Culture and engagement has been identified as the most important overall issue for more than 3,300 global leaders. This is a first for the Deloitte “Global Human Capital Trends 2015” report, which surveyed more than 3,300 business and human resource leaders from 106 countries.

Leadership, historically, has been the number one issue in this report.

So why the shift to culture and engagement? The full report, which can be found online states that:

  • Only 31% of employees are engaged at work
  • 51% are disengaged
  • 7.5% are actively disengaged

The Gallup findings are highly revealing considering that most leaders recognize how important employee engagement is to their organizations’ productivity and effectiveness.

Why are the employee engagement numbers so low?

The obvious conclusion; management is not effectively doing its job. Sadly, this is not a new revelation. Many perceptive leaders recognized this lack of organizational engagement and have been trying to improve it for years.

However, it wasn’t until recently that many leaders began to realize that they were looking for a simplistic solution to a complex issue. Traditionally, it was believed that a charismatic leader could create a friendly place to work, which is why Deloitte’s annual survey historically has identified “leadership” as the top business challenge.

Organizations who were hiring friendly leaders to develop an engaged workforce soon discovered that their searches usually ended in failure. This was especially true for the charismatic leader who had developed an engaged organization and was looking to turn it over to the next charismatic leader.

While many organizational assets can be transferred from one employee or department to another, leadership from the top is different. Trust is built over time between leaders and staff. That trust is a precious commodity that cannot simply be passed down from one leader to another. It takes time—from weeks to years—for new leaders to demonstrate their values and gain the values of everyone in the organization. Each new leader must prove that he or her has the “right stuff” and deserves the trust of staff.

In hindsight the reason for these failures is obvious: engagement is not about fun. It’s about creating a culture that offers its stakeholders respect, opportunities to make a difference, challenges and recognition for doing good. Most of all, it’s about a corporate culture that supports the promise of the organization’s brand and a mission to do good for the environment and the community in which its goods and services are used. This is the very definition of an “engaged organization.” The engaged organization is about being engaged with all components of its business model and the ecosystem in which it operates.

The beginning of the 21st century is the perfect time for the development of the engaged organization, which is very different from the traditional organization. There are more components in the business model and the ecosystem (interactions of the components) is more complex. Thus there is a need for business designers, much like an architect who systematically plans the design of a home, to replace the informal self-taught business designers in traditional organizations. New “professional” business designers can simplify the complexities of the emerging ecosystem in which they operate and actively stimulate an engaged culture.

Nordstrom’s probably is the most well-known example of an engaged organization. It has successfully engaged its entire workforce in creating a positive customer experience and, more importantly, continuously evolved its processes to maintain the engagement of its workforce over several generations of leadership. One of the biggest challenges in an engaged organization is maintaining engagement during leadership changes.

This past December, four Endurant Change Masters and I traveled to Seattle for some training. While we were there we took time to visit the local Nordstrom’s store to “assess” the engagement of their sales people working the floor that night. The Christmas season was in full swing and the store was aglow with holiday cheer.

We talked to six sales people. Half were recent hires for the holiday season and had been part of the Nordstrom team for just four-to-six weeks. In spite of this relatively short time, these newbies exuded all the characteristics of a Nordstrom’s veteran: a commitment to finding a solution to the customers’ quest, a desire to facilitate a positive in-store shopping experience, and a willingness to involve other Nordstrom, and non-Nordstrom, people to help the customer.

One particular sales person especially impressed us. A recent business college graduate, he was planning to pursue a master’s degree after acquiring some real-world experience. He had taken his position to learn the “Nordstrom’s Way,” which, he was convinced, was the way all businesses would operate in the future. While disappointed about his current position, he was very excited to be there and hoped that he would take on other positions as he gained experience. He said that he had learned a lot during his first month.

We were impressed with the passion he expressed for the company. As we asked more and more questions he was quick to bring in veteran sales people to provide the information we were seeking. Our experience in talking with the six sales people was consistent. Each had their own personality but Nordstrom’s corporate culture was clearly evident in all of them. We left feeling that the “Nordstrom’s Way” was safe for at least a few more years.

Nordstrom’s is what we would define as an “early stage” of the life cycle of an engaged organization. It has achieved and maintained over a period of several years three primary goals of an engaged organization:

  1. An authentic leadership team
  2. A positive customer experience
  3. A corporate culture that is pervasive throughout the entire organization

Nordstrom’s is a great example of what an engaged organization looks like and what it feels like to its stakeholders. Engaged organizations in a later stage of its life cycle have radically different business models, including the scope of their ecosystems, merger of their business processes and digital assets, and partnership with product and service providers. At their highest level of maturity they balance the use of these components to operate in their Sweet Spot .

 

Next time: Understanding Corporate Culture