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The murmuration of life…

A murmuration of starlings over Gretna

Ask any starling…Time flies when you are having fun. Well, I sure must have been enjoying one heckuva good time the last six and a half months!! Wow. Has it really been that long since I posted up on ideationz? Yup. It sure has.

I feel as if I owe my friends and readers a little explanation. So, here goes: I have none. All I can tell you is that  I’ve been working with some wonderfully talented folks, creating global engagement solutions for some of the biggest household names in the land. I’ve been listening, reading, watching, speaking with, sharing ideas among, and mostly learning about a myriad of changes underway in organizations, cultures, brands, and channels.

New issues, from wading through the market realities of ACA, to the migrational shift underway in the workplace, to the global reallocation of resources and capital, to the impact of QE3 on worldwide equity markets, have made for no shortage of change in all aspects of business, politics, economics and lifestyles.

This hiatus from ideationz has provided me with more to muse over, more to ruminate about, and more time to re-energize my emotional batteries. Change is good, change is real, change is everything. And it is time to get back to the fundamentals of adapting, innovating, and enduring. The flock of thought is forming.

Thank you for being there while I was away. A new year of ideationz starts today. Hang on, it’s gonna be a helluva ride…

“Here’s to the crazies…”

Thank you, Hugh McLeod, for memorializing an icon using the words he put into our lexicon, rather than those of his fans, fanatics and followers.

Why Richard Thaler maybe was wrong, and how that proves his theory….

Behavioral economist Richard Thaler conducted a landmark study a number of years ago, concluding that the reason why it is so hard to hail a cab on a rainy day in New York City is because once the cabbies earn their expected income for the day, they go home. The point is (was) that money is not a prime motivator… If it was, then cabs drivers would work extra hours when the demand was up (as on a rainy day).

This afternoon I conducted my own research in Manhattan, consisting of a single interview with a 23-year veteran cab driver. And what he explained to me was astonishing. The reason it is so hard to hail a cab in NYC on a rainy day is a function of traffic flow. You see, when it rains in Manhattan, things really slow to a crawl, particularly on the East-West Streets that take traffic in/out and across the island. As a result, turnover in cabs is dramatically slowed. A ten minute ride becomes a fifteen or twenty minute ride. The result: fewer available cabs, seemingly at times no available cabs.

What does this suggest? Well, it does contradict the finding of Thaler. But it also suggests something else. A NYC cab driver today pays $700-800 a week to use a cab. That is before paying for gas. A medallion today goes for over $800,000. Cabbies therefore focus more on covering costs, not maximizing their income.

Thaler’s study was relevant years ago, when there were fewer vehicles on the city streets,  a medallion cost under $100,000 and cabbies paid $150-200 a week. But not today. You see, it has much more to do with Maslow than with Thaler. Which, in a way, makes a stronger case for non-financial rewards to motivate behavior change. The reality is that most every worker is concerned with “covering their costs”…the lower echelon of Maslow’s hierarchy of needs. A substantially greater portion of society are (by definition) “under-indulgers”. They (we) are so centered on preserving what they (we) have that the ability to indulge on a guilt-free basis has largely disappeared.

The point here is that non-financial rewards, for consumers as well as for employees, are much more meaningful and significant than they were even ten or fifteen years ago.

I read recently that the age of affluence is fading, quickly, in America. This speaks to a social issue, and with it, a reality that guilt-free indulgence may be subordinated to a rewards program. How? By steering away from money or things that feel like money (gift cards come immediately to mind). People will shout, more than ever, that they want more money. But don’t be mislead into believing that you will see higher performance by offering dollar-denominated rewards. Why? Because employees are already giving all can to protect their income and lifestyle. That is an economic reality. Offer them a chance to revisit a bit of affluence, or maybr experience for the first time what it feels like to bask in guilt-free indulgence, and they will amaze you with their response.

I’m not married to the company…but I am engaged…(Part 4)

 

In our previous three segments of this series, we have drawn a bead on employee engagement, and the critical need to improve employee loyalty as a prerequisite to future business results.

Employee engagement is a organizational virtue while “sustainable growth” is a measurable outcome, albeit subjective to the extent that one defines what “sustainable” means and what constitutes “growth”…

If we view “sustainable” as effecting a minimum of two successive quarters (or longer), and if we define “growth” as improving top-line performance, such as net revenue increases, then the term takes on a sales metric. If the term “growth” speaks to productivity (e.g., revenue or net profit per employee, or units of production per hour or per employee, or some other operational metric) then the term becomes one of organizational performance.

