7
Full and sustainable employee engagement begins with a CEO or business owner. The true “Engagement CEO” has the kind of awareness and commitment to recognize the mindset and skills required in a fully engaged organization. Much of the employee engagement “industry” tiptoes around this subject. God forbid someone loses a consulting assignment because we asked too much of the CEO! But let’s be clear: this is what it takes. But what does it mean to be an Engagement CEO?
An Engagement CEO:
1. Takes charge of the culture personally.
2. Develops a strong leadership brand as evidenced in their consistent behavior and messaging.
3. Walks the talk, leads by example, and leans toward democracy over elitism in any form.
4. Expresses continuous, genuine, and worthy praise to their employees.
5. Constantly seeks ways to keep their talent current and relevant.
6. Treats employees as the organization’s greatest asset versus a potential liability.
7. Packages engagement as a profit source rather than an expense.
8. Effectively manages and educates all stakeholders in the need for effective people initiatives.
9. Moves the vision from short-term financial performance to long term-value, brand strength, and reputation.
10. Tells themselves and others the truth, especially about change.
11. Keeps themselves directly connected to the front line.
12. Is transparent and expects transparency throughout their organization.
13. Shows respect towards all employees and learns from all of them.
CEOs of public companies have a specific group of stakeholders that usually need to be masterfully won over. Shareholders are often the biggest influences that push CEOs into short-term profit pushes rather than long-term growth. CEOs intent on building the business into its highest and strongest place need to link the development of people to that growth. Linking engagement to profit is one of the ways to secure their long-term support.
If any or all of these sound crazy or seem elusive to you, let’s start by understanding some of the beliefs that routinely get in the way of these characteristics being more common.
“Engagement initiatives are a sidebar activity, a perk provided to our employees.”
In truth, the business purpose of employee engagement is far more rigorous than simply making employees feel better. Being awake and present, journeying through change, and becoming better and more competent through the years represents one of the best and most demanding potential performance growth initiatives. Getting there demands everyone’s involvement and support, including as a leader who insists on across-the-board excellence.
“It’s cheaper and easier to hire new employees rather than keep someone who is working in ‘the trance.’”
In most cases, a CEO can justify high turnover to their shareholders. Minimal questions will be asked. On the other hand, they tend to give up on long-term investments such as building a category-leading workforce or developing the kind of talent that produces results that exceed all of the shareholder targets. But here is what’s unrealistic about this belief. If only 13 percent of the world’s workers are highly engaged, where are we going to go out and get them? Without leveraging a strong and rising employer brand, this widely held idea is delusional and also dismissive of one of the great opportunities for all businesses that is available right here and right now.
Become the greatest employer brand in your market. Develop the greatest talent pool. Create a workforce so magnetic and positive that customers come because they look forward to the experience. Build a culture so caring and supportive that people grow into their best selves. This is the kind of excellence that doesn’t come from feeling good, singing a few rounds of “Kumbaya” and moving on. This level of excellence is centered on building the kind of environment in which talent insists that everyone plays to their best ability, and grows continuously because they are invested in others and appreciate the impact your organization has on them. In other words, your organization does more than simply provide an income, it is a place that people come to live, grow, and expand their lives.
“Employee engagement is the purview of white-collar workers with cushy jobs.”
Try telling this to the U.S. Marine Corps or the cashiers at Trader Joe’s who have worked there an average of 18 years. Our line workers tend to be the majority that raises or lowers the expectations of our customers. The disengaged are the ones that make faulty ignition switches, which can kill people and damage the reputation of the organization. They turn their backs on customers. They don’t care.
These are also the very workers that we must train to change if they are to remain vital members in our culture. They are on the front lines. They take calls from irate customers or stand on their feet all day. They run forklifts from dawn to sunset and drive trucks through every imaginable neighborhood. Not only do they hold the biggest hand in our ability to engage customers, they can be the ones who make the products we treasure or the ones that break in our hands during the first use. In the category-leading workforce, the CEO recognizes their power and empowers them fully. And, at that moment when a product isn’t working and the customer is under pressure to get it fixed, they smile, they tell us everything will be okay, and it actually is okay. As a customer, we walk out the door feeling satisfied and acknowledging ourselves for picking the right brand, the one with the great people who go to any lengths to provide excellence in quality and service.
