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Saturday, August 24, 2013

Would Your Employees Recommend You? 08-25

Would Your Employees Recommend You?



Reproduced from MIT SLOAN Management Review

Image courtesy of Flickr user Kumar Appaiah.

The answer to that simple question may reveal a lot about your organization.
The success of the comic strip “Dilbert” and the television series “The Office” is testament to an enduring problem in the workplace: bad management. Most of us have at some point had direct experience with narrow-minded, egocentric or micromanaging bosses, and we have seen how much damage they can cause in a working environment.

Why is there so much bad management out there? Over the last five years, I have asked many executives for their views on this question. A common answer is that the system is to blame — dealing with corporate bureaucracy pulls us away from our role as a manager of others, and it doesn’t reward us for being good at that job either. A second view is that there is a form of knowing-doing gap: Managers know they should be delegating more and giving credit to others, but they struggle to do so because their default behavioral setting is one of control and self-promotion.

There is some truth in both these answers. But I believe there is also a third reason for the paucity of high-quality management in many large organizations: Most managers have a remarkably narrow or ill-thought-out understanding of how their employees actually look at the world. Imagine what would happen if managers could get inside their employees’ minds and relate to their genuine motivations, needs and fears. My guess is that those managers would start doing a dramatically better job. Not only would they know how to motivate each individual employee, but they would also become less self-centered. Ultimately, your role as a manager is to enable your employees to do their best work. And it is pretty hard to do that if you believe the world revolves around you.

So, if you want engaged employees who feel inspired to do high-quality work, you need to make sure you and all the managers who work for you are doing their jobs well. This sounds obvious, but it isn’t that easy to assess the quality of your managers, as there are so many different facets to the job. And many executives actually deliver results despite their poor people-management skills — something that works fine in the short term but is damaging in the longer term. In short, we need a better and more focused way of assessing the quality of management in our organizations. And I think it can be done with a single question: Would your employees recommend you?

If you have a background in marketing, you will recognize that question. It is derived from the work of Frederick F. Reichheld, author of the book The Loyalty Effect. Reichheld realized that a company’s best customers don’t just become repeat purchasers; they also talk the company up to their friends. He developed a tool called the Net Promoter Score, which measures the extent to which customers are actively promoting a product or company to their friends and families. This metric has become a common way of tracking customer loyalty in consumer markets.

I believe this concept applies just as well inside a company as outside. Your employees aren’t just passive recipients of your efforts to create a great place to work; they are also potentially your biggest promoters. Of course you want happy and engaged people working in your company. But it’s the highly engaged ones — the ones who are talking up your company to their friends and families — who make a real difference, because their enthusiasm is infectious.

In 2010, I was working with a group from Hoffmann-La Roche Ltd., the Swiss pharmaceutical company, which had the idea to apply the Net Promoter Score internally. The team developed its own metric, which members called the Net Management Promoter Score (NMPS). The question was worded as follows:

“How likely is it that you would recommend your line manager to a colleague, as someone they should work for in the future?” (1 = not at all, 10 = extremely likely.)

The team’s thinking was that this question would be a useful way to get a grip on the overall quality of management in the company. And they really liked how sharp and to-the-point it was. “I have often filled in pages and pages of questions in 360-degree feedback surveys about people in my organization, and after a while you lose focus,” recalled Jesper Ek, one member of the team. “If we could narrow down to a single, meaningful measure, everyone would benefit.”

The team tried the NMPS with a subgroup of managers and found that it was strongly correlated to Roche’s broader measures of employee engagement. The results were presented to various senior executives, two of whom quickly incorporated the measure into their own quarterly employee surveys. “I would like to see it used to compare the performances of different regions or business units, over time,” said Jesper Ek. “An improving aggregated score year-on-year would be a great advert for prospective employees.”

Following this Roche experiment, I have also used the NMPS in some of my research and consulting work. It serves two purposes. First, it is a useful overall indicator of the workplace climate in a unit or organization. For example, when I surveyed 10 companies, the NMPS ranged from -28% in one company to +61% in another. In other words, in the lowest-scoring company, there were 28% more people who were detractors than promoters of their managers, and in the highest there were 61% more promoters than detractors. By tracking this number over time, you get an interesting indicator of how well-managed a company is.

The NMPS can also be used as feedback for individual managers. Of course, this is very direct feedback: There is nowhere for the manager to hide if his or her score is negative. But increasingly companies are recognizing that this type of feedback is necessary for improvement to take place. The information technology services company HCL Technologies Ltd., for example, has used a 360-degree feedback survey where the aggregate results are posted online for everyone to look at. As Vineet Nayar, vice chairman of HCL Technologies, has argued, you gain trust through transparency — by holding managers accountable to the people who work for them.

What’s more, the NMPS is a good indicator of the level of employee engagement in a company. In my own surveys using the NMPS, the correlation between employee responses about their level of engagement at work and the likelihood that they’d recommend their manager to a colleague is approximately 0.75, which is very high.

Employee engagement is an indicator of how much discretionary effort a person is likely to put into his or her job, and it is influenced by a range of factors, including the nature of the work, the physical working environment, the development opportunities and the quality of colleagues. This high correlation between employee engagement and the NMPS suggests that all these other factors may be secondary. No matter how good a workplace a company provides, it may all come to nothing if the employee dislikes his or her immediate line manager.

Reproduced from MIT SLOAN Management Review