Hold Managers Accountable

One fundamental belief I’ve cultivated during my tenure at Kronos is that every employee deserves a great manager. Managers are integral to employee engagement and overall job satisfaction. The best, most talented people would rather have a bad job working for a great manager than a great job working for a bad manager. As I mentioned earlier, employees might join organizations because of the company and the compensation package, but they leave organizations because of their manager. Gallup even found, as a Harvard Business Review article noted, that “half of all employees in the United States have quit jobs at some point in their careers in order to get away from their bosses.”¹ That’s scandalous!

How do you improve the quality of your managers? The standard answer is training—lots of it. Most large companies offer some kind of training program for their managers, as do we. But training alone isn’t cutting it. A 2015 survey of 1,000 employees in the United States found widespread dissatisfaction with bosses, with a majority of respondents faulting ineffective leaders for “not recognizing employee achievements,” “not giving clear directions,” “not having time to meet with employees,” and “refusing to talk to subordinates.”² What managers need, in addition to training, is accountability, including performance metrics and benchmarking. Otherwise, their efforts will diminish over time, and any formal training they receive will do little good. In the words of one Kronite, managing people and focusing on their development is “always the first thing that falls off the plate when you’re prioritizing things.”

For most of our history, we lacked quantitative metrics that specifically tracked manager performance. After I became CEO, that started to bug me. I couldn’t understand why almost all engagement measures traditionally deployed by organizations focused on the employee-company relationship. Organizations asked employees how happy they were with compensation, communications, training, and the like, while failing to probe the employee-manager relationship. Didn’t organizations want to know whether managers were serving employees well, providing clear direction, career guidance, helpful feedback, and other kinds of support? Didn’t they want to know if managers were building trusting relationships grounded in open and honest communication?

FROM CULTIVATING MANAGERS TO MEASURING THEM

For the first decade of my tenure as CEO, these questions remained just that—questions. We had other priorities to address to become a great place to work. As I’ve recounted, our early attempts to improve our culture included hiring a seasoned chief people officer and defining culture as a strategic priority. We also began paying closer attention to employee responses on our annual engagement survey, which we’d had in place since 2005. We had developed a reputation for not acting on feedback from the survey, with employees asking, “Why should I participate in these surveys when no action is taken?” We started to take action based on employee feedback. In addition, we began holding managers accountable for telling us what they were doing to improve engagement, checking on their progress in subsequent surveys. I also began to trigger change simply by practicing many of the leadership behaviors described in this book. By 2013, we had made significant strides in becoming a great place to work. In 2010, 61 percent of Kronites felt engaged. By 2013, thanks to our initial attempts to improve our culture, 73 percent did (and today, of course, our engagement numbers are much higher).

We had by this time been undertaking a dramatic transformation of our business model, moving our products into the cloud and selling them to customers as a subscription service. By 2013, we realized that despite the efforts we’d made to improve our culture, we had much more work to do. Becoming a software-as-a-service (SaaS) company was taxing our workforce as never before. Consultants we’d hired identified a range of specific manager and employee behaviors that typically allow SaaS companies to succeed. In addition to having everyone work harder and longer than they had been, we’d need Kronites to become more disciplined, collaborative, communicative, and daring. We’d also require more flexibility. Some employees would see key dimensions of their job change, while others might have to find employment elsewhere. How would we undertake these dramatic changes without compromising the important cultural gains we’d already made? How could we apply pressure to our workforce without employee engagement, retention, and other measures plummeting?

To maintain the affection, commitment, and loyalty of employees, and to retain our attractiveness to potential recruits, we took two primary courses of action. First, we reconfigured our employee benefits—a process I’ll describe in Chapter 9. Second, we intensified our efforts to grow our culture, mobilizing our managers as part of the effort. In 2013, we highlighted the strategic importance of employees by defining and branding our culture, calling it WorkInspired. The name reflected our understanding of the employment partnership: Kronos agreed to provide an inspiring place to work, and in exchange we asked that Kronites perform their work tasks in an inspired way. To further enhance our culture, we altered how we measured employee performance, emphasizing three core behavioral competencies: character, competence, and collaboration. We affirmed that we cared not only about our performance itself, but about how employees achieved their results. Recognizing the key role that managers play, we created Building Management Capabilities, a training course for all managers that guides them through effective coaching, development planning, performance evaluation, and other managerial core competencies.