“There isn’t enough time or resources to create an engagement culture.”
When a culture is disengaged and its talent isn’t adept with change, leadership finds itself constantly putting out fires, trying to woo back customers, laying off workers, and alienating critical talent. This is often the time that valuable talent development gets axed because CEOs with axes tend to start hoarding money and cutting costs. This logic is opposite of what is needed, which is critical strategic investments that will help them stabilize and regain footing. Most do this to keep the shareholders off their backs, but occasionally the axe legitimately has to fall. The axes even fall in high-performing organizations, but those events tend to be a seismic shock because they so rarely occur.
Richard Branson offers sound advice on this topic:“Train people well enough so they can leave. Treat them well enough so they don’t want to.”1
When a CEO leads the culture and makes the engagement solution a part of the culture, bringing it “in house,” the company is in the strongest position. Develop our people so well that they can work anywhere, and surprise them by being their best employment option; this combination creates the type of loyalty and enthusiasm that takes an organization to greatness.
In many cases, time should be invested in building rather than trimming. Often, it is difficult for a CEO to hear this when in the midst of a business crisis. However, that is typically when vision, communication, transparency, engagement, and a strong culture will be the only things that can pull the organization through.
“Create a strong consumer brand and the rest will follow.”
In modern business, the employer brand has become as important as, and in many cases more critical than, the consumer brand. A case in point that most everyone will recognize is Yahoo. When a top-tier graduate comes out of Stanford, Georgia Tech, or Carnegie Mellon, they are most often looking to become an employee with Apple, Google, Facebook, and other tech leaders. Essentially, the real competition for this talent is entrepreneurism. They are not even thinking of Yahoo. In fact, many of them would consider joining Yahoo as a career killer. Consequently, Yahoo has a dim future.
Marissa Mayer’s strategy for bringing Yahoo back was centered on acquisitions with which she could gut the talent to shore up the bench strength of Yahoo. Let me repeat that: she bought other companies to recruit enough talent to keep Yahoo running.2 What was its cost of talent acquisition? Unfortunately, her team did little to change the employee culture and the employer brand. In the technology world, it is easy to understand how talent directly impacts brand. But strong employer branding, the kind that attracts the best talent in any industry, can spell the critical difference between profit and failure.
For a CEO that has built his or her previous success on consumer focus, changing their mindset can be difficult and yet, like anyone else, no CEO is immune to the pitfalls and breakthroughs associated with personal change, the very skills we are promoting here. More pointedly, everyone reading this book is human, with all of the attendant shortcomings, the ability to make up erroneous stories, to stretch the truth and shrink-wrap the results around our comfort zone. That’s what humans do.
As I have shared, we learn nothing of real value by studying dys-function. We learn our greatest lessons by studying success. I don’t spend too much time studying organizational and leadership failures. They all have the similar problems that were not solved in time or on time. So what are the common threads among CEOs who lead highly engaged cultures?
Every year, Glassdoor conducts a national vote from employees on its CEOs.3 Here are this year’s top five. They have several common themes across the board with the addition of some wonderfully unique characteristics:
#1: Bob Bechek, Bain & Company—99 percent
In an industry that is not particularly known for its transparency, management consulting firm Bain & Company treats it as a critical part of its culture. As an employer brand, Bain is recognized as a company in which someone can rapidly grow. Much of the continual growth that takes place among all Bain employees is based on a strong and sophisticated mentorship program. There is little life balance. Bob Bechek came up through the ranks and has an extraordinarily strong reputation as a brilliant leader.
