Missing the target on employee engagement? It could be your AIM…

Red and White target with three arrow

Much of what is written about employee engagement centers on metrics such as retention rate, turnover, employee satisfaction, loyalty, productivity and the like. These are quantifiable, measurable, readily extrapolated and analyzed for trends. The nature of outcomes is that they are dependent upon drivers, or causal factors which, in turn, influence or shape the numbers.

When it comes to engaging your workforce, there are three drivers I believe are particularly important. Remember the acronym “AIM”. They are:

  • Attraction
  • Inspiration
  • Mobilization

First, it is important to understand that you can’t directly create retention. Prisons can do that. Your company can’t. So if you wish to reduce defection, you need to improve those aspects of your organization that will continually, consistently attract your employees. Many firms seek to attract new talent to their ranks, but fewer recognize the need to make that a dynamic facet of the workplace experience. An employee who is emotionally connected to the mission, vision, values that are demonstrated (not just published, but routinely evidenced by the acts of leadership) will be less likely to seek other, more potentially satisfying, alternative employment options.

Take a critical look at your workplace, from the viewpoint of the employees. Are they empowered to feel as if they are “the most valuable assets” of the company? Are their needs, desires and goals heard and respected up the organizational chain? Do they trust that leadership has their interests atop the strategic priorities? Is there opportunity for growth and development for all employees?

Next, consider how your organization inspires the associates and managers to deliver innovation, balanced with compliance and the need to perform the perfunctory aspects of their individual roles. It is estimated that 80% of the knowledge within your company is tacit, existing in the ranks of the employees but not formally harvested or broadly accessible. How do you inspire your employees to look beyond the existing paradigms, to chart improvements that leverage what they know, individually and collectively, to help shape the processes and protocols that define the broad limits of your growth? Some firms, such as Coca Cola, provide for a percentage of the work week where employees are encouraged to pursue ideas, in tandem with others across the company, which they believe will deliver a more positive future. The freedom and permission to think bigger than their day-to-day responsibilities is a source of inspiration to the employees.

Finally, the very essence of engagement as a measurable objective is to create, sustain and accelerate positive change…to lead the company and the market, rather than follow or try to catch up. If engagement is the antecedent, then mobilization most certainly is the consequent. Alignment around a consistent vision along with adoption of values across the organization, fueled by an inspired workforce and enlightened leadership, is what overcomes corporate inertia. In an ideal world, positive change begets positive change. In reality, positive change will only bring more positive change if the environment (culture, workplace factors, and leadership) and the broader market direction are evolving at compatible rates. That will be a subject of a future post.

In business as in life, you don’t get what you deserve. You get what you AIM for.

It’s a great day for an IPO!!


Admittedly, on any given day, I don’t pay a lot of attention to the stock market. That said, I noticed this morning that five companies, across a wide band of industries, chose today to launch their IPOs. There was a sixth one that pulled out at the eleventh hour, but we’ll get to them later. The five newly minted stocks belong to a drug maker (Versartis, VSAR), a  network software play (A10 Networks, ATEN) , another technology company (Amber Road, AMBR), a finance company (TPG Specialty Lending, TSLX, and an e-commerce platform provider (Borderfree, BRDR). Each leverages new technology, innovative thinking, creative applications, and a clear focus on the customer.

Not surprisingly, the investment community reacted overwhelmingly positive to the offerings of all five, sending their prices spiraling up, as subscribers exceeded shares available, and the laws of supply and demand took hold. It is on days like this that I am reminded why we are in business. The companies that demand more of themselves than their customers do, the ones that challenge their paradigms and get outside their comfort zone, and reinvest consistently, appropriately into resources, both technological and human, are the ones that will stick. They possess what it takes to achieve a solid, enduring relationship with their marketplace, and they stand create value, for their customers and their shareholders.

Having read the prospectuses for at least two of these companies, I was encouraged by what I saw. They have a clear, distinct and market-centric leadership vision… They know what they are in business to do, and they have carefully managed their funds to date to provide them with a runway to profitability… They have invested in things of substance, like innovation, people, and the community they live in.

