Importance of Team Building

The goal of this week's blog is to get you thinking about your decision-making style and, more importantly, what that style means to your workplace culture and workforce effectiveness.  Said another way, how is your decision making style impacting your organization's results? 

As a leader, have you ever thought about the number and types of decisions you make every day?  Have you considered how you make those decisions?  What about the implications of your decision-making style on employee engagement, team building, and open communication in the workplace? 

Most of us probably remember this from Management 101: The most commonly used styles are Autocratic, Democratic, Participative, and Consensus.

"I'll make the decision and you go get it done."  "No, I don't need any input; I know everything I need to know to make the right decision."  "I'll handle it; I always do and it turns out fine."  To be fair, the autocratic style is appropriate when a fast decision is required.  Otherwise, this approach ignores the importance of engaging employees and the possibility that "two heads are better than one."  It also has a dampening effect on building trust.  Do you think overusing this style might affect your business results? 

"Let's vote on it; the majority rules."  "I know we are doing it, but I didn't vote for it."  This democratic style has some advantages including building trust in the workplace and supporting open communication.  But who really "owns" the outcome?  It is easy for employees to claim, "I didn't support that" or "I thought he was doing it because he voted for it."  That reaction to the democratic style eats away at a culture of ownership and hinders your effectiveness.  Do you think overusing this style might affect your business results? 

What decision-making style do you use and how is it affecting your bottom line?

Here's an interesting piece of employee engagement research: I just compared the three-year revenue growth of applicants to Winning Workplaces' Top Small Company Workplaces award over the last two years, whose founder is still active in the business, to applicants whose founder is no longer active.

Here's a table showing my findings:

As you can see, our 2010 applicants that have active founders experienced 20% greater revenue growth over three years than those without active founders.  Likewise, our 2009 applicants with active founders experienced 15% greater revenue growth than their counterparts without them.

Note: While Winning Workplaces has run the Top Small Company Workplaces award project since 2007, I didn't include our 2007 and 2008 award applicants in this sample because in both of those years, the question in our application "Is your founder still active?" was not required.  Therefore, we don't have enough comparative data on them.

What should we make of this?  Here are my takeaways:

1. This reinforces the notion that company founders tend to assemble like-minded workforces.
2. On the flip side, job candidates ideally want to join firms whose values reflect theirs.
3. Once they're hired, employees take their workplace team building cues from the founder.
4. And this is why succession planning is so difficult, and should be given as much lead time as possible to implement effectively.

Bonus: Here's a post-succession tip to keep employees engaged (although it may not be for every company): Invite a non-active founder to attend your next all-employee gathering.  The informal conversations can lead to actionable, innovative ideas.

Kudos to Garry Kranz at Workforce Management for citing employee engagement research in making the case that business leaders should satisfy workers by giving them feedback, even it it's negative.

As Kranz writes, the temptation to focus only on the positive in performance evaluations is strong.  It's likely a lot stronger now because the economy has forced many leaders to cut staff, as well as hours and/or pay for employees who remain.  This has resulted in fewer than half of them now being satisfied with their jobs – which makes them a lot more inclined to leave given the opportunity, even in a down economy.

Thus, we see more positive performance reviews than might be justified in more stable times.

But the takeaway from Kranz's article is that employees don't want their feedback sugarcoated; they crave honesty from their managers and leaders.  In other words, they want what you should be using as a building block to create (or sustain) a productive workplace anyway: Trust, Respect & Fairness.

The bottom line is that, even in a worst case scenario where the feedback of your employee survey is overwhelmingly negative, as I wrote last month, there's value in even this outcome because you will know the areas of your workplace culture that must be improved.  Once you're at this stage, you can turn to us for expert advice on specific people practices to move forward, over the ideal timeframe – in other words, an action plan.

Related: If fear cripples leaders and managers, it can be really destructive for the rest of your workforce.  This Ask An Expert column provides practical tips on removing fear as a barrier to productivity.

Image credit: Photobucket/freakyjohn101

As I did yesterday, I turn once again to SmartBrief on Leadership, which now points to an article on Jack Welch in the San Francisco Chronicle as a "must-read."