“I think the reality of power and influence and getting things done is overwhelmingly about informal authority nowadays,” Bechek argues. “New MBAs should be focused on how to develop the skills associated with that. But the reality is, even in my current role, the vast majority of what I do is exerted through information and not formal authority. If you’re involved in trying to get people galvanized around a particular course of action—or to feel inspired about what we’re trying to do or feel appreciated, motivated, and valued—that has almost nothing to do with formal authority.”4
#2: Scott Scherr, Ultimate Software—99 percent
I periodically work with Ultimate Software and find its talent personifies the very word. Its people are smart, enthusiastic, grateful, outgoing, and happy, and demonstrate the highest performance and service standards. The company has a stellar 97-percent customer retention rate. Virtually every client organization that uses Ultimate Software is somewhat religious about the experience. Much of this loyalty is based on effective and enthusiastic employees. It is the only employer in the top five to place great emphasis on work/life balance. Recently, Mr. Scherr said, “I feel humbled. I think [employees] trust me to take care of them and their families.”5
A member of Fortune magazine’s 100 Best Places to Work issue, Ultimate Software makes it a point to start on the right footing with an elaborate onboarding process that includes trips by every new employee to its Miami headquarters.
#3: Dominic Barton, McKinsey & Company—99 percent6
Not known for its work/life balance, McKinsey invests in the professional development of its people more than any other company in the management consulting industry. Combined with full transparency, McKinsey and Barton’s leadership presents the ideal home for ambitious and hard-charging professionals.
A large cadre of newer professionals gets recruited into more lucrative positions in their second and third years, and yet the vast majority of them look back at McKinsey as the platform that launched their highly successful careers.
#4: Mark Zuckerberg, Facebook—98 percent
Many of the employees speak of Mark Zuckerberg and Sheryl Sandberg’s humility, their willingness to listen, and their commitment to create a fully open and transparent culture. One employee said, “It might be easy to roll your eyes when people say how open their culture is, but it’s true, it’s more open than any other place I’ve worked at.”7
Zuckerberg has said:
Find that thing you are super passionate about. A lot of the of the founding principles of Facebook are that if people have access to more information and are more connected, it will make the world better; people will have more understanding, more empathy. That’s the guiding principle for me. On hard days...that’s the thing that keeps me going.8
Zuckerberg’s leadership style includes great passion, instilling purpose in everyone at Facebook; he is utterly committed to the company’s people and to the product.
#5: Jeff Weiner, LinkedIn—97 percent
The downside of LinkedIn’s culture is, once again, work/life balance and strikingly few workers over the age of 40.
These technology and consulting giants work in environments with extreme change impacting every worker virtually every single day. Jeff Weiner is loved for producing a culture that pushes growth. The first question asked after a new hire or promotion is, “What is your next play?”
Weiner’s most telling interview was on SuperSoul Sunday with Oprah Winfrey. He tells her the greatest advice he received from his mentor Ray Chambers, a Wall Street icon who pioneered the leveraged buyout and who later walked away from financial success to study happiness and pursue a life of philanthropy.9 He shared Ray’s five principles of happiness:
• Live in the moment.
• It’s better to be loving than to be right.
• Be a spectator to your own thoughts, a fundamental key to compassion.
• Be grateful for at least one thing every day.
• Be of service to others.
• • • • •
Our top five CEOs have several traits in common. But, there is one that overrides all others: none of them take shortcuts.
Additionally, each CEO drives the following characteristics and values:
• A fully engaged culture and a superior employer brand.
• The best possible products and services, or excellence at every turn.
• The organization makes the world a better place.
• The organization makes every attempt to fully engage with every customer.
• There is simply no substitute for human decency, compassion, understanding, and a pursuit for “the high road.”
Let’s examine an elephant in the room. In many cases, working at a category-leading organization precludes any sense of work/life balance. Some of our examples include organizations that put a great deal of through into helping employees establish a strong balance with raising families, pursuing personal interests and having regular “time out.” In many cases, work/life balance isn’t part of the equation and yet, the employees are highly engaged and praise the CEO. When we examine these cultures, we always find transparency, mentorship, strong change skills, and strong at-work relationships. Many of the people who work in environments like this view work/life balance as another fad. Engaged workers get more done in shorter periods of time. Engaged workers also tend to be engaged in every other aspect of their life. The more awakened we become, the more skilled we can apply to drawing boundaries, getting others to help us, and being strategic in how we want to live.