In 2015, we launched Courage to Lead as a one-time training course, setting out a three-part behavioral model for all Kronos managers. This model sought to describe both the organization we were at the time and the organization we aspired to be even more fully going forward. As I described in Chapter 3, we asked managers to be bold yet humble, to challenge Kronites but also support them, and to disrupt existing practices but also make efforts to engage and connect with people. Behaviors we associated with these three planks included trusting others, assuming their competence, communicating openly and honestly, and making hard decisions to aggressively solve problems throughout the organization.

Subsequently, we created a system of ongoing training around Courage to Lead that continues to evolve. Prior to becoming managers, high-performing individuals who think they might want to lead teams can take a self-led course called Courage to Lead: Emerging Leaders that exposes them to our expectations of managers, and that allows them to compare their current skills and behaviors with what we require in our Courage to Lead model. They can then discuss any skills gap with their manager, taking steps to build their skills in advance of becoming managers themselves. Once employees become managers, they undergo Courage to Lead: Jumpstart, a self-led assimilation program for new managers that outlines the key responsibilities of the role, the Courage to Lead model, competencies and goals, and the key processes and programs in place to support them. A few months later, new managers can take a two-day skill-building course called Courage to Lead: Foundations during which we confront them with specific situations and challenges so that they can practice applying the Courage to Lead model.

At about the time we rolled out Courage to Lead, we also instituted a campaign called Make the 5HIFT that was designed to instill five specific behaviors we’d need to thrive as a SaaS company. As Lisa, who headed up our Transformation Management Office (TMO), a group we created to lead our organizational change, recalls, “We were asking people to act very differently and to do things very differently. They needed to enthusiastically adopt that we were transforming our entire business, and that we would have a new SaaS-centric culture.”³ Make the 5HIFT focused on the five behavioral areas that we identified as gaps for us: “customer first, humility, empowerment, collaboration, and courage.” We also identified specific behaviors to eliminate, including pushing all big decisions up to the executive committee, finger-pointing, pushing client problems off to other teams within Kronos, siloed thinking, the excessive tailoring of offerings to individual customers, and so on. Make the 5HIFT sought to influence employees to demonstrate desired SaaS behaviors as well as to understand that they all had to step up and help us become a SaaS company.

Together, Make the 5HIFT and Courage to Lead deepened our commitment to a culture based on trust, transparency, and other values described in this book. But we still lacked that key element: manager measurement and accountability. In 2016, we finally took this next step. I had wanted to field a short and simple survey to measure managers’ performance, asking Kronites blunt questions about their managers like “If you could decide today whether to work for your current manager or not, would you?” At a conference I attended, one of the speakers, the head of human resources for a large global company, described how his company had jettisoned annual performance reviews. Instead, the company asked managers to rate employees every quarter, filling out an online survey that asked, “If you had the choice to hire this employee again, would you?” I loved the boldness of that, but I didn’t get why this company would only have managers ask this question about their team members. Why not also ask employees whether they’d work for their manager again?

Our chief people officer convinced me that we should take a more thoughtful and sophisticated route, so that we could understand why people did or didn’t like their managers. Building off of our Courage to Lead model, we researched the behavior of outstanding managers, contacting other companies for their perspective, studying the specific practices employed by top Kronos managers, and querying a group of Kronites about actions they associated with excellent managers. Compiling all of this research, we created a concise profile of a great Kronos manager, refining it in employee focus groups to build a new model focused on the manager-employee relationship. Under this model, managers were expected to communicate openly and honestly with their teams, sharing information and providing constant feedback. They were expected to empower and enable their team members, encouraging judicious risk-taking and trusting employees. They were expected to develop and encourage their team members, fostering excellence and providing support and coaching. And they were expected to support the whole employee, honoring work-life balance and appreciating the diverse strengths that employees bring
to bear.

