Today, I can show you two mines identical on these three variables that differ in their valuation by an order of magnitude. Why? Because one has local support and the other doesn‘t. (Yani Roditis, COO Gabriel Resources, interview by authors)

The researchers position the two factors of high stakeholder co-operation and low stakeholder conflict as essential to building the implicit or explicit social license to operate. Investing in positive stakeholder relations builds both social and political capital.

The nature of the research confines analysis of the benefits of stakeholder engagement to financial factors and shareholder value. As such it removes the tension between proponents of shareholder value, such as Milton Friedman and the broader stakeholder theory such as Edward Freeman.

Broader stakeholder benefits

In addition to the financial benefits of effective stakeholder engagement, there are other less tangible and quantifiable benefits. As more businesses learn to take a less extractive stance and engage more, the benefits of greater social capital compound. Trust is built and fractured communities develop more cohesion. If the ethos of external engagement of these mining companies becomes culturally embedded throughout the organisation, local people employed in mining operations, should also benefit from a more engaging workplace. Ideally these cultural practices become more manifest and normalised in worker’s families and the wider community. How is this quantified?

This landmark research in sustainability provides much-needed hard data to demonstrate the benefits of stakeholder engagement. One disappointment is the title – associating the PR metaphor of “spin” is unfortunate, as effective stakeholder engagement is the antithesis of spin. Ideally engagement is based on authentic and transparent communication rather than the more manipulative intention of spin. But hats off to Witold Henisz and his team for a superb research contribution.

Sustainability leadership report

How do you know if a company is green-washing, or over-promoting its sustainability performance? Brand Logic’s recently released Sustainability Leadership Report compares the perceptions of sustainability of 100 prominent brands, with their sustainability reality.

Their matrix, sorts the brands into 4 categories:

  • leaders – those who perform well in environmental, social and governance (ESG) dimensions of sustainability and successfully communicate their achievements
  • challengers  – who are performing well, but not getting enough credit
  • promoters – who are credited with ESG performance ahead of their actual performance
  • laggards – who are low in both dimensions
brandlogic’s Sustainability Leadership Report matrix
Notice that IBM hits the sweet spot of high sustainability performance and high sustainability perceptions.

The great news

This report surveyed three groups, purchasing/supply management professionals, investment professionals and graduating students.  They were asked :
When evaluating a company as a potential:
  • investment or investment recommendation
  • supply chain partner
  • employer
how important is it to you that the company act as a good corporate citizen, operating in a socially and environmentally responsible manner?
An impressive 88% felt that this was somewhat important or extremely important –  45% responding that it was extremely important.

Leading engagement

It’s no surprise that the attributes required for effective leadership are those required for effective stakeholder engagement. My website, Stakeholder Engagement offers resources for developing capability for stakeholder engagement. Alongside specific stakeholder engagement capabilities, I have identified leadership, organisational learning, communication and adaptive capacity (change) as four essential capabilities to support enhanced engagement.

Compare this to the findings of the Hay Group 2010 Best Companies for Leadership research. The top twenty companies collectively, from General Electric at number one, to BASF are huge, and therefore have potential to do a lot of good by modelling leadership excellence.

Hay Group’s Ruth Wagemen pinpoints the practices the twenty best companies are more likely to do than the rest of us:

  • “developing structures and practices that locate the best practices wherever they are, and whoever has them, and make sure that that’s what’s getting used throughout the organisation”
  • they were “far more likely than everyone else to have an ex-pat programme that is intended to help people learn how to operate really effectively in a different culture and to lead effectively in that context”
  • “were more likely to actively collect the best practices in leadership development throughout their subsidiaries, throughout the world, and to harvest those lessons and to share those practices with the rest of the organisation”
  • “were much more likely to pay men and women the same, for the same kind of work.”

Organisational learning to the fore

What is particularly encouraging is the strong thread of organisational learning through these findings. The idea has been around for a long-time, but is yet to become mainstream. Bob Garrett relates how organisational learning emerged after World War Two, with the work of Reg Revans, Fritz Schumacher and Jacob Bronowski. Chris Argyris gave it impetus and Peter Senge popularised it in The Fifth Discipline. It appears that organisational learning’s potential is being tapped in these trail-blazing companies. Peter Senge urges us to “stop thinking like mechanics and to start acting like gardeners”. One interpretation of this, is to leave behind industrial age practices of organising and management, and embrace the more organic and emergent processes of the knowledge age.

Businesses can scour their internal environment for knowledge as is modelled by the top 20, and seek learning from external stakeholders too. Fostering stakeholder engagement capability can only benefit this process.

Hay Group links

Organisational learning links