By: Alaina Love and Andrew J. Sherman
About this Column:
The Governance Corner is a periodic column on governance, leadership and strategic best practices that I will be writing for WashingtonExec. Contributions will feature both my thoughts on trends and developments, as well as co-authored columns and interviews with the region’s best leaders. In this column, we focus on our nation’s crisis in productivity – our underemployment rate.
While our politicians and policy makers fret and debate as to how to solve our nation’s nine percent unemployment rate, a much broader problem is standing in the way of our country’s advancement and ability to compete, innovate and grow – the underemployment rate of nearly 25%! Almost one-fourth of our nation’s workers are under-challenged, under-appreciated, under-motivated and under-paid, not exactly creating ideal workplace conditions and culture inside companies across America. Leaders and board members need to be acutely aware of this disturbing trend and develop strategies and systems to empower their teams.
Last week, yet another sobering report was released about the state of employee engagement around the globe for the first two quarters of 2011. A study by Mercer of nearly 30,000 workers in 17 countries, including 2400 US workers, indicates that one out of every two employees is either planning to leave his or her organization or is “mentally missing in action” on the job. The report mirrors last year’s Gallup Study demonstrating that a whopping 71% of America’s employees are either disengaged or actively disengaged at work. And if that’s not disturbing enough, the economic impact of the “actively disengaged” worker segment alone- those with one foot out the door, who are also poisoning the well along the way- costs America $350 billion per year in lost productivity. Add to this the numerous studies that relate worker disengagement to a markedly increased frequency of physical and emotional illness-from stress related diseases to depression- and the significant impact on company healthcare costs is evident. Happiness at work is not a “soft” issue; it has implications both inside and outside of the organization.
If you’re a leader in any organization, we hope you’re taking note. More importantly, we hope that you’ll accept accountability for the conditions that have led to a massive disengagement of the nation’s workforce, because the lack of engagement among American workers is not only affecting your business, it’s impacting the growth and quality of our economy. Every disengaged employee is a symbol of untapped potential that could contribute to the country’s productivity. Engaged workers deliver more to the organization, they work beyond the requirements of the job and demonstrate the level of discretionary effort that our economy so sorely needs. So, we’ve got more than a jobs dearth issue in this nation—we have a staggering Human Potential Gap in existing jobs that must be addressed in order to get the American economy back on its feet.
If you want to build engagement in your organization, begin by building a culture that ignites the passions of your people. Recent data from an international study of employee purpose and passion proves that one of the most essential factors for igniting the energy, motivation and engagement that drives our economy is capturing the human spirit. The research conducted by Purpose Linked Consulting with nearly 1300 professionals, managers and leaders, identified a direct connection between employees’ motivation and their sense of personal fulfillment at work in over 80% of respondents. Even more respondents (86.3%) correlated fulfillment with their ability to “translate my purpose in life to tangible work contributions.” Employees are offering the much-needed elixir for productivity and economic recovery by telling leaders, in essence, “If you want the best from me, give me work that aligns with my purpose and passions.”
Beyond alignment of passions with roles, leaders must understand how to lead in a knowledge economy. This new economy has created a paradigm shift in organizational effectiveness — a fact that has escaped the notice of companies still operating with antiquated models of leadership and employee engagement. These models view the establishment of robust operational systems as the primary (and sometimes only) foundation for business success. These are systems underpinned by effective strategies, a strong network of internal communication, and a keen focus on efficiency and execution to produce reliable results. On paper, it sounds great. In action, it often overlooks critical elements of organizational effectiveness that have become even more essential in today’s market, where “innovate or die” has become the mantra.
What are the characteristics of leaders who build effective organizations that generate groundbreaking ideas? These are the leaders that focus on people, not just systems. More importantly, they work to understand both the rational side and the emotional composition of individuals, and nurture culture and purpose as vigorously as they craft strategy. Effective knowledge economy leaders engage in conversation with employees rather than one-way communications and favor relationships over processes. These savvy leaders focus on igniting energy, innovation and creativity as much as harnessing efficiencies, executing business plans and delivering predictable results. In short, they measure, reward and support those who brave the chaotic, risk laden, often-tortuous path to sustainability and success.
In this new economy, organizational growth and innovation will not progress linearly. They will grow through a culture of creative chaos, where people, purpose and passions are the catalysts of breakthrough thinking—the kind that can’t easily be “systemized” into being. So, leadership in the new economy must support this essential creative tension while at the same time adopting models of governance that can uphold a culture of innovation.
As I will discuss in future contribution, governance is about understanding your role as a fiduciary to the stakeholders of the company, which includes all of your workforce. Governance is about truly being a steward to protect the key assets of the company, which includes your human capital. When those assets are under-performing at a rate of 25% or higher, strategies must be adopted immediately to bring passion back into the workplace. And with passion, innovation, productivity and profitability will soon follow.
ABOUT THE AUTHORS
Andrew J. Sherman is a Partner in the Washington, D.C. office of Jones Day, with over 2,400 attorneys worldwide. Mr. Sherman is a recognized international authority on the legal and strategic issues affecting small and growing companies. Mr. Sherman is an Adjunct Professor in the Masters of Business Administration (MBA) program at the University of Maryland and Georgetown University where he has taught courses on business growth, capital formation and entrepreneurship for over twenty (23) years. Mr. Sherman is the author of seventeen (21) books on the legal and strategic aspects of business growth and capital formation. His eighteenth (18th) book, Road Rules Be the Truck. Not the Squirrel is an inspirational book which was published in the Fall of 2008. Mr. Sherman can be reached at 202-879-3686 or e-mail email@example.com.
Alaina Love is a nationally recognized leadership expert and speaker, and the president of Purpose Linked Consulting. She is co-author of The Purpose Linked Organization: How Passionate Leaders Inspire Winning Teams and Great Results (McGraw-Hill, 2009) a book that identifies and explores the power of aligning individual employee passions with work roles to increase productivity and fulfillment. Ms Love is a frequent contributor to Bloomberg Businessweek.com and is a leadership panelist for WashingtonPost.com.
She can be reached at 540 631-0215 or via e-mail firstname.lastname@example.org.
Finally! Something that makes sense about boosting our economy. Would somebody please tell the politicians, DOL, and President Obama? Government support for engagement can begin with the federal workforce.
Great article. Thanks for writing this so clearly for both the underemployed worker and the leaders who can make a difference within their own companies by doing what I call “remembering the ‘H’ in HR” (remembering the “human” in “human resources”).
Insightful article that points out not only are we losing jobs with devastating financial and emotional consequences, but also squandering precious human resources when people are working at jobs for which they have no passion, purpose, or connection.