As the Engage for Success movement celebrates ten years since its launch at 10 Downing Street, David MacLeod and Nita Clarke, the authors of the report that kicked off our movement, reflect on why employee engagement remains central to individual and organisational success – and why the UK needs engaged employees more than ever.
It is no exaggeration to say that the British economy is standing on the edge of a precipice. COVID19 is proving to be the most significant disruptor our companies and organisations have experienced in our lifetimes. Even as we gradually – hopefully – emerge from the state of emergency, many employers are still reeling at its impact, scrambling to adjust decades of management approaches and cultural certainties to deal with the challenges it has brought in its train.
At the same time, Brexit has thrown many of the jigsaw pieces of our economy into the air, while the government struggles to articulate just what our new sovereignty means in terms of a long term economic approach, and indeed has abandoned entirely any idea of a national industrial strategy, to the dismay of much of business. We know we need to level up our economy to benefit the regions left behind by prosperity but the roadmap to the aspiration of building back better remains unclear.
Beyond these immediate challenges, the world of work and employment continues to be transformed before our very eyes, with the deep impact of new technologies and methods of production, of artificial intelligence, of genetic medicine, meeting the headwinds of new and changing customer and consumer demand.
New national economies are rising, spearheaded by China, no longer willing to be the sweatshop of the world, but charging ahead in innovation and bringing new products to market. Above all the challenge of climate change and the move to carbon neutral economies poses deep dilemmas for traditional sectors and ways of working.
And underlying all of these complex challenges is the UK’s historic failure to raise productivity. – which is reflected in our dismal per capita GDP growth and which in turn constrains individual income growth and national spending. Since 2010 output per hour has risen by a feeble 0.4 per cent annually; on top of that Brexit has cost the UK an estimated 4 per cent of GDP permanently, and COVID19 another 3 per cent.
ways of working are shifting rapidly
Now, as organisations try to keep up with the future we have to reflect on the fact that the tectonic plates that have been underpinning our traditional ways of working are shifting rapidly. Not only are external pressures –rapid changes in technology such as robotics, disruptive business models, customer choice to name but a few – bearing down relentlessly, but the hugely increased transparency that social media brings opens up every organisational decision to public view – and public censure. Reputational damage is now the number one risk organisations face.
At the same time, the pressures from below are bubbling up everywhere, as people at work demand more control over their daily working lives, a chance to grow, to be treated with respect and to be heard. It is not just the younger generations who are driven increasingly by explicit values and ethics, who look for meaning and purpose in the work they do and expect their employer to reflect social and cultural values such as environmental awareness and diversity and inclusion, as well as concern for the health and wellbeing of individual employees. The experience of working through the pandemic will only have heightened these concerns.
And all this against a background of political upheaval, of the growth of poisonous nationalisms and intolerant populisms which threaten to divide communities and make the world a much less safe and more uncertain place.
If Britain is to meet the growing and inexorable economic and social challenges we face, we need successful productive companies and organisations that can rise to the challenges of global competition and increased customer, consumer and citizen demand– and that means workplaces, large and small, which are productive, responsive, externally focussed, innovative, and agile. It means overcoming our long-standing productivity challenges, and upping our game to match our international competitors.
Unleashing the power of people at work
The key to unlocking such a future lies in unleashing the power of people at work – across all occupations and social classes. We need workplaces where employees are motivated, aligned with the purpose of the organisation, committed to its success, and confident about the future; in short, engaged.
But Houston, we have a problem. Given the challenges we face, our existing approaches to how we organise and manage people at work are manifestly failing.
Our entire workforce is increasingly diverse and decreasingly deferential, reflecting the changes in society as a whole. As a result, the 20th century organisational model based on command and control management, which sees the workplace as a gigantic machine, and the workforce simply as disposable factors of production, a problem to be managed rather than a source of competitive advantage to be nourished, has run out of road. Time and again its shortcoming are revealed in the plethora of reports and public enquiries which expose the profound weaknesses of workplaces based on hierarchy and bureaucracy, which stifle individual initiative and enable unethical and toxic cultures to flourish.
People are not ‘human resources’
The so-called professionalisation of management has reduced everything to bean counting: ‘if you can’t count it, it doesn’t exist’. The consequence has been to squeeze the humanity out of organisations, to relegate the creativity that resides in every one of us, to deny individuals the right to truly own the challenges in front of them. Failure to recognise that people are not ‘human resources’ but unique individuals has contributed to the avalanche of mental health problems suffered by people as a result of their work. It has also led to underlying attitudes which ignore the importance of diversity and inclusion which are only now beginning to be addressed.
Of course, changing these entrenched attitudes and ways of working is easier said than done. While there are some exemplar workplaces to be found in all sectors of the economy – and we need to understand what they do and learn from them – for far too many people work is neither satisfying or productive; for far too many organisations, performance falls far short of what is aimed for, and required. The cost is huge: frustrated individuals, underperforming organisations and a loss in national income as a result.