I asked colleagues and clients alike to recommend one person who embodies all of the characteristics of an Engagement CEO. One name kept coming up: Adam Miller from Cornerstone OnDemand. The company first came to my attention when my colleague Mary Campbell moved USC’s entire learning and development division onto a digital platform. It was a daunting and complex project that shifted 25,000 employees into virtual learning and development. Cornerstone provided the platform, which became one of the biggest online learning programs in the academic world. Mary was thoroughly won over by the consistency in Cornerstone’s performance, service, and sophistication. Cornerstone’s 95 percent customer retention record during a 12-year history is unmatched and endemic of an awakened workforce.
My colleague Kim Shepherd is one of the more visible leaders in the digital-based talent world. She endorsed Adam as an individual who built a category leader through walking the talk, transparency, and authenticity.
Adam Miller began the company in his apartment with his two friends Perry Wallack and Steven Seymour. Today, Cornerstone OnDemand helps many of the world’s largest companies recruit, train, and manage their people. More than 27 million users in 191 countries and in 42 languages engage with its software and services. Cornerstone has become one of the world’s premier resources in continuous learning and development.
We arrived at a building complex that is typical of the playfulness and interactive environments so common among tech leaders. The employees caught my attention. Everyone looked us in the eye and smiled, everyone who directly engaged with us was genuinely interested and interesting. The energy was positive, comfortable, and upbeat.
Adam Miller was named Entrepreneur of the Year by Ernst & Young in 2011 and CEO of the Year by the Southern California Technology Association in 2009. He lives in Los Angeles with his wife and three children. He often tells the media that becoming a father became the wake-up call that pushed him to make Cornerstone as successful as possible, because time away from his children had better count.
We joined Adam in his office with Deaira Irons from marketing, a recent addition to the team who personifies all the company looks for: bright, alert, interested, and kind.
I gave them an overview of what is happening with employee engagement and why the global numbers are so dismal.
Adam: You mean they can’t keep up with the changes in their jobs?
David: They can’t! Most of the existing processes to end disengagement are like using a teaspoon to put out a fire. The ability to personally transform is the new game in being relevant for any length of time, and until we help all workers build the skills of self-change, matters will only get worse.
Adam: We’re in the 13 percent.
Mary: You built this on a different philosophy than many companies out there.
I read the characteristics of an Engagement CEO.
Adam: There is one missing characteristic.
David: What’s that?
Adam: Shows respect towards all employees and learns from all of them.
David: Were you like this your whole professional life?
Adam: I worked in investment banking years ago, and it was the antithesis of tech culture. It is more of a feudal system where you become a leader by how much money you make rather than how you treat people.
Mary: Punish the serf in the way you were punished when you were one.
Adam: Exactly. You would give people literally busy work. People would get assignments on Friday afternoons and told it had to be finished on Sunday afternoon or Monday morning. Many were expected to work all-nighters once a week or multiple times in a week. I remember coming into the office when it was smaller and one of the developers was bragging that he had stayed up all night. I told him that if he did it again, he would be fired and that people are never productive when they pull 20 hours. Much of what he wrote would have to be rewritten because he was so exhausted.
This culture with Cornerstone really began in the beginning and it was in opposition to what I had witnessed. We were committed to a balanced workplace. It was a little bit later in our existence where we articulated our culture. When we had 30 people, we knew we had a culture but it hadn’t been defined. There was a turning point when we had 50 and would triple that number by the year end. New people would outweigh us 2 to 1. We formalized the culture. That began with the kind of people who work here who are smart, cool, dependable, and visionary. We believe in teamwork and client success. We were very clear about that, and then over time, found ways to infuse those qualities throughout the organization in how we hire people, how we develop them, how we fired people, how we did performance reviews, and how we recognized others.
