We are facing a management crisis. And our customers and employees are paying the price.
The mantra over the last 20 years, but particularly during the Great Recession, has been “Do More with Less.” Financial pressures have led to gutting anything that doesn’t show a direct return, from business investments to labor in retail stores. But as documented in my white paper, what looks good for 3 months ends up with long-term consequences.
Management is another casualty. Reorganizations and management shake-ups are a regular occurrence. The role of a professional manager who has the time to develop her people is a relic of the past. And that’s negatively impacting both our employees and our customers.
The research linking employee engagement and financial results is compelling:
- A Hay Group study showed high levels of employee engagement can increase revenue growth by 250%.
- Towers Perrin reported that companies with highly engaged employees see operating income improve by up to 19%.
- Gallup shows that locations with engaged employees see 12% higher customer engagement, 18% better productivity and 16% better profitability.
- In a retail study, Donald R. Lichtenstein, James G. Maxham III, and Richard G. Netemeyer found that Organizational Identity [their measure of engagement] was directly related to employee performance, and indirectly to customer evaluations and store performance.
But what does this have to do with managers? The researchers also show that the one person who most impacts your engagement is your direct supervisor. More than co-workers, your boss determines how your day goes. And that determines how you serve your customers. Managers provide the infrastructure upon which your customer experience rests.
What’s ironic is that by trying to “do more with less,” we are giving our managers more work to do. Yet engaged employees are 18% more productive than those who are disengaged. As a result, piling more work onto our managers makes it harder for them to provide that spark that leads employees to do more! It’s a simple case of a short-term sacrifices leading to long-term declines.
Towers Watson points to this very clearly. Their top driver of engagement is “Do workers feel managers are genuinely interested in their wellbeing?” Similarly, Lichtenstein and team found that “Raising managerial OI [Organizational Identity] by a value of 1 on our seven-point scale increases employee OI by 0.29 of a point; raising employee OI by one point increases customer OI by 0.25 of a point; and raising customer OI by one point is associated with customers’ spending $71 more per year per person at the retailer. So in retail, at least, managerial OI is a crucial part of how companies can differentiate themselves and improve their sales.”
What’s frightening is when you combine these two studies. Lichtenstein reports that managers directly impact employee effectiveness. But Towers reports that fewer than 40% percentage of workers agree that their manager is genuinely interested in their wellbeing %! More than half of our employees do not have the most basic building blocks of engagement – a manager who they believe cares for them!
But perhaps that’s not so surprising now that management is secondary to “getting the job done.” Most managers receive more training on the copier than they do on developing and engaging their employees!
Engagement in Action
To illustrate this point: Two weeks ago I gave a keynote address to 470 managers. I asked them to stand if they received training in the last 12 months, and about 400 stood up. Then I asked them to remain standing if the training was to become a better manager – and 375 sat down!
A great customer experience requires engaged employees. How can we expect to improve employee engagement if we don’t train their managers on how to do that?
Your takeaways are clear: If you are a leader, look to your managers. Are you giving them the tools and the training they need to engage their teams? Or are you loading them down with so many of their own tasks lists that they don’t have time to manage? Are you building or destroying the infrastructure needed to support your employees and your customer experience?
If you are a manager: Ask yourself what you are doing to teach yourself to be a more effective manager. If you can’t get training, pick up a book. Or, better yet, find an effective manager to serve as a coach.
And if you’re an individual contributor? Well, management shake-ups happen all the time. If you’re manager isn’t a good one, just stick around. Maybe the next one will be!