In a real time experiment, the evidence from the last year is clear. Organisations that were able successfully to navigate their way through the pandemic did so by relying on their employees. In a time when workforces were often dispersed to the four winds as a result of homeworking, experienced radically changed working patterns, delivered customer services in a very different way – managers had no choice but to trust their employees to step up and meet the new demands.
The COVID experience demonstrates beyond doubt that while good leadership is very important, work is a team sport – it requires everyone to play the game to the best of their ability.
In recent years there has been a growing interest in how organisations can change to meet the demands of the new world. Greater understanding of behavioural economics has gone hand in hand with an appreciation of the importance of fairness and wellbeing at work; above all there has been a growing realisation of the central importance for performance and productivity of developing a workplace culture which motivates and engages employees in the purpose of the organisation and its goals, and gives them a say in how that purpose is fulfilled.
There has to be a better way
The employee engagement movement, building on management practice and the insights of decades of academic endeavour and developing management and leadership theory, as well as growing evidence of the correlation between engaged employees and organisational performance, emerged from the conviction that there has to be a better way.
The importance of engagement is now taken as axiomatic in many quarters. In the NHS for example, low levels of staff engagement in trusts is seen prima facie as a danger signal, correlating with poor levels of patient care and mortality outcomes. Leading companies, for example in the UK car industry, make the very clear link between effective people management and performance. Retail organisations have long known of the link between highly engaged employees providing excellent service leading to satisfied and loyal customers – the service profit chain analysis that goes decades back to research at Sears Roebuck. In the hospitality and airline industries having engaged employees is seen as a competitive differentiator.
This dawning realisation that ‘it’s the people, stupid’ has led to some significant developments. Whereas a decade ago people issues were rarely seen as ‘strategic’ or on a par with investment and market decisions, more leaders and boards acknowledge (at least superficially) the link between people practices and strategy. The investment community is gradually waking up to the importance of people indicators in assessing a company’s health and prospects; there is pressure for better listening to employee voice, with recent Financial Reporting Council guidance on inputting employee views at board level.
Too much dabbling in engagement
Nevertheless, there’s still far too much dabbling in engagement. Some organisations that have ‘tried’ engagement have found it more difficult than they had anticipated to make a real and sustained change in their culture. Some have become entangled in the annual round of the staff survey, which runs the risk of becoming a self-perpetuating exercise: cascading results, tasking managers with improving them – usually through ‘improving communications’ – and then examining the often microscopic movements in results in forensic detail, a kind of displacement activity that gives the impression of action, but achieves little on the ground. Others believe a single bullet, such as introducing a staff newsletter, will change how employees feel overnight. Or changes are done to the workforce out of the blue – such as introducing ‘dress down Friday’ with a fanfare – leading to the cynical ‘who are they trying to kid’ conversations around the watercooler.
Unsurprisingly, the latest statistics from a range of survey providers reconfirm that levels of disengagement remain stubbornly high; the proportions identified in our 2009 report Engaging for Success – a third positively engaged, a third neutral and a third positively disengaged across the UK economy as a whole seem to still reflect the reality.
Unfortunately, engagement is not a quick fix – it entails a deep understanding of the existing culture and its drawbacks, and an ongoing commitment to make changes that are real and sustained, with the participation and support of the workforce, and which are designed to deliver a different kind of workplace, one which serves the purpose of the organisation, where employees can perform to their best.
There is still such a long way to go
All the pre-COVID and pre-Brexit evidence – from productivity figures to employee engagement levels – showed just how far we have to go in achieving this goal. To do so we need to radically rethink the way we treat our workforces. We need positive cultures where people are engaged, offering more of their capability and potential, where they feel supported and well managed, with a compelling vision for the future, with a voice, working in a trusting environment, where their well-being is regarded as vital to underpin and sustain this engagement.
In a world which moves so fast it is no longer enough just to have the ‘right strategy’ at boardroom level. The twists and turns and rate of change is such that in the end your only asset is your people. Whether you view them as the route by which you face up to a significant competitive challenge, or as a regrettable necessity and a problem to be managed, will determine whether you succeed.
Achieving better workplaces and improving working lives is not a soft option or an idealistic dream. Not only is it vital for the health and wellbeing of people at work, it is vital for improving productivity and performance. It remains a key way of securing a sustainable economic future for the UK and a better life for its citizens.
Forward to the next 10 Years!
So the central aims the Engage for Success movement set itself a decade ago – to promote the importance of employee engagement, to provide the tools, tips and techniques to help individuals and organisations develop their own engagement strategies, and to shine a light on good practice, all freely available to everyone – remain as vital as ever. Forward to the next ten years!