Written by
Changeboard Team

Published
05 Feb 2014

Planting seeds for sustainable business

05 Feb 2014 • by Changeboard Team

Engaging people

“It’s no longer about managing people, it’s about engaging them. Individuals join organisations but leave managers.” This is the view of David MacLeod, co-chair of the Employee Engagement Task Force, presenting with Nita Clarke to delegates at the CIPD annual conference on 6-7 November 2012. He says: ‘’We promote managers because they were good at their last job but we don’t train them in people skills.” MacLeod believes the role of managers is to break down silos, listen and create a culture where people can express their views. “When you walk into another business environment, you can immediately tell whether people are aligned and engaged within the organisation,” he says. “When they are, there’s a real buzz around the place, people are enthusiastic. They find the opportunities in the market to innovate, they give great customer service and they find ways to do things more cheaply.”

Employee voice

According to MacLeod, your business isn’t just a network of transactions – it’s also a social network. The capability of your people determines the success of your organisation, while an open ‘employee voice’ keeps the business on track. If there is distrust in the leaders, you question everything and this slows down the organisation. “Engagement is not soft and fluffy,” he says. “If we see engagement as another activity to do on a Friday, we’re missing the point. It’s about how we do what we do.” He argues that the worst two words in the management lexicon are ‘human resources’. “I’m not a human resource; I am an individual,” states MacLeod.

“If you treat me as human capital, you’re going to create a small relationship with me. If you treat me as a human being, you will get more of my capability and potential. If there is a clear story about where we are going, I am well managed, my voice counts and there is trust, then I am more likely to be engaged.” Chris Roebuck, visiting professor of transformational leadership at Cass Business School, London, concurs with MacLeod. In many organisations where corporate scandals have occurred, such as BP, Exxon and Enron, Roebuck argues the employees who were the causes of the catastrophes took no notice of risk, legal, reputation or regulation implications. Taking a risk too far, it seems, was deemed acceptable behaviour in those cultures.

“Somebody knows, somewhere within an organisation, that someone is doing something wrong. Every business needs a moral compass,” says Roebuck. He points the finger firmly toward the leaders of the business, and says that now is the time for HR to seize this opportunity to guide its leaders and its people by driving organisational performance. Meanwhile, economist and author Will Hutton warns of a ‘guerrilla movement’. Speaking exclusively to Changeboard at the ‘Good Day at Work Wellbeing Professionals’ annual conference on 1 November 2012 (hosted by Robertson Cooper), he says: “The game’s up. People will break out and set up against the dinosaurs.” The prehistoric creatures Hutton refers to are business leaders who abuse their positions of power at the expense of their people. “Some organisations think they’re doing well,” he adds, “but decay starts at the bottom.” He refers to the terms ‘relationship capitalism’ and ‘business purpose’, claiming that you can’t have capitalism without business purpose.

Built to last whats your legacy?

In the view of Peter Cheese, chief executive of the CIPD, employees, consumers and customers are questioning those at the top of the chain who, during an economic boom, have lost sight of the purpose of their business. Now is the time to address the issue of business culture and trust. He explains: “In Western society we have come to value money and the pursuit of riches as defining our status. Material wealth has become the measure by which we define success. Leaders now have to think differently.
There’s a societal shift in values toward the spiritual, emotional, collective and community. “It’s easy to point the finger at the stock market and blame it for the collapse of the economic system, but there are broader things at play,” he says. “If you consider that CEOs average three years in an organisation, leaders playing for short-term quick wins can no longer take the cream and leave the dregs behind. Instead, leaders need to start thinking about legacy and include it as part of their own corporate governance.”

So, chief executives and boards should be asking themselves: ‘What’s the corporate social purpose of this business?’, ‘what’s my legacy to this business?’ and ‘how can I create legacy that’s built to last?’ “Undoubtedly it takes a courageous business leader who is prepared to play for the long term where results won’t be delivered in the next year but in three to five years’ time,” he suggests.

Cultural groundswell insight-driven HR

If you want to change culture, you need to start at the top. Long-term sustainable performance is built on the bedrock of culture and values. “Culture isn’t part of the game, it is the game,” says Cheese. “It’s how you execute strategy. Values are critical to the way in which we should be defining culture, understanding it and measuring it, for example by recruiting people on attitude not just skill.”

