Judith M. Bardwick, Ph.D.
Which company is profitable – one where people say, I have to drag myself to come to work, or the organization where people say, I love this place?
It’s simple enough: when people are treated as though they’re not an asset and they’re easily disposed of and replaced, employees respond by not working as well as they could, by not caring or innovating, and by not contributing discretionary energy, work that goes beyond their job description. In many companies between one-half and two-thirds of employees are seriously disgruntled and even if they show up, they’ve already quit. They’re on the lookout for a new job; they have one foot out the door…
On the other hand, when organizations treat people as valuable assets and show individual employees how much they are needed by recognizing, rewarding and investing in them, employees stay, turnover falls, and sales and profits rise.
The best companies to work for are also the best managed companies. They are led by people who never ignore two things: progress toward business goals and the welfare of their people. When these two values are a basic part of the culture, that organization achieves higher levels of growth, market value, return on assets, and returns to shareholders. In other words, that organization succeeds.
In every industry in every developed country – which is where our data come from – the very best companies earn very high marks from both their employees and their customers and their rate of return to shareholders is triple that of their peers.
When an organization has captured the hearts and minds of its members, their people are involved and enthusiastic; mostly they really care. On a visit to a children’s hospital recently, I spoke with a nurse who had worked there for 29 years. She was as proud of the hospital and as passionately involved with getting kids the best possible care as she had been on the first day she had come to work. That nurse was committed and engaged by the organization and by the responsibilities of her job.
In the best organizations, people take great pride in being a part of that organization and that membership is an important part of their identity. When you ask them, What do you do?, they say, I‘m with Apple, instead of, I’m a software engineer. That is what is meant by commitment. The other driving force is engagement. Engagement is how valuable a contribution people think their work makes to something that really matters to them. Commitment and engagement are the two very powerful engines of enthusiasm and involvement.
Commitment and engagement are enormously powerful feelings, so powerful that high levels of these feelings, both positive and negative, predict how well an organization will do. In companies that have been failing and bleeding red ink, for example, a rise in commitment and engagement predicts future profitability.
The reason for that is quite simple: where there are high positive levels of commitment and engagement among employees, those people stay with the organization and they communicate their pride in the organization and its products and services to customers. As a result, customers become more enthusiastic and they, too, stay with the organization and continue to buy from it. With low turnover rates of employees and customers, and high levels of retention and sales, profits rise and so do share prices.
The opposite is also true. When employees are dissatisfied, there is high turnover, miserable service and widespread customer dissatisfaction. In a competitive environment the customer has many alternative sources for what ever they want to buy. When they are dissatisfied, they leave. When both employees and customers leave, sales decline, profits fall, turnover costs rise and share prices fall.
A friend of mine was on a business trip when her flight was suddenly cancelled. There were about 20 business people on that flight and they all milled around the counter at their gate. 20…25…30 minutes passed and the agent behind the counter continued to ignore them. The stranded passengers grew increasingly agitated and they began yelling, What’s going on?! When’s the next flight! C’mon lady, I’ve got to get to Atlanta!
Finally, after a half hour had passed, the agent slowly turned and faced the group and speaking very deliberately said, I don’t care what happens to you because my company doesn’t care about me.
There’s an old expression, “You reap what you sow”. When people are treated as insignificant, interchangeable, easily replaced faceless widgets, they reciprocate and return the favor.
Making a commitment to people has nothing to do with being “nice.” The only way an organization can succeed in today’s enormously competitive environment is by making significant commitments to the employees it wants to keep while it engages them in ways that appeal to their sense of mission. Then, commitment and engagement soar and so does retention, sales, profits and share prices.