With this work in hand, we reviewed our existing employee engagement survey questions to determine whether or to what extent they measured these behaviors. We had posed dozens of questions as part of our engagement survey, covering areas like business strategy and process, talent strategy and process, our culture, and impressions about senior leadership. We modified certain questions and added others that focused specifically on the managerial behaviors we’d identified. Out of this work, we created the Manager Effectiveness Index, or MEI, which captured employee judgments about managers’ performance.

LAUNCHING MEI

We administered the manager effectiveness questions to Kronites as part of the engagement survey we executed twice each year. Employees responded on a five-point scale, with responses ranging from “strongly agree” to “strongly disagree.”

My Manager—Communicate

1.   My manager is available when I need him/her.

2.   My manager makes an effort to get the opinions and thinking of the people in our work group.

3.   My manager regularly shares relevant information from his/her manager and functional leadership.

4.   My manager ensures I understand the business strategy and how my work influences it.

5.   My manager provides ongoing feedback that helps me improve my performance.

6.   My manager communicates clear performance goals for me.

7.   My manager helps me understand my compensation and conveys the rationale for pay decisions.

8.   Within the last six months, my manager had a productive discussion with me/our team about his/her plans to address the feedback from the Manager Effectiveness Index.

My Manager—Develop

9.   My manager challenges our work group to meet higher standards of performance.

10.   My manager actively looks for opportunities for me to grow and improve my skills.

11.   My manager has had a meaningful discussion with me about my career development in the past six months.

12.   My manager has ongoing, meaningful discussions with me about my professional development.

My Manager—Empower

13.   My manager empowers me to make decisions that enable me to do my job effectively.

14.   My manager helps me navigate barriers and roadblocks that prevent me from working effectively.

15.   My manager encourages our work group to take appropriate risks to improve business results.

My Manager—Support

16.   My manager does what he/she can to ensure I have the flexibility to balance my work and personal life.

17.   My manager truly cares about me as an employee.

18.   My manager shows appreciation when I do a good job.

19.   My manager provides the right amount of direction.

We didn’t just throw MEI out there, leaving managers to make sense of it on their own. First, we only shared the initial batch of MEI scores with the manager being evaluated, not his or her manager. This would give managers time to digest their scores and think about forming a personal action plan. (Starting with the second round of scores, we shared results with managers and their managers.) Second, to protect anonymity, we only shared employee MEI feedback with managers who had three or more direct reports respond to the questions. Third, since we expected these managers to use the feedback to create and implement development plans for themselves, we provided them with materials that helped them understand MEI’s format and purpose, interpret the data, and identify areas for improvement. Fourth, we gave managers access to one-on-one coaching and a set of training materials to help them hone their skills. These training programs spelled out a range of possible actions managers could take to develop specific skills in which they might have shown weakness. The training also helped managers discuss their evaluation results with team members, giving them sample agendas for conversation and suggesting ways that they might frame key ideas. We regarded these discussions as critical to fostering trust and open communication between employees and managers and to reinforcing accountability.

When we first announced MEI, we tried to present it in a way that wouldn’t put people managers on the defensive. We explained our philosophy that every employee deserves a great manager, as well as how important we believed managers to be to employees’ experience. As we told managers, our intention was to give them a tool that would help them improve. Although most managers appreciated the tool, some perceived our entire effort as excessive. “You’re putting yet another item on my plate?” managers said. “It’s enough that I have to manage my people every day and do performance reviews. Oh, and I have to undergo Courage to Lead training. Now you’re telling me that I have to care about my MEI scores, too? It’s too much!” We had to absorb this pushback and work with it as best we could. As our chief people officer said, “We were moving from a company that wasn’t as sophisticated about management to one that was. That’s not going to happen by itself. There will be some portion of the population that kicks and screams.”

WORKING WITH MEI

Fortunately, the number of naysayers was relatively small. Since our first round of MEI scores, we’ve seen an ethic of continuous improvement take root among our managers. “I don’t know that I ever thought this,” said Becky, one of our managers, “but I’ll just spill it: it’s not easy to be a good manager. Even for the best managers, you still have to work at it every day.” In some cases, MEI results alerted managers to weaknesses they didn’t even know they had—they didn’t communicate well, for instance, or they didn’t spend enough time helping employees strategize about their career aspirations. These managers addressed their weak areas, and in many cases improved their scores (68 percent of our lowest-scoring managers improved within the first year). Our formerly mediocre or average managers were becoming great managers! As for the weakest managers who couldn’t improve, even with the intensive coaching and training we gave them, most have either left the company or given up managerial roles.

