Recently the Harvard Business School faculty conducted research that concluded that CEOs interacting with insiders - employees - had a profound effect on productivity.
"For every 1 percent gain in time (that a CEO spent) with at least one insider, (that employee's) productivity advanced 1.23 percent."
When I read this all I could think was "really?" The Harvard Business School faculty really spent time researching something so blatantly obvious? Was it just so they could apply a number to so predictably apparent an outcome? What they should be researching is why so few CEOs or any other titled management do it in the first place. It being spending time with an "insider". (They refer to insider to differentiate from outsider, ie. customer)
I've led a number of organizations and leading by being out of the corner office is standard operating procedure. It's a leadership style I've expected from the people who report to me. I've never needed to index productivity to prove to myself that being among my employees is a better way to guide an organization than hanging out behind a desk and waiting for people to come to me.
There are as many ways both formal and informal to stay close to your employees.
Formal forums such as town hall meetings or all-employee events or Webinars (my least preferred route, because it's the least personal) allow the widespread dissemination of information with consistency - everybody hears the same thing at the same time - and offers a stage for not just the business leader but his or her staff as well. Held frequently - worst case every 6 to 8 weeks - these forums are helpful. Assumed here is that the information delivered is credible and timely and comes with at least a nod to "insider" information. In other words if the session is nothing more than aping what has already been delivered in another forum, then it's a waste of everyone's time.
In my experience the audience expects to be given news both good and bad. They expect to be able to test the content elsewhere and not find out that it's at odds with a different truth. I've encountered settings where financial information has been withheld out of fear that it would be disseminated outside the company. Employees need to know the score and the only way to know the score is to know how the business is performing. Holding back the information also demonstrates a profound lack of trust.
Entertainment counts. No matter how many communication sessions you hold and no matter what the forum and the location and the content, boring is just that. A good way to insure that your sessions are poorly attended is to batter your employees with copious amounts of copy in a PowerPoint format. During an all-employee session we conducted, we had a group of entertainers - seemingly employees sprinkled throughout the audience - break into a "flash mob-type" song about the business that started as an employee questioning the veracity of my comments while I was on the stage. It surprised the heck out of everyone and was a great way to kick off the meeting.
I've been amazed over and over again that organizations hold information close to the chest yet are surprised when employees don't understand how the company is performing. When I arrived to lead an organization in Canada, I discovered that daily sales were only disseminated to about 20 people. When I asked why, I was told that employees wouldn't know what to do with the information and it could possibly end up in competitors' hands.
After I'd picked myself off the floor and the shock wore off, we devised a plan to teach the employees how to read the report, reminded them that it was confidential and meant to help them better understand and run the business then disseminated it to everyone. It even hung on the bulletin board in a unionized plant. Employees need to know the score. It's part of the interaction between management and employees.
Informal interaction, even impromptu events, have an even more profound effect. I want to share a laundry list of actions I've taken that over the years have made a huge difference in employee performance and morale.
I was assigned to lead a large division and the announcement went out on a Wednesday. I was living in another city, not due to start until a couple weeks later but was in town. As I was leaving, I decided to show up the day of the announcement - unannounced. I drove to the building where the division was located and literally went door to door, cubicle to cubicle. I simply walked in, shook hands and introduced myself. One young man, slouched in his seat in front of his computer, nearly hit the ceiling when I asked him if he was comfortable then introduced myself. It took about three hours to work the whole place, but I saw everyone who was working that day. It was pretty powerful.
While leading a Canadian organization with a diverse business portfolio, I found myself responsible for operations like R&D, manufacturing and the commercial operations of three major businesses spread across the country. I visited the plants regularly. I occasionally showed up at the distribution center in blue jeans and a work shirt, climbed into a truck and delivered product all day. ( I often learned more walking in the back door of a hospital than in the front door.)
Two days a month the cafeteria became my office. My secretary up on the third floor could easily reach me. Employees knew I was there and I was pleasantly surprised at how much less courage it took for employees to approach me in that setting than it took in the office - and my assistant was friendly to everyone! By the way I rarely ate lunch in my office. When I was in town, I bought my lunch - standing in line like everyone else, then dropped in on a different table. It was fun for me, and most of the time, fun for them.
As I walked the building one day, it struck me that the mood wasn't what it should be, so with my HR director we figured a plan to liven the place up. We announced Circus Day. We gave each department $25 dollars to create a ride or booth. Each dollar collected by the Circus would go to charity. We blocked off the parking lot one afternoon, provided free lunch to the employees and had a circus. I don't remember how much money we collected, but the whole place cheered up immediately.
