Saturday, November 24, 2012

Butterfly Effect: Do you agree there’s Link between Employees’ Disengagement & Global Economic Issues?

The more satisfied and inspired employees feel at work, the better performance can individual business achieve.

In chaos theory, the butterfly effect is the sensitive dependence on initial conditions, where a small change at one place in a deterministic nonlinear system can result in large differences to a later state.  The name of the effect, coined by Edward Lorenz, is derived from the theoretical example of a hurricane's formation being contingent on whether or not a distant butterfly had flapped its wings several weeks before.

One interesting online debate “Do you agree that there’s a link between disengaged employees and our global economic issues?” spurred very active brainstorming on how to engage employees, improve staff satisfaction, and unify their heart, mind at work.

1. Add Value Results in Engagement 

There's compelling evidence that employee engagement, especially in the form of employee involvement, leads to higher profitability. That's not to say that employee engagement is a pre-requisite for profitability, you can still be profitable even if you treat employees like cattle, but you'll be more profitable if you engage them. Since one key measure of capitalism is the profitability of companies, it seems to follow that employee engagement strengthens capitalism.

Why is engagement so critical? New scientific discoveries in neuroscience and physics are showing that the elements of consciousness that must exist first, such as inspiration, coherence, empowering beliefs, etc. and even more important than conventionally believed. It's the very quality of consciousness holds the potential for revelations in business performance and organizational culture.

The capitalism is the natural expression of free humans. Freedom is an innate condition of our creation. When humans are not restricted from their natural expression, the more a person has control over their own ability to build value in a capitalist system, the more engage they become. By its very nature, adding value results in engagement. When employees align, they bring their whole selves to work. You can feel it in the air when an organization has such vitality in its culture. As they create that dynamic culture, you can watch the assessment data show smaller and smaller entropy stats and the profit and share price data get bigger and bigger.

Engagement at many organizations is suspect, though - employees are certainly engaged in something,  but the quality of what people get engaged in matters most and that comes down to leadership consciously building a culture based on engaging values. Because when people mutually engage at the level of values, their behaviors cure entropy and create the vitality to maintain winning edges. 

The other concern is that the more we use external and extraneous labels to describe what we think companies should do to add multi-dimensional value, the more opportunities we give the companies to market apparent value instead of adding real value.

2. Cause Effect –Financial Performance & Corporate Social performance (CSP) Mutually Enforce with Each Other

One might suppose that companies that are operating optimally do a great job at helping all employees understand and appreciate how they can add value, resulting in high levels of employee engagement. As those employees feel good about themselves,  they are more likely to positively engage their communities with value added activities as well. The result, high CSP (Corporate Social Performance) 

There are data-driven studies that conclude that engaged employees are causal for higher profits, share prices, innovation, stakeholder loyalty, collaboration and more. There are certainly companies making high profits with poor employee engagement but they have a significant entropy which means they don't manage their human resources optimally. When employees leave the unengaged parts of themselves at home, the company can't fully capitalize on its most critical and usually most expensive resource, humans. 

Further, there is always an element of social benefits goal in any industry; it is however for the organization and its promoters to draw the balance between social and commercial objectives. It needs to be kept in mind that in a hugely capitalistic environment today, the basic human needs have gone to a much higher level. And only once these are satisfied, do organizations look at social goals.

From a marketing perspective, CSP, if done and adequately promoted, does build the positive aura around the organization and its products. It will, therefore, be quite natural to favorably inclined towards the company. Yes, employee morale does change, but the direct correlation with the financials of the organization is difficult to establish. Moreover,  there will be a time lag. Thus,  doing CSP is not enough. Promoting it is also equally important. And then One might suppose that companies that are operating optimally do a great job at helping all employees understand and appreciate how they can add value, resulting in high levels of employee engagement. As those employees feel good about themselves, they are more likely to positively engage their communities with value added activities as well. The result, high CSP (Corporate Social Performance) .
The issue of larger than life promotions which could lead to the organization getting more benefit than what it deserves. On the other hand, there could be those that do CSP but may not have the capacity to promote adequately. Depending on the time horizon that the stakeholders have, CSP could go to the back seat. There are two ways to approach the issue: 
  • Change the time horizon. The benefit of CSP is always a longer term issue. 
  • Change the rules of the game to give benefit and even promotion to such organizations in the shorter term
The first aspect is more an attitude issue. It is difficult to alter unless general sentiments change across the industry. However, there are organizations are doing it regardless of what others are doing. The second aspect is where the administration comes into the picture. The laws, benefits and the entire approach towards such organizations could be made favorable. In the course of time, the sentiments will change and with that,  the attitudes. The end result thus can be achieved better and in a shorter time frame.
From a cause-effect perspective, the high CSP causes high financial performance and high financial performance causes high CSP for the long term. As in the entire exercise, we must not forget the cold logic of the end consumer who looks for value for whatever he/she spends, and that applies to every penny spent, and anywhere in the world.

3. Reconnect Employee, Leadership, and Organization 

The core issue in many organizations today is: Employees or followers have lost a connection to the organization or the leadership of the organization. Leaders and organizations will need to determine where leader and follower relations could be improved, and take immediate steps to create an environment that stimulates overall positive organizational self-esteem and strengthens the overall connection between leader and follower relations.

If an organization is showing economic distress and if there are enough employees (followers) who feel connected to the vision/mission of the organization, employees will find the means to sustain business during challenging times and be market leaders when markets are thriving. The negative side: When enough employees feel disconnected to the mission/vision of an organization or leadership, it will only be a matter of time; the organization will fail in its market. NOT the other way around... 

What are the effective remedies for addressing employee engagement? The research has found that leaders who focus on "being interpersonally flexible" are the most effective at building trust with employees. Flexible leaders recognize that other's needs are at least as important as their own, and focus on achieving win/win outcomes. This is where comes in as leaders and employers. The leaders must help people understand how they can add value. The research also finds a strong correlation between the trust employees have for the leaders and their level of passion and commitment to their organization.

There are proven drivers of inspiration, making it possible to actually measure the "inspiration level" within an organization. The findings are easily actionable and the organization's inspiration level is a leading indicator of many other things now on the scorecard... Including engagement, productivity, turnover intent. 

At employee engagement working environment, Five Practices (Model the Way, Inspire a Shared Vision, Challenge the Process, Enable Others to Act) empower employees to reach high level of passion pyramid: Level1. To be respected   Level 2. To Learn & Grow Level 3 To be an “Insider”,  Level 4. To Do Meaningful Work,  Level 5. To be on a Winning team.

That also being said, "being trustworthy" is essential to success, not just for leaders but for the organization to build a loyal customer base. The challenge found is that being trustworthy does not guarantee that you will be trusted. There are many honest, ethical leaders who believe they are trustworthy (and to an extent they are) and yet they fail to earn the trust of their employees and perhaps consumers. So it is actually what leaders "do" that builds trust, but many don't understand what to do.

There is no question that as an organization, company or nation, if we capture the whole "being" of every member,  then the "doing" will be made so much easier. Capturing organizational spirit has to "lead from within", be part of it, identify with it, share its values and its beliefs. Only then,  can we hope to influence it, and lead to a creative and productive workplace.

So there is indeed a butterfly effect: Each individual creates energy, each computer consumes energy, each business fill with energy, the world we live in flow with energy, and nature is full of energy. The more satisfied and inspired employees feel at work, the better performance can individual business achieve, and sure, employee’s  engagement will impact global economy overall. 


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