In summarizing the Chronicle piece, SmartBrief pulls out Marc Davis' statement, "[F]or any business -- gigantic, medium-sized, modest, or small -- the management philosophy of Jack Welch may be applied equally."

Really?

While four of the five Welch management strategies Davis covers are good, and can be applied in any size business, I would disagree that his #2 ("Lead a company, don't over-manage it") is just as effective in a small setting as in a large one.

Winning workplaces has long said, based on our own employee engagement research and other workforce effectiveness studies, that small and midsized businesses' "secret sauce" are managers and even CEOs who lead and manage, taking every opportunity to boost employee leadership development.  While time intensive and impactful on the budget, the payoffs of this approach are many, almost always outweighing the investment:

• Greater commitment and engagement
• Lower absenteeism and presenteeism
• More innovation
• Longer employee tenures
• Lower turnover (and lower recruiting costs)
• Higher customer satisfaction, mainly due to customers dealing with the same employees for longer periods

Need more proof that Jack Welch might not be the best management model for small businesses?  Click below to read our take on his arguments that...

• The bottom 10% of employees should be cut each year
• There's no such thing as work-life balance

Care to push back?  Please do so by leaving a comment below.

I have written several times making the connection between workplace harassment, usually the result of toxic managers, and high employee stress levels that undermine productivity, at both organizational and macroeconomic levels.

Naturally, the question from a business leader who cares about fostering a productive workplace culture is, What do I do about it?

Beverly Peterson has got you covered.  She runs a website you should really check out called NoJobIsWorthThis.com.  Peterson explained why she created the site and what it offers in an email to us:

My online documentary is offered free to the public ... and features several videos about abusive bosses and has tons of resources for victims, HR Reps interested in creating policy, etc.  I survived a vicious boss who played havoc with my career, health, and forced me to leave my job so the Blog section even includes a playlist of music to help you through the tough days.  That's also why I wanted this project to be available online for all to use.

Peterson, whose documentaries have appeared on HBO, PBS, and The Sundance Channel, does the best job I've seen of putting faces behind this issue – which is easy to wrap your head around on paper, looking at the employee engagement research, but very difficult to tackle in the real world.

What policies or practices do you have in place in your organization to prevent workplace bullying?

Undercover Boss, the CBS TV show that's grown in notoriety since I blogged about it last month, shortly after it debuted, is the topic of a new reader poll on SmartBrief on Leadership.

SmartBrief asked the business leaders in its audience if they'd want to be on Undercover Boss.  The vast majority of respondents (59%) answered yes, they'd want to see what's really going on in their workplace.

Now, according to SmartBrief's media kit, 72% of their over 1 million email subcribers are from companies with 1,000 or more employees (45% are from firms with 10,000 to 50,000+ employees).  This begs the question, are leaders of small organizations – say, under 1,000 employees – inherently more "on the pulse" of their workplace culture, and therefore don't need to use the show as a platform to learn about it?

Because of their small size, which allows the CEO and the leadership team to really engage employees and understand both their personal issues and their professional needs and desires – not to mention reduced or nonexistent hierarchies that are linked to smallness – I would have to say yes.

I think if SmartBrief's poll were limited to respondents in organizations with fewer than 1,000 employees (such as our Top Small Company Workplace award applicants), the most prevalent answer would be different.  Maybe it would be "Other," since I didn't see an answer choice of "No, I already know what's going on."

Related: Learn about employee engagement best practices used in successful small firms in our editorial Small But Great.

There are so many areas of business where industry can be a barrier to entry: access to credit or a loan, recruiting, partnerships.  Yet, industry is NOT a limiting factor when it comes to implementing progressive people practices that drive a productive workplace.

In other words, no leader of a company, small or large, should ever answer the question "How well do you engage employees?" with "Our industry isn't conducive to that."

For proof, check out the 17 distinct industries in which our 40 Top Small Company Workplace award finalists for 2010 are operating:

1. Advertising
2. Architecture/design
3. Business-to-business trade
4. Chemicals/pharmaceuticals/biotechnology
5. Computer systems and related services
6. Construction/Engineering
7. Consulting
8. Employment services
9. Health and wellness services
10. Industrial Goods Manufacturing
11. Internet services/data processing and other information services
12. Natural Resources
13. Personal services
14. PR/Marketing
15. Retail Trade
16. Software
17. Travel/hospitality

The bottom line?  Chemicals is about as different from Travel as industries come, but even seemingly disparate firms are united by the common bond of stellar human capital strategies.  And guess what?  These strategies create another bond: steady sales growth and a clear path to achieving or maintaining profitability.