On another occasion in a different location, it was clear that the departments in the organization were not communicating well so - in the middle of winter - we held a golf tournament. The holes covered four floors of the building. Each department had to design a hole that helped non-department members better understand what they did and each team had to be made up of four people who didn't work together. Everyone got into the game, and we had a wonderful afternoon that pulled the organization closer together.
Throughout my career, its not been uncommon to find me sitting in a product manager's office finding out about the product, the customers and what was keeping them from greater success. (Yes, at first it is intimidating, but when they learn that you're not playing "Gotcha!" and that the conversations aren't carried on to their boss, they become trusting and in fact come looking for you.) The bigger adjustment comes from their manager. The chain of command is important when it comes to HR issues but not when it comes to moving business information.
The clerical assistants have always been an important part of my world. In a couple of locations I created an assistants council to help keep me informed about issues in the building that were getting in our way. It was my experience that they saw more than they were allowed to share and had good ideas that were going untested. By the way, manufacturing employees are watching your products being made every day and have many ideas to share. Your distribution center employees are equally insightful.
In every organization I've run we've held weekly and monthly small group employee meetings - breakfasts or lunches - where we can share information about the business, field questions, quell rumors. They are very helpful especially for the employees in manufacturing or distribution operations, ones who are sometimes far removed from the commercial operations.
While leading a nutrition business we made it an annual event to visit our manufacturing plants located in remote sites throughout the US. During those visits each business unit head gave the plant management an update on our businesses. On one visit we worked on a Boys and Girls Club Recreation Center, painting and improving the site then played kick-ball with the kids at the end of the day. That was well received by the plant employees.
It is critical for business leaders to stay close to employees but also to employees' families. I can name the husband our wife of every staff member and in many cases, their children. We held a lot of family-centered events throughout the year. Work happens at work and happens at home and happens on vacation. The better the family feels about the senior management of the organization the easier it is when those unfortunate business intrusions cut short planned family time.
Handwritten letters are indispensable. As soon as you're done reading this, go to a stationery store and have letterhead made. Then go to the post office and buy a few sheets of first class stamps. Keep both in your office, in your brief case and in your home. Every time you see or hear about an activity that you want to reinforce, sit down and hand write a note to the employee. Send it to their home address not the office. Attach a first class stamp, not postal indicia. Drop it in the mail box. Congratulations, you've just left an impression that will never fade.
Never fail to send out a note to an employee on their work anniversary or other important event when ist comes to your attention.
While in Canada we had a number of Canadians overseas on expatriate assignments. Each year I sent them an update on the business "back home," the progress we made and how much we were looking forward to them one day returning. One year, I took that another step and sent a letter to all former employees - who'd left in good standing - keeping them abreast of our success and reminding them they could return should they have an interest and we have a job open.
A few times a year I traveled to various remote cities in the country and held what I called a President's Forum. It was a day-long session and all local employees from all the business units - including sales people - came for a business presentation from me and occasionally some of my staff and then they were allowed to make their own presentation and request increment resources. Everyone felt more informed and engaged when the day was over. When we returned we always funded at least one request if only to show we were listening.
For the past many years I've written a Seussian version of The Night Before Christmas highlighting the year we'd just completed and calling out employees who worked on the various businesses and the contributions they'd made. It was a lot of work. Typically I started writing in October with many, many edited versions. I had a great time presenting it in my Wal-Mart purchased Santa costume.
Over the years I've heard numerous references to "executive presence". I've read articles about how executives are supposed to behave; the right way to address; how to present yourself in the community.
Few have referred to the uncertainty that's come from one downsizing episode after another, uncertainty that plagues workforces in nearly every industry. Because of that uncertainty and the likelihood it won't abate anytime soon, it is more critical than ever that executive presence be defined as executives present on all fronts in all locations with their employees. Compassion, empathy and transparency are more important than ever before.
There are many ways for business leaders to demonstrate their interest in their business but none more dramatic than staying close to and genuinely caring for the people who make the company go and the families they support. The productivity advancement is a lot more than 1.23 percent.
So get out of your executive chair, out of your executive office and into the offices of those employees in your organization. Schedule regular all-employee meetings and make sure the information is fresh and presented in a clever and creative fashion. Think up as many ways as you can to demonstrate you care what your employees think then follow through by actually executing your ideas. Write notes, recognize achievement, go into the cities and towns where your employees live.
Insider trading may be criminal but insider treating - with admiration, respect and interest - isn't.
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