David: You were directly involved in all of the early hires.
Adam: Yes. I hired the first 250 people. I personally hired all of them. After 250, it became impossible. My job became entirely interviewing.
I stopped hiring the individual contributors and hired the managers...we have over 2,000 employees, so it just isn’t feasible to continue hiring employees. I do the final interview for people that are critical for representing the company in certain ways.
David: How do you hire people that are going to protect your culture DNA?
Adam: Early on, I hired the managers. I selected the ones that would hire others. I loosened up when they proved themselves. For a while, I was the last interview. By the time they got to me, they were already meeting performance and technical requirements. But, I rejected quite a few candidates, almost always on culture fit. Periodically fights brewed about that because it was so hard to find someone. But that persistence built the standards.
Mary: It is rare, uncommon that at the top of the organization, the quality of the culture is viewed as such a significant asset where they are often primarily focused on other strategic elements. So, they push those culture pieces over to the human resources and talent people. The results are an ill-defined and squishy culture.
Adam: Our talent professionals are among the best brand ambassadors for Cornerstone because they are the ones doing a wonderful job of finding and attracting the talent we need to join our team. They are the ones upholding performance management and growth. Other things we did in our early days set the standards. We had a top performer who I fired because they were a bad culture fit. That was the first time when people took culture seriously. Here was a top asset that was not a fit with us. It didn’t matter. It was established early on that the team is more important than the individual.
David: In an earlier interview, you said that by opening in Los Angeles you were put in the position of having to hire potential rather than experience.
David: Is it the same way?
Adam: It is a little less true today because tech has grown in LA. But when we began, B2B marketing and software development were extremely difficult to find in LA. We found it was better to find the people with the right competencies and build their technical skills. We did this by only hiring people that were active learners. You describe this need throughout the world. Well, it is more true in a tech company. It is exponentially truer in a hyper-growth company where we have to find people who are capable of moving up from the baseline. Most tech companies don’t operate that way. In hyper growth, they regularly pull out the individuals that are not keeping up with the growth. The way we did it here, the reason we have had such stable and high retention is that we hired people that required the same characteristics of active learning and in interest in personal growth. We hire the ones who demonstrate they want to learn and are ambitious. As a result, they have grown with us.
Mary: I bet you had some casualties.
Adam: Very few. It could be said that we defy the odds because in so many organizations, only one or two will make it because they are exceptional. I am saying the opposite. Only one or two did not make it because everyone had the attributes. Our people make it because they are continuous learners when they arrive as well as in the parochial process, because these are the people that get promoted.
David: What would you suggest to your client companies that have significant challenges around employee engagement and change?
Adam: I’m in agreement with you. You have to start at the top. In a world where Millennials are expected to have four to six careers in their lifetime, it has to be a place to keep learning and developing. It can’t be a place where you were hired for a single job and expect to stay in that spot forever. There also has to be a major shift that happens in the corporate world, historically, where managers identify people they want on their team, you develop them and you keep them. In a world where people are expected to have multiple careers, you cannot have management push people into their box and keep them in that box. Early on, we identified that we were going to promote mobility and encourage mobility throughout the organization. At Cornerstone, that mobility is geographic where someone is not only able to move anywhere in the United States but [in] the world. It is divisional where someone can move from department to department within a division but also cross-divisional mobility where someone can move into an entirely different area of the company. We have had Millennials and Gen-Xs move throughout the entire organization in many different positions at times where in another organization they would have had to quit in order to grow.
David: You must have an incredibly transparent organization for that to work.
Adam: It took time because the managers were at first very resistant but again, we grow for the culture; we promote for culture and our people learn, especially our executives today, that mobility works for the organization as well as most of the people in it. A few leave but more come.
Mary: Academia has an enormous problem in this area. These institutions attract some of the world’s best talent but they are resistant to sharing. The hoard their best so many of them…
Adam: Leave.