Either way, there are common traits indigenous to both perspectives. Specifically, you need to have established:

  • An aligned understanding of the mission, across all the levels of the organization,
  • Accountability as to divisional, departmental and individual performance requirements to support the common goal,
  • Agreed-upon key performance indicators (both behavioral and operational) that will mark progress toward the desired future,
  • Sufficient skills and competencies upon which to build performance,
  • Willingness and commitment to a defined set of objectives, incorporating goals that are defined by the individual,
  • A cultural value of recognition to acknowledge and reinforce those associates who lead the way down the path to improvement, and
  • Tangible and intangible rewards (non-monetary, and outside of compensation) to cement the linkage between individual and/or team achievement and public acknowledgement of contribution.

Sound impossible? Not in the slightest. The companies that do these as a matter of common practice are, not surprisingly, the same organizations that attract and retain the best talent. They are the companies that have the most loyal customers, and achieve category leadership in their space.

How do you begin to assess your own company needs in order to further or expedite progress toward your goals in 2011 and beyond? For starters, fire me an email (pulito@biworldwide.com) and let’s chat. I’m not looking for business here, just an opportunity to hear about your company’s challenges, and share some thinking about how you might tackle them. Let’s talk!

The art of air…

Crossing into Vancouver, BC, from Washington state, you find an oddly fascinating “billboard” on the side of the road…Unlike anything you have ever seen before… No catchy wordplay, no alluring models, no flashing neon lights. In fact, there is nothing. Period. Nothing but, well, air….

A billboard, made of nothing but air…?

Hats off to Lead Pencil Studio, to chief creatives Daniel Mihalyo and Annie Han, who (to quote Fast Company magazine) have “blurred the line between architecture and art”.  If one objective of both is to stir thoughts and feelings, then this project is an unqualified success. Bravo!!

Why most rewards and recognition programs fail to live up their promise….

 

In my business, which is centered around changing behavior to achieve measurable outcomes, I have seen every sort of recognition and reward strategy imaginable, from the stellar to the cellar… There are some simple predictors of failure that are just too hard to ignore. 

The first warning sign is when recognition is based solely on subjective factors, as is too often the case with “manager discretionary” rewards programs. Unless there are some guideposts established around what is worthy of recognition, and how much value should be assigned to the types of behaviors which earn recognition awards, you risk claims of “favoritism” or “selective administration”, neither of which will benefit your long-term effort. Training, communications and measurement are central to making sure that everyone understands when, where, how and with whom the recognition should take place. 

A second red-flag is invisibility within the organization. Unless the opportunity to be recognized is valued, present and accounted for across the company, and at every level, it will tend to be forgotten about or overlooked. Some companies will intentionally bury the recognition opportunities as a means of minimizing the expense associated with rewarding exceptional contribution. If you see the initiative as an expense, rather than an investment, odds are it will live up (or down) to your expectations. 

One of the most common flaws I have seen is when a recognition and rewards program simply mirrors job requirements. In other words, the basis for being recognized is largely lined up with what people are paid to do anyway. While the employees may love it, the effort is not going to generate much in the way of incremental or innovative effort. Recognition programs should target behaviors that are either outside an associate’s compensation or possibly even in opposition to the requirements of the compensation (but are strategically important). Example: A call-center rep may be expected to handle X number of calls per hour, with a targeted average call handling time. However, if the strategic direction is to migrate that rep from customer service to generating revenue, it needs to be understood that average handling time may be longer. Thus while the rep is paid to efficiently manage the call volume, the effective use of incentives might be applied against improving revenue growth.

The biggest faux pas, though, is when those planning the initiative myopically center attention on “getting the most value” for the employees in terms of rewards. Typically this means looking for the most transparent cash-equivalent reward media, such as dollar-denominated gift cards or non-reloadable debit cards. These are generally sold with a fee attached for fulfillment and touted as providing the “best value” for the user. However, as many studies have shown, using money (in any form, including cash, debit cards, gift cards or any other form of dollar-based media) as an inducement to drive performance is more likely to backfire than it is to deliver the outcome you are looking for.

 There is a solid backdrop of quantitative behavioral research that demonstrates the point that once you introduce dollars into a recognition and rewards environment, you bring into play a complex, subconscious computational process that instantly calculates the individual  “relative worth” of the effort required to perform at a higher level. Usually, when this happens, the company loses (unless they are offering an unreasonably high reward for a relatively low level of effort). 

Another problem is human nature. People want more money, in any form or format, but they suffer guilt if they use it on something that is purely hedonic. If you are rewarded with an additional $100 in your check, it tends to blend in with your other income, and you either don’t notice it or you use it to pay regular bills with.

If you are given a $100 gift card, you may or may not use it, and if you do use it, you are likely going to spend more than the value of the card, and again on something may you feel “obligated” to buy. This is okay, but it doesn’t really represent a meaningful, memorable act of recognition. Ditto for the debit card. 