I mentioned earlier that there was one company that decided, on the eve of its public offering, to pull out of the process. I had to wonder: Could it be that the very forces that propelled the other five companies to success, when inverted, became the detriments of this one, failed attempt? If innovation, creativity, market focus, and fiscal conservatism, are turned inside out, what do you have? The opposite of innovation is to be a commodity provider, lagging in thought leadership and execution. What is not creative is by definition stale. Firms that lack a tight focus on their marketplace will demonstrate that they are short on new ideas to be harnessed and adopted by their customers. And, as we have seen so many times, especially with the memories of the “dot com” bubble, financial shortcomings can lead to all sorts of maladies, including organizational death or corporate dismemberment.

The one company that could not launch today, a reseller of retail gift cards (Globoforce PLC) may be analogous to what it means to swim inside a riptide. There are very few ways to survive in a fast-moving current, especially when you lack the skills necessary to save yourself.

Buying a product at retail (in their case, a gift card or gift certificate), marking it up 30-50% from its face value, and selling to corporate customers for employee gifts, is notably short on the scale of innovation and creativity. Lacking any unique or patented technology that affords the buyer something that they can’t get from any number of alternative sources, is not exactly a recipe for success. Ask JCPenney or Kmart about that.

One would have to question where the market focus is here.  And, having read their prospectus, the financials of this company would leave one scratching his head as to why the savvy investor would willfully participate in the offering at all. With short-term obligations far in excess of liquid assets, the balance sheet is unattractive to the point of questioning why anyone would choose to have it published for scrutiny. Marketing will only go so far. At some point the numbers have to be there.

Instead of needlessly pondering the vagaries of one failed launch, I would far prefer to hoist up an Irish brew and toast the five wonderfully exciting and invigorating companies that set a new course for themselves today. Congratulations and a hearty “Cheers!”  to all.

Hugh MacLeod, whom you have seen me quote on many occasions, famously said, “The market for something to believe in is infinite”. I believe this is true on many levels, from the spiritual to the pragmatic, and particularly so in the investment community. It’s what has made the capitalist system work, and has elevated many great inventors and tinkerers to positions of national prominence. Here’s to those who toil, ceaselessly, to be the best there is!

Selling branded mud in a rainforest…


I find a dark irony in the fact that a company which peddles one of the most cost-ineffective devices for recognizing employee or channel performance, and staked their credibility on one of the most dubious concepts ever for performance management (the ludicrous and dangerous “Crowdsourced Performance Review”) has now seen fit to air all of their financial “dirty laundry” for the world to see in an IPO filing that, as a novice investor, strikes me as doomed to fail spectacularly.
Over the past twenty-five years, I have witnessed some of the most remarkable disasters brought to the business services marketplace, from the web-crazed days of Flooz and Beanz, to the Hindenburg-like arrival and departure of Amazon.com in the recognition and rewards space, and the frenzied rush to load debit cards when cash was declared the “king” of all things recognition. Flooz and Beanz went away when the first dot-com bubble burst. Amazon got caught with its pants down and realized that having an army of peddlers out there selling merchandise for awards purposes left them exposed to have to charge sales taxes in all 50 states. And money was outed for what it is: great for compensation, but a horrible idea for rewarding and recognizing incremental productivity.
So here we are in 2014, with the latest truly bad idea that involves a company which has loaded up with red-ink cartridges to print their income statements, while publishing audited financial reports showing a profound inability to meet their short-term debt obligations without a quick injection of liquidity, readying themselves for what may be the most embarrassing IPO in memory. This company (which I shall refer to only as “Globo”) would appear to need money, and is willing to shoulder the scrutiny of merciless investment analysts in order to try to get some. What I don’t get is why anyone would buy into a company that: (a) sells a pure commodity product (one that does not deliver value to the buyer on any level); (b) is known largely for a laughable HR premise that serves no interest, beyond possibly that of litigators; (c) doesn’t seem to be able to find a path to profitability no matter what they have tried; and, (d) has 30-40% of their business seemingly wrapped up with one customer. Does that sound like a recipe for success to you? Me neither.
The lessons to be learned here are many:
First, if you are going to attempt to brand a commodity dispenser, you need to have some significant and patented value-add. Poor “Globo” has neither. Anybody can buy gift cards for WalMart, mark them up 30% and try to sell them. The question is: Who would buy them? And who would come back for more?
Second, if you are going to go so far as to have your CEO write a book, it is generally a good idea to have something of value to say. Not just “different” or “revolutionary”, but viable and sustainable. The notion of rating your employees’ performance based on how many friends they have and not the results they generate has the unanimity of appeal of outcome based education, but with fewer subscribers.
Third, Abe Lincoln knew “you can fool some of the people all of the time, and all of the people some of the time, but you can’t fool all of the people all of the time.” Having read the S1 filing for our subject firm, you would have to take the leap that Mr. Lincoln did not know whereof he spoke in order to buy into the value of an investment. It’s not generally a good idea to challenge Abraham Lincoln on just about anything he said.
My advice to anyone who is still with me here: Create value. Hugh MacLeod reminds us that “the market for something to believe in is infinite”. The opportunity to build and sustain engagement across organizations, brands and markets, is also infinite. The idea of peddling a commodity product with a “one size fits none” technology (see my earlier post on “The Procrustean Approach to Employee Engagement”), based on a self-serving vision of corporate enrichment is a lot like selling branded mud in a rainforest. Don’t sell branded mud in a rainforest.