For more on our 2010 small biz award finalists, check out these posts:

• Patagonia Making a Triple Bottom Line Focus More Public
• How Our 2010 Small Biz Award Finalists Beat the Competition
• Map - The 2010 Top Small Company Workplace Award Finalists

Did you see Adam Bryant's interview with Container Store CEO Kip Tindell in Friday's New York Times?  Early on Bryant asked Tindell about his most important leadership lessons to create a thriving and productive workplace culture.  Here's what Tindell said:

The way we create a place where people do want to come to work is primarily through two key points.  One of our foundation principles is that leadership and communication are the same thing.  Communication is leadership.  So we believe in just relentlessly trying to communicate everything to every single employee at all times, and we’re very open.  We share everything.  We believe in complete transparency.  There’s never a reason, we believe, to keep the information from an employee, except for individual salaries.

There's a lot to absorb in the leader's answer when it comes to communications team building.  But it boils down to creating a culture of ownership and accountability that is based on mutual trust – workers' trust in the leadership to engage them and provide a nice place to work, and leaders' and managers' trust that a payoff of employee engagement is increased commitment, including offering more ideas to improve processes and ultimately customer satisfaction (and sales).

It is this foundation of trust that has allowed the Container Store to reach true midsize status, with over 4,000 employees, while expanding from 38 locations when I blogged about them in 2007 to 48 today (yes, during this recession).

Related: One of our most popular posts is this one that's also about transparency.

Winning Workplaces feels almost like a parent when it comes to Seventh Generation, the company of our Best Boss Jeffrey Hollender.

Hollender's environmentally responsible household products business had annual sales of less than $50 million when we honored him in 2006, at a time when SG's progressive people practices were not widely known; by June 2009, when he named his successor as CEO, that figure had grown to more than $1 billion.  SG recently started airing national TV spots, showing that they're definitely here to stay.

And that's a good thing when it comes to not only green consumerism but sustainable business practices.  Hollender has waxed on the latter topic for some time on his Inspired Protagonist blog.  Now's he's bringing his leading-edge thoughts to the masses through his new book The Responsibility Revolution: How the Next Generation of Businesses Will Win.

I just received an advance copy of the book and am looking forward to digging into it.  You can read the first chapter of it for FREE by visiting Hollender's website.

Related: The forward in The Responsibility Revolution is by Peter Senge, a highly respected author in the area of how to improve employee engagement and workplace team building.  We referenced Senge in the Executive Summary of our 2007 Top Small Workplaces Data Report – see page 5 of this pdf.

What is it about spring and a focus on women entrepreneurship?  Don't get me wrong, I'm not complaining – I think discussing business leadership by the gender that is most dominant in our country, most employed as adults, and, according to BusinessWeek, does more with less venture capital is a good thing.

Last April I blogged about the "flurry of press on the topic of women in business," and a similar flurry seems to be going on now.  In addition to the BusinessWeek article I mentioned above, this has been a hot topic of Reuters, USA Today, and even the U.S. State Department.

Among this press is a call by In Good Company Workplaces – a workspace, networking, and training provider led by two women – for female entrepreneurs to share their workplace culture stories and tips.  Adelaide Lancaster and Amy Abrams are gathering this feedback for a new book they're working on.

In Good Company has gathered a few comments so far on their blog.  You can add yours by clicking here.

It will be interesting to read their book when it's out and hopefully see more real-world evidence of the payoff of employee engagement.

Related: This report by The Center for Women's Leadership, archived on our website, finds that entrepreneurial activity is highest among women who are also employed in a wage job.

We've had our short survey on the increasingly popular "Move Your Money" movement up for almost a month.  But as of this Friday, we need to close it so we can write our April IDEAS newsletter article on the results (subscribe to IDEAS here; it's free).