If you are rewarded using an award media that is not articulated in dollar-terms, you are far more likely to use it (guilt-free) to redeem for something that you really want (but won’t buy, even if you have a debit or gift card to use for the purchase). One of the concerns that many clients have had in the past is that there simply is not enough value in the points provided to purchase awards on par with the values available at retail. That is an old story, and one which is no longer the case. Our company, for example, which does more of these kinds of programs than just about anyone else, has over 40,000 reward selections, on its way to over 100,000 reward selections, many of which are priced at/below retail counterparts. 

So how do you insure that your employee rewards and recognition program is going to be a success? You can increase your odds by aligning yourself with a company that has been doing this for 50+ years, can bring you a stream of innovative, new technology and is willing to invest in the success of your initiatives. Your employees are your most valued assets, and deserve the best, most effective rewards. Logic might say, “give ‘em money”, but experience has proven, time and again, that it takes a lot more than that to inspire, mobilize and sustain an innovative employee base.

I’m not married to the company, but I am engaged…(Part 2)

 

In a previous post (September 10th) we described employee engagement as being comprised of “employee involvement in and commitment to the mission of the organization; engaged employees are fully invested in their role, demonstrate loyalty to the firm, and are active in the pursuit of expanding their contribution to the organization.” That’s quite a mouthful.

What exactly does it mean? How can you improve the level of engagement within your company, your division or department, or your team? And, really, why should you? Let’s take these one at a time.

What exactly does it mean to improve the level of employee involvement and commitment to the mission of the organization? How will you create a workplace culture that encourages workers to invest themselves in what they do, commands the loyalty of the employees and compels associates at all levels to expand the degree to which they personally contribute? Dan Pink speaks of the critical need to nurture mastery, autonomy and purpose…all of which are well articulated in his landmark book, Drive. Those are admirable, without a doubt, and given a cultural foundation which values these qualities, they would no doubt deliver a powerful outcome, at least in terms of employee satisfaction. The rub is that there are few organizations that could sustain such a massive shift in cultural priorities/behaviors.

A study conducted in June, 2010, by The Hay Group reports that compensation has little (if any) bearing on employee engagement. Quality of leadership was the strongest determinant of employee engagement. A natural conclusion would be to recruit those leaders who bring demonstrated results in employee engagement. Short of turning over your leadership ranks, what else can be done? One consideration is to include the supervisors and managers in the design, delivery and assessing of rewards programs. Doing so has shown to generate more broad support across the employee base. Rather than design systems at a senior leadership level to recognize and reward employees, there is data to support that design influences closer to the rank-and-file employees will help to craft a more effective, meaningful approach. Also, given the limited impact of compensation, it is advisable to consider the full range of total rewards, not simply financial ones. Factors such as organization climate, work-life balance, the nature of the job and the quality of the work, career advancement opportunities, avenues for expanding skills and competencies, and recognition of individual productivity above and beyond published requirements are all key to improving employee engagement. It’s not about money. It’s about latitude to shape individual growth and contribution, building a sense of organizational and interpersonal appreciation, providing a voice in innovation and participation in gestating the new ideas for improvement.

Among the most significant findings of the study by The Hay Group were that companies which experience higher levels of employee engagement tend to:

a. More heavily weight engagement levels in evaluating performance of line managers, and,

b. Incorporate employee engagement performance (data) into variable pay/incentives, including tangible awards, and,

c. Specifically define what “employee engagement” is within the organization, and,

d. Include employee engagement goals in the organization’s strategic planning.

Companies that follow the aforementioned practices are more likely to find that their total rewards strategies are effectively engaging employees, are more effective in fostering high levels of employee engagement and motivation, and are more confident that they will retain key talent as the economy turns up.

The careful integration of the following four elements will have a significant effect on employee engagement from a practical point of view:

 a. Communications to align beliefs, understanding and employee perceptions,

b.  Learning and advancement opportunities to create employee mobility upward and laterally,

c. The deployment of listening posts that quantitatively assess progress toward agreed-upon strategic engagement goals, and,

d.  Integration of non-financial, tangible rewards for employees, supervisors, managers and leaders to recognize participation and contribution are all critical components of an effective engagement strategy.

This is a big subject that cannot be adequately addressed in a blog post. You can expect  more on this in future posts. I hope that this insight and ideation will provide you with some new thoughts to consider. Please, as always, feel free to leave your comments and suggestions!

Get an STD, and receive a gift card…

Okay, so gift cards can serve a social purpose…especially if you have syphilis… Not sure if this says more about people with STDs or people who shop at Wal-Mart and McDonalds or the underlying nature of gift cards…but clearly there is a connection between the three here (!)

Gift Cards used to lure those with syphilis