Engaging Leaders, Talented Employees

Engaging Leaders, Talented Employees©
Ed Gubman, PhD
Do not reproduce without permission of the author

The Talent Situation Now According to Steve Jobs, founder and Chairman of Apple Computer, "The foundations of a great company are talent and culture. Great leaders understand this idea, and that's how they build their companies. This is the genesis of a winning workplace.

Today this notion is more critical than ever. The US is a service economy; about 83% of our gross domestic product comes from services and information. People create and deliver almost all of this.

But it's not just service businesses. Even though it's only 17% of our economy, we're still the largest manufacturing country in the world. We're also the highest value-added manufacturing economyówe produce the most complex technologies, medical equipment, cars, computers, airplanes, defense systems, and so on. Innovation starts here, and it's because we add more knowledge to manufacturing processes than anywhere else. Where does all that value-added knowledge originate? People, of course.

People have to feel engaged to do a great job, whether they're building airplanes, writing software or flipping hamburgers. Talent that isn't engaged is wasted. Yet engaging people is getting more and more difficult.

Engagement used to start with company loyalty, and surveys tell us that people still want to feel loyal to their organizations. Sadly, employees say they know their loyalty won't be returned, so they don't offer it much anymore. There's no doubt in their minds about this after years of layoffs and restructurings. Like The Who sings, "We won't get fooled again.

Instead, people keep looking for greener pastures. The only thing that changes is the impact of the economy. When jobs are plentiful, more people look. A survey taken by Towers Perrin during the height of the talent wars in 2000 reported that more than half the people in its national sample were "constantly scanning the job market. Now, with jobs much more scarce, fewer employed people are looking. But to many employers' dismay, its their most talented people who job hunt. And these "difference makers keep finding new and better positions. I just reviewed responses to a questionnaire of top HR people across the country. Their answers to the question of what keeps them awake at night: Finding talented people for their companies.

This search for something better isn't going to stopóit's just going to accelerate once the economy starts growing faster. Talented people have adopted a "free agent mentality about their work. Their career security rests inside of them, not with any organization. If jobs are plentiful, they'll change at the drop of a better opportunity. If jobs are scarce, they'll act cautiously, but they'll still keep moving. We need to heed Peter Drucker's words, "Accept the fact that we have to treat almost anybody as a volunteer."

The Challenge for Leaders
The talent-loyalty dilemma puts the load squarely on leaders. People are afraid to extend their loyalty to their organizations, but they still trust their leaders. Now whole teams leave companies following their leaders to new jobs. Most organizations may not be able to build devotion, but great leaders can and do.

Over the years I've worked with several companies that have earned spots on best employer lists. They come from different industries and have vastly different cultures and workplaces. But one thing they all have in common is what I call "engaging leaders.

These are leaders who inspire their people through their passion and their integrity. They show their emotions freely. They tell the truth about their companies' situations, but they constantly point to a positive future. This provides hope, which is the wellspring of motivation. These leaders also are versatile in their leadership styles. They can be tough or tender, depending on what the situation requires. Some are hard-charging drivers, but they know when to slow down and listen. Others are more patient builders, but they know when to step up the pressure for results. These leaders know themselves, know their styles and know when to flex their approaches so they can reach all their employees.

Research from Hewitt Associates on best employers show what these engaging leaders do. Looking across several years of data, we can conclude that engaging leaders:
Invest in their workplaces to produce higher business results this isn't about being nice
Achieve results through relationshipsóthis brings higher returns than just managing the bottom line
Insist that people learn from their mistakes rather than punishing themóthey keep fear out of their workplaces
Maintain a more consistent, long-term view of their organizations' cultures and workplacesóover time employees come to share that view
Communicate more frequently and more personally and make themselves more accessible to employees, and ï Speak directly, honestly and openly to employees.

As a result, employees see these engaging leaders as smarter about running their businesses and better at providing clear direction about what needs to be done.

All of this builds trust, and trust creates a better workplaceóone that attracts and retains more talent. In fact, best employers typically attract twice the number of applicants and have half the turnover of other companies. With better and bigger talent pools, better and bigger business results abound. In every published comparison, best employers provide much higher shareholder returns than ordinary companies. As Jobs said, the foundations for success are talent and culture, and these start with engaging leaders.

Ed Gubman is a founding Board member of Winning Workplaces and the author of The Talent Solution (McGraw-Hill, 1998) and the forthcoming The Engaging Leader (Dearborn Trade, April 2003). He consults and speaks on leadership, talent and engagement. He can be reached at ed@gubmanconsulting.com or (847) 251-8852.