The Procrustean approach to employee engagement and recognition…

the bed of procrustes

Greek mythology tells of a son of Poseidon named Procrustes, who welcomed passersby into his home, fed them a warm meal, and invited them to spend the night. The catch: the guest would have to fit his iron bed just perfectly, neither too tall nor too short. Tall guests would find their limbs cut to the exact length of the bed. Shorter ones would be stretched on a rack until they satisfied the dimension of the bed. Too often, I sense that SaaS models assume a similar approach with the client.

Technology built on a multi-tenant platform can be a highly effective and efficient model for certain applications. There are many examples, including the operating systems, web technology, and office suites we all use most every day. However, when you factor in those aspects of an organization that make it unique –  the complex mélange of HRIS, Financial, Logistics, Operational, and Communications systems, tuned to deliver specific data, insight and information, across Sales, Finance, Operations, R&D, Distribution, Marketing, etc. –  the likelihood of  satisfying these divergent priorities becomes tenuous, at best.

Many of the players in the Employee Engagement space these days showcase their SaaS model for communicating, recognizing, rewarding and measuring individual achievement and appreciation. One of the common problems associated with these service providers is that they are, in many ways, built on a Procrustean infrastructure that requires the client to either, (a) accept what the service provider offers for functionality, reporting and communicating, or (b) amend its strategies around who to recognize, how to recognize them, and what to recognize them with.

The most frequent complaints I hear from customers of these “multi-tenant” technology models center on inflexibility and misalignment of the systems, interface, and processes. The companies sell their technology much in the same way that a CRM provider markets their wares – as a “one size fits all” tool that will work within any organizational model. The problem is that while a CRM houses data, organizes, tracks, monitors and reports on very specific  issues (customer relationship and sales, typically), an effective employee engagement and recognition tool must satisfy many differing requirements. The result is more akin to “one size fits one size”.

Smaller companies, generally with less than 500 employees, can usually be configured to fit within most of the available rewards and recognition technology provided by companies that offer only a SaaS model. Larger, multi-national organizations, certainly those which have grown by acquisition, are not likely  a good fit for the SaaS approach. So what are these frustrated organizations to do? One solution is to look beyond the marketing hype, to find out if a potential provider offers technology on BOTH a single-tenant as well as a multi-tenant basis.

A single-tenant model, when built alongside a multi-tenant strategy, can offer many of the cost efficiencies, while harnessing the customizations that make your organization, your culture and your brand unique. The costs may appear slightly higher, but not necessarily so, when you look at the true cost of having to settle for what a provider can deliver instead of what your company really needs.

The bottom line: Before making a decision to work with a service provider that offers ONLY a multi-tenant technology for your organization, dig a little deeper and find the partner that has a more adaptable, flexible, functional and cost-effective alternative – which may just be the single-tenant option.

If you need some help identifying who is purely multi-tenant, and who can more effectively help you to meet your exact requirements, feel free to drop me a line. When it comes to attracting and retaining your most valued human capital, you should not have to compromise for the sake of a supplier.


Footnote:  A fond acknowledgement to Nassim Nicholas Taleb, for his wonderful and thought-provoking book, The Bed of Procrustes – Philosphical and Practical Aphorisms, a source of inspiration and fodder for exercising (or exorcising) the intellect.