If you haven't taken the survey yet, please do so today:

Take the survey

As a thank-you for your participation, check out this new post on the Small Business CEO blog on what to look for when searching for a new bank to suit your business needs.  Note that in a highly transparent workplace culture, employee engagement can help you make your final decision.

If you have any comments on Move Your Money you'd like to share with your fellow readers, please do so below.

This week, once again, my e-mail inbox contained the disappointing results of a Gallup study that indicated that the Work Environment Index dropped to a new low in February. 

The Work Environment Index measures job satisfaction, the ability to use one's strengths at work, trust, and openness in the workplace, and how one's supervisor treats him or her.  The Work Environment score was 51.6 in February 2008; 48.7 in February 2009; and is now at 48.0 in February 2010. 

Why are these results so concerning?  Among other things, these scores say two things:

1. Quality of life is negatively impacted, and
2. Workforce effectiveness and workplace productivity aren't nearly where they could be. 

As a leader, do you want to make sure that these numbers don't apply to you?  Do you want a productive workplace with highly engaged employees and a culture of ownership?  If so, consider these actions: 

1. Take a hard look at your organization's culture.  What's the level of employee engagement?  Do your managers know how to manage and lead?  Do you sense a positive energetic organization or one that reflects fear and/or boredom? 
2. If you think there is an opportunity for improvement, get serious about it.  Start with doing an employee survey to better understand where you are doing things right and where you could improve.  If you are going to be serious about improving your workplace culture, don't guess.  Get the facts – directly from your team.
3. Once you have the facts, do something about them.  This is where the work gets hard.  Changing a culture, which means changing the way people behave, isn't easy.  Get outside help if you have to.  Be clear about your "end goal"; if you do this work successfully, what will your workplace culture look like in a couple years?  Develop a plan to get from where you are today to your end goal.  What are the key steps?  How will you measure your success?  How will you engage employees along the way?  How will you build trust, a foundational component of a great workplace? 

The workplace studies are yielding consistent results: there is a growing problem with job satisfaction and, in turn, productivity.  As a leader, do you want to be part of the solution or part of the problem?

If you were among the over 41 million people who watched the 82nd Academy Awards telecast last Sunday, you might have seen one of our 2010 Top Small Company Workplaces award finalists: outdoor clothing designer/distributor/retailer Patagonia.

During the program American Express ran an ad for their Members Project, a new partnership with social action network Takepart.com.  Here's the commercial if you missed it:

The ad features Patagonia founder Yvon Chouinard, who according to their application for our award – and the company's own press materials – is still actively involved in the business he established almost 40 years ago.

This post on Patagonia's employee and customer blog explains the set piece in the ad, the Matilija Dam, and why removing it would be good for the planet and people (which, along with profit, make up the three pillars of the growing triple bottom line business movement).

Patagonia's work maintaining a strong triple bottom line is readily apparent.  On their website homepage, a vast Environmentalism section is given equal weight to revenue-friendlier sections such as Clothing & Gear and Product Information.

This perfect weave (pardon the pun) of company mission and like-minded employees and customers has kept business strong, even in a down economy.  I can't get into specifics, because our Top Small Company Workplaces media partner Inc. Magazine will share those with you in its June issue should Patagonia be named a winner for 2010.  But trust me that they're doing very well on the key business metrics you're concerned about in your own organization.

Watch for the June issue of Inc. on newsstands to read about this year's winning firms and their workplace culture improvement and team engagement activities, which you can adapt for your company.  You can also subscribe to Inc. and get the issue as soon as it comes out.

Close to 1 in 5 readers of this blog is from California – a greater share than from our home state of Illinois.  And of those, most hail from where I've called home since last July: SoCal.

I speak now to you folks – and others if you want to fly or drive in: You can connect with me on March 23 by registering for this LA Chamber event on green entrepreneurship.  "Going Green for California," part of Occidental Petroleum's Power Hour Series, features Huell Howser, host of California's Gold on PBS.

According to the LA Chamber, this session will highlight "what innovative and creative Californians are doing to solve environmental challenges."  The registration fee is only $20.  Learn more and register to attend here.

