This article was first published online at http://hqasia.org/
With CEOs from across the world rating human capital challenges as a top business priority for several consecutive years now[i], perhaps it’s time to acknowledge the emergence of the Talent Economy[ii]? In the Talent Economy, an organisation’s ability to excel at human capital practices becomes a leading competitive advantage, which drives innovation and operational performance.
The push to bring people management into the forefront of business discussions (alongside strategy, finance and other important topics) has helped to raise awareness of how much we know about good people practice. However, it has also shown how much there is to improve. The drive for more data-driven insight into topics like engagement and leadership is pushing faster transformation. The recent uptick in interest in HR analytics is proof, with HR functions now scrambling to figure out what analytics is and how best to approach it.
The changing nature of work (especially technological advances), the global economic environment and the changing demographics of the workforce are significant factors in this story. In Asia, rapid growth has changed the business environment significantly with leadership and management roles developing quickly. Leadership skills need to be acquired faster than ever before. Against this backdrop, the pace of business continues to accelerate, with organisations constantly looking for ways to adapt, evolve and capture new opportunities. All these factors impact a leader’s capacity to keep people aligned to strategy, focused on their work and engaged with the company.
To respond to this environment, cutting edge organisations are enhancing the feedback cycle between leaders, managers and employees. The shift in performance management practice to be more fluid and continuous is one big change that is currently underway[iii]. Regular employee feedback through surveys and other means is becoming less burdensome which allows for a more consistent stream of analysis around how employees respond to business challenges and how well challenges are managed. This helps senior leaders deliver the right messages faster, and local managers to respond to concerns faster, which improves retention and productivity. Asian organisations need to adapt practices faster in order to continue to build leadership capability within the region.
Much of the research into employee engagement over the last 25 years focused on employee and team-level outcomes (e.g. retention, productivity, sales). All that is valuable but what’s also emerging is clarity about what leaders do to create highly engaged teams and what sort of leader achieves these outcomes. If leadership is the ability to create high-performing teams and organisations –getting groups of talented people to work together to deliver exceptional results – then driving engagement is clearly central to great leadership.
Connecting leadership and employee research shows that traditional models might be out of sync with what actually works and, in particular, what engages employees. Engaging leaders tend to be ambitious, prudent and emotionally stable people who are likely to focus more on others than themselves[iv]. They are not the archetypal “charismatic” leader who commands a room and entertains a crowd. They are more likely to be modest and some have even gone as far as to say “boring”[v].
As Asia develops larger numbers of leaders, keeping these engagement characteristics as a focus of what organisations look for is important. Just because a leader doesn’t have what some might call “executive presence” doesn’t mean he or she will not have tremendous potential to really drive employee engagement. If a leader can create a clear, compelling, challenging vision, learning and growth for his or her team, and if they can keep a cool head in the midst of uncertain times, then they are more likely to have highly engaged employees.
To address this, interventions aimed at raising the self-awareness of leaders can help. Leaders need to understand how likely they are to display engaging or disengaging behaviours, pay more attention to the way they interact with others and the sort of environment that creates for employees.
Engagement is not the end all, be all
Over-reliance on engagement as the only goal will always limit the impact of human capital strategies.
One of the most significant challenges organisations in Asia experience is how to drive innovation and continuous improvement. Very prudent managers, who favour compliance, consistency and reliability, avoid the risks associated with innovation; most employees follow suit. Innovation always comes at the risk of failure and avoiding failure to save face is common. Engaged employees can only generate more innovation in organisation cultures that challenge the status quo and actually drive implementation of new ideas rather than avoiding the risks they create. A holistic point of view of these areas is important to get the outcomes leaders really want.
Creating highly-engaged organisations
After 25 years of researching engagement all over the world, consistency in employee needs is remarkable, no matter where they are from. It is a human tendency to see the differences between people as much more significant than the similarities. As a leader, what can you do to help create a highly engaged organisation?
1. Use your charismatic and creative leaders for what they are good at – challenging the status quo and driving change. Entrepreneurial leaders grow businesses and create opportunities. These people are important for helping to develop a compelling vision and to bring it to life for employees and the external world. Although these are great strengths, those leaders are also often the least consistent – they then end up disengaging employees when the time comes to deliver and so they need support from more stable leaders around them[vi].
2. Create a sense of shared future. Employee life-cycle analysis shows that a person’s priorities change as he or she moves through life and work. This means that the practices and policies used to build a compelling career for someone in his/her 20s often need to be different for the same person five or 10 years later. Some companies have stopped trying to create detailed long-term career paths for employees and focus on three-to-five year blocks (“a tour of duty”). Conversations then focus on what the employee wants to do after that tour, be it inside or outside the company. Where this happens, it often creates powerful conversations between employees, managers and HR partners who not only get better insights into how employees think and feel, but also become better prepared for potential changes.
3. Appreciate individual differences. When we run analyses for companies, we find that somewhere around 30% of Employee Engagement is related to the personality and background of that specific employee whereas 70% is in the hands of leaders, managers and organisational culture. This is where factors like the individual employee personalities and cultural differences start to play a huge part. Remember that every strategy needs to be contextualised at the local level – even Engagement.