Cheese asks if, as an HR leader, you can articulate your values. If you can’t, how can anyone else? If you were to survey your people, would they know the values? How are management exemplifying them? He points out that HR needs to have its finger on the pulse of the business and to challenge where necessary. This takes courage, bravery and awareness.

“Treat values as seriously as the holy financial grail,” says Cheese. “Embed your values by holding leaders and managers accountable. Provide them with soft skills training and measure them. It’s not just about them hitting targets, but how they treat their teams. Provide continuous recognition of good behaviour. These send the strongest signals of reinforcing culture, behaviour and values.”

Cheese raises the question: If one of your biggest rainmakers was bringing in all the profit but was a bully to others, what would you do? “You have to ask yourself if they are living the values of the company,” he says. “When, as a manager, you finally say this person must go, you’re going to take a short-term drop in revenue. But, my goodness, will it inspire and empower others to become high performing. That one person could have been holding back so many others. It’s about people respecting one another and being the greatest sum of the whole part. That’s what you call long-term business success,” concludes Cheese.

World class HR

So what can HR do to make organisations more responsible and effective? According to Chris Roebuck, the role of the HR function can be extremely powerful but HR as a profession needs to go to the next stage. He feels HR has to maximise its effort on helping the organisation become ‘world class’.

“The mistake business leaders often make is maximising effort on doing the wrong thing,” says Roebuck. “Typically in large corporations, as critical deliverables from the board are fed down through the organisation, communication becomes vague. If you don’t explicitly tell line managers what they should be doing, they make it up as they go along.”

Roebuck advises HR to work closely with the board, find out what the strategic objectives are and translate these into language so line managers understand how they contribute to the bigger picture. He also suggests that HR should create toolkits that provide line manager support by making it clear what needs to be achieved operationally. Alongside this, line managers need to ensure every employee has development plans. He believes line mangers have moved away from the development of people, particularly on the job, with the rise of the HR function taking over those responsibilities so line mangers don’t see it as part of their role. “HR must have absolute clarity about who does what in relation
to the development and performance of people, but you don’t need a complicated strategy,” he explains.

He asks you to think about the best boss or manager you’ve ever had, and write down all the things you most admire and respect about them and what they did for you. “Looking at your list, which of these relate to task?” says Roebuck. “Every time I ask my MBA students or a group of leaders this question, ‘task’ makes up 10% of the collective answers, but on average 80% are based on relationship.” For example, a task-based answer would be: ‘they set me realistic but challenging targets’, while relationship-based
responses would be: ‘they listened to my ideas and what I said’, ‘backed me up when required’ and ‘didn’t blame me for making genuine mistakes’.

“It suddenly dawns on everyone in the room that it’s the relationship between an employee and their manager/boss that makes the difference between being average and high performing. HR must make it the responsibility of every line manager to help develop their people within the organisation – every single day. “Not only will this be much more engaging for all employees but it will make the difference between being just a good organisation and being a great one.”

Will Hutton

Will HuttonWill Hutton, principal, Hertford College, Oxford

Will is also the chair of the Big Innovation Centre at The Work Foundation – the most influential voice on work, employment and organisation issues in the UK. Regularly called on to advise senior political and business figures and comment in the national and international media, he is one of the pre-eminent economics commentators in the country today.

David MacLeod

David MacLeodDavid MacLeod, chair, Employee Engagement Task Force

David is a visiting professor of the Cass Business School and a fellow of the Ashridge Business School. He is chair of the government sponsored, employer led Task Force on Employee Engagement launched by the Prime Minister at Number 10 in March 2011 and co-author of the MacLeod Report to government called ‘Engaging for Success’.

Chris Roebuck

Chris RoebuckChris Roebuck, visiting professor of transformational leadership at Cass Business School, London

Chris is visiting professor of Transformational Leadership, Cass Business School, London. Chris has held senior roles in UBS, HSBC, KPMG & London Underground and has served in the British Army. He currently advises organisations, runs masterclasses and speaks around the world on HR and leadership.