If you can make it, I look forward to seeing you there.  I'll have business cards in hand – though not too many for environmental reasons – and I'd love to hear about what you do and answer any questions you may have about our work to equip small organizations with proven people practices.

Related: This week Taiga Company (a fellow user of our bloging platform, Compendium) shared 6 reasons why going green is a payoff of employee engagement, and makes for a more winning workplace.

Photo credit: Huell Howser Productions

[I]f the current recession turns out to be very long and deep and a business finds it must take further action, the fact that sharing the pain was tried first makes the next steps more palatable for all stakeholders involved, especially employees.  For one thing, those who stay after one or more round of layoffs will be better equipped to mitigate the dreaded "survivor syndrome."

Our Founder and Chairman, Ken Lehman, gave this advice a little over a year ago in a Winning Workplaces editorial titled "Share the Pain."  Since then I've blogged when I've found others concerned with how to improve employee engagement endorse this same strategy.

Last week a major player, Fortune magazine, came out in support of sharing the pain – specifically, going above and beyond to provide the softest landing possible for those you've laid off.

In their article HR outsourcing provider CEO Burton Goldfield recounts how one of his clients invested only $5,000 for two, half-day-long workshops for a good portion of his workforce that he was forced to let go within the last 14 months.  The ROI on that money would seem to be well above 100%:

• 10 (60%) of the 17 participating employees had found new jobs just a few weeks after attending the company-sponsored workshops – helping to, as Goldfield says, "put food on the table for those who once slaved on your payroll."  This reflects our view that Winning Workplaces are better for employees and the greater society.
• This practice was also better for the business: Goldfield says his client told him that many of the remaining employees told the CFO how impressed they were that a company that small would take a step like that.  Guess what?  That's going to make it much more likely that they won't bail – even if the economy takes a bigger dip and more team sacrifices need to be made.  This means the CEO's investment of $5,000 can be worth many multiples in terms of the costs saved if they needed to recruit to replace less committed workers who would leave.  (The cost to replace an employee has been found to range from 50% to 150% of his/her salary.)

Have you needed to engage employees in sharing the pain in your firm during this recession?  If so, how did it help them and your business?

Time is money, and in a down economy you might as well double whatever you think your – and especially your stakeholders' – time is worth.

So I really appreciated freelance copywriter Denise McGill's 5 time-saving tips for small business owners that appear on Small Biz Survival.  These run the gamut from things you're likely already doing if you place a premium on communications team building (put your full contact info in all email signatures – automate this and you're done), to less-used but no less powerful tactics like deleting or archiving outdated electronic materials on your computer.

In the spirit of saving you time, I'll keep this post short and conclude by sharing two more related tips:

1. File under startups, legal considerations: employees = payroll service (thanks to Paula at Workplace Fairness).
2. File under work/life balance: outsource your more tedious household responsibilities.

Do you engage employees in discussions of saving everyone time and, thus, your company money?

Our tagline at Winning Workplaces is "better for people, better for business."  Lately we've taken to tacking on "better for society" to this, reflecting the focus of some of the double and even triple bottom line businesses we've honored over the years for their demonstration of the payoff of employee engagement practices.

A new blog post by small business new marketing guru Chris Brogan re-reminded me of this focus, in a small but powerful way.  In outlining his expectations for himself and his readers he might meet at the 2010 South By Southwest festival that starts tomorrow, Brogan made his case for limiting the distribution of business cards:

Unless you want to do business with me, don’t give me a business card.  We both know how to reach each other, so unless one of us asks for one, let’s not hand them out.  ...

Save a card.  Save the planet.  Rewire the way humans do business.

I think this is a great tip for individuals, and applied en masse it has the potential to help all three stakeholders I mentioned above:

• Employees – less materials to worry about in sales presentations, networking events, etc.  (As an aside, you can use technology – smart phones, laptops, PDAs – to store a contact's info if you really want it and are sans biz cards.)
• Businesses – printing fewer cards because employees hand out less of them can slim down your marketing budget.  On a larger scale, more money to play with can spur more effective strategy work to meet customer demands, which can mean more (wait for it) jobs!
• Society – fewer demands on printers means more trees!  And that's good for everyone because they absorb more of the CO2 caused by global warming and produce more oxygen.