Mary: So many organizations could protect their best talent by providing them with options.
David: The reason so many people have difficulty with change is because they have significant deficits in what many organizations dismissively call “soft skills.” Here we frame these skills as the ability to draw healthy attention to one’s self and give healthy attention to others. We find it in the ability to build effective professional communities within and outside the organization.
Adam: The company can certainly enable these skills; they don’t have to wait for an employee to take the initiative. We view these as crucial management skills and expect them to help their employees to develop the skills of collaboration, mentorship, peer communication, connecting with other parts of the organization, and getting others to help them. Many managers have these skills but some require training. Periodically a manager has to be removed. We expect our managers to be good role models and mentors. I have a strong belief in the player/coach model.
David: We have been studying the role of mentorship in AA and believe organizations have a lot to learn from it as a success model. Here we have an entity that has no organization, no fees, no leaders, no real structure, and yet it has continued to grow and succeed for decades.
Adam: Well you are coming from a “pay it forward” mentality. Building relationships and continuously building our teams is a central part of our culture. Recently, a senior executive got married and I noticed in the wedding pictures that over half the guests were from our company. That is the norm.
David: In the years since you launched this company to today, what have been your most difficult lessons about talent?
For a moment, he went inward and we could see him scrolling through the years. Suddenly, a cloud came into his eyes. He was clearly pained.
Adam: We had one situation between two employees that went south...we had a very painful situation on our hands.
David: I learned a great deal about you in this moment. You are so disciplined and consistent in building values into your business and surroundings that you answered my question with a clearly painful employee relations event. Most CEOs would have so many or be so out of the loop that it wouldn’t cross their mind. One human capital nightmare comes along and it rocks your world because it is so out of sync with your values?
Adam: Yes.
David: What else did you learn that was difficult?
Adam: It is always a balancing act to satisfy the needs of the shareholders and the clients and the culture. Building relationships throughout the organization is such a big aspect of success. Once a year, we take everyone for a big party on the beach. Invariably I see people at their desk working and tell them, “Let’s get up and go.” They respond, “No, I have something that needs to get finished.” I come back with, “No, this is more important.” Maybe we push a deadline back one day and make it more important for people to get to know each other. That doesn’t happen in a lot of companies.”
Mary: It doesn’t. You dragged that employee away from something that he was conditioned to treat as more important than his own opportunity to bond and connect. I bet he came back full, energized, and deeply engaged.
Adam: It requires long-term thinking. You have organizations that tell a candidate, “We need for you to start right away.” But the candidate says, “Oh, I hoped to take some time off, get away, decompress.” We tell them, “Take whatever time you need. We will still be here.” We have the same point of view with flex time because you can shift time. Certain deadlines matter and others are not so critical.
David: What would you like us to know before we leave?
Adam: When we were a small company, we probably had about 40 people. Every year we would do something on our anniversary trip. We had no money. We asked everyone to write down a list of the perks they would want if we did have money. What order would you want them in? We set early on that even as we created shareholder value that we would be socially responsible. I believe the idea of the company itself is socially responsible. Regardless, we would build a foundation. In the last five years, our foundation has given over $125 million in impact. One of the things we did early on was to give to the shareholders, employees, and the community. We would be built on balance and we have delivered on that promise. As we became more and more successful, we added much to resources that we offer, as much as any top employer in the world.”
David: Do people give their time?
Adam: We do.
When someone in our company reaches seven years, we provide them with seven week sabbatical. We have a lot of people going on sabbatical. That gives a sense of how long people are with the company.
We have a competitive culture. So our people even compete in who has the “coolest sabbatical.”
As the interview finished, Deaira Irons helped us gather our belongings and walked us to the lobby. I turned to her and asked, “What do you think?” She smiled broadly, “It is all true. I have worked in some great organizations but the moment I came through that door, you could feel it. You could feel the energy, the kindness, and intelligence, all of it coursing through the halls. I am new, but this place feels like home.”