My question for you: How do you engage employees to innovate how you communicate with customers and other stakeholders to cut costs while still achieving your goals?

Photo credit: ChrisBrogan.com

Yesterday after the Associated Press reported on the results of a San Diego State University study finding that Generation Y (or Millennials) highly value compensation and vacation time, some in the blogosphere asked if, especially in this economic environment, Gen Y needs a wake-up call.

I don't think so – and I'm not saying that because I'm a card-carrying Millennial.  As someone interested in progressive people practices for a more productive workplace, I look at these two sticking points as the carrot at the end of a very lucrative stick for businesses.

Here are my top 5 reasons why I think Gen Y is entitled to its job wants:

1. It's now the most dominant generation in the workforce.  When you rise to that position and make decisions that benefit companies in both front-line and managerial roles, you get to call the shots when it comes to "skin in the game."
2. As Donna Fenn reports from a number of sources in her book Upstarts!, not only are record numbers of Millennials enrolling in entrepreneurship/MBA programs, but a greater share of those students than ever before are coming in with a business already in tow.  IMO, if these young people invest the ridiculous amount of time it takes to create and nurture a thriving business – and help our economy in the process through taxes and job creation – they deserve these two rewards.
3. As Penelope Trunk pointed out in a blog post I cited last year, Gen Y more readily embraces a proven leadership approach known as "fast failure."  Since our employee engagement research shows this can greatly improve innovation and thus productivity and customer satisfaction, again, I think Millennials deserve some just rewards for significantly scaling up a company's revenue and giving them a greater shot at achieving or maintaining profitability.
4. As organizational development guru David Lee argued on ERE.net last month, Gen Y doesn't beat around the bush on satisfaction – if they're not, you won't see them because they'll have left.  The cost-effective flip side of this for businesses is that they're much less likely than other generations to be "what the Gallup Organization calls ROAD Warriors — Retired on Active Duty."
5. Finally, as The CEO of YOU author Marsha Petrie Sue wrote in the California Chronicle, "Gen Y won't retire – they will reinvent."  Aren't greater pay and more time off fair tradeoffs for more productive ideas coming back from breaks and a longer work life spent helping companies improve their sales and bottom line?

Do you agree or disagree with my assessment?  Why?

Yesterday I blogged about our announcement of our finalist organizations for the 2010 Top Small Company Workplace award, showing where these businesses are located across the U.S.

You may be wondering, OK, so what made these 40 firms stand out among the almost 500 that applied?

Our finalists stand out when it comes to their use of effective, progressive employee engagement best practices to drive improved business outcomes.

The two tables below spell this out in detail.  Here are some key best practices/benefits where the finalists stood head and shoulders above all applicants, on average...

...which helped them produce the following outcomes:

Metric/Outcome	2010 TSCW Applicants	2010 TSCW Finalists	Finalist Improvement
Percent profitable in 2009	91%	95%	4%
Average years in business	16 years	28 years	75%
Average employee turnover	19%	8%	138%
Average % open positions filled from within in 2009	22%	28%	27%
Average employee tenure	4 years	7 years	75%

So, yet another employee engagement research sample that shows the payoff of winning workplace engagement strategies.

Help a blogger out: Have you seen any new workplace research showing that better people practices bring better business results?  Let me know by commenting below.

Today Winning Workplaces announces the 40 finalists for our 2010 Top Small Company Workplace award, in partnership with Inc. Magazine.

We started our search in November 2009 for small and midsized organizations (750 or fewer employees) that engage employees and create a great workplace culture and, in turn, deliver improved business results.  Almost 500 firms completed our online application by the deadline in late January.

Our staff then pared these down to the 40 finalists that appear in the interactive map below.  Click on a marker to access a finalist's website, as well as to see when they were founded and their size and industry:

The next steps in the 2010 selection process include:

• Later this month our final panel of judges will choose this year's winners.
• These winners will be announced in the June 2010 issue of Inc. Magazine.
• The winners will be honored at Inc.'s conference in Denver on Oct. 27-29 (more info on this event coming soon).

If you know anyone interested in human capital strategies for a more productive workplace, I encourage you to share this post with them by using the button below.  Thanks!