One of our leaders, whom I’ll call Carly, hadn’t had many “career talks” with her direct reports, and was amazed at what happened when she finally did. She learned so much by asking questions such as, “What are your career aspirations?” and “What would you like to be doing in three or five years?” To her surprise, some of her direct reports desired a more aggressive career track, while others who were new parents wanted time to figure out how to balance their careers with their family obligations. Based on Carly’s conversations, which were prompted by our MEI, she improved connections she had with those individuals and was better able to plan for her team’s growth and evolution.

Adam, one of our leaders, learned from MEI that he wasn’t having enough conversations with employees two levels down who reported to managers he was supervising. These lower-level employees wanted a chance to communicate their concerns directly with a leader in their department. “I have to be conscious that it’s important,” Adam said, “and all of our schedules are crazy sometimes, but you have to make the time to ensure that employees are engaged, and if they’re not feeling engagement from their own direct manager, then they have face time with me.” For Adam, MEI’s underlying value lay in its ability to foster honest communication and responsibility. “I’m not going to hide from [a subpar score]. It’s an area that needs to be improved. Let’s talk through it. Let’s figure it out. Let’s be a better group together.”

Some managers got creative in using the results. Interested in improving his scores, one manager—I’ll call him Ben—decided he wanted deeper feedback from members of his team. He knew that if he asked team members about his performance individually, they might feel reluctant to speak frankly. So he brought them all together in a conference room and then left, asking them collectively to leave detailed comments about his performance. When he returned, he’d have a list of anonymous comments that he could use to modify his behavior and approach. As his manager related, “He was able to use that tool in a nonthreatening manner to get the exact feedback and examples [he needed]. It’s been so much fun to see his scores improve over the last 18 months.” Another manager followed up on her MEI scores by having each of her team members write a report that captured their feelings about their development and plotted out a plan for helping them feel even more engaged. Afterward, she met with each Kronite to review and discuss the plan. As one of her employees noted, “It was a nice add-on to our normal, one-on-one interactions.”

MEI has sometimes prompted managers to work together to improve. A healthy rivalry has cropped up between our sales and professional services organizations as to who can get the most employees to complete the survey. “We turned it into a competition,” a Kronite leader in our services group said. “I don’t care how high or low [our return rate] is, as long as it’s higher than our sales department’s!” Her colleague on our sales team concurred. “If we’re going to be competitive on something, let it be engagement! It’s a big deal here.” As these and other managers have also noticed, MEI has tended to free employees to make more suggestions for process improvement. Because conversations about manager performance are now much more common, employees feel empowered to speak up. “My team feels like it has a voice now,” one manager said, pointing to the many suggestions her team members have made.

All of this effort on the part of managers to improve what they do gets me really excited. From my own career, I know firsthand how easy it is to make mistakes as a manager, and how much learning is required to manage others well. I also know how rewarding it is when you do improve and become more competent.

Back when I was a young manager in my twenties, I worked nonstop, putting in as much as 80 or 90 hours a week. I didn’t have a family yet—Kronos was my life. Because I worked so hard, I used to expect people on my team to do the same. When they didn’t, I became frustrated. One day, I complained to a particular team member that he wasn’t working hard enough. “Aron,” he said, “I’m not you. I don’t want to work as hard as you work.” His tone was firm, but not aggressive or mean. That conversation taught me how important it was for managers to listen to people and respect their needs. If I was going to continue to crack the whip, my team members probably wouldn’t show me much loyalty, and their impression of the company would suffer, too. If I wanted to build a strong, committed team, I would need to treat people more respectfully, paying closer attention to their needs and desires. I would have to do all I could to facilitate and inspire their creativity, so that they could do their best, most innovative work.

I happened to learn this lesson because a particular team member was strong enough to speak up. I wonder how much more quickly I would have learned it if I had a tool like MEI at my disposal to help bring my weaker skills to the surface. How long had I been driving people harder than what was productive? How much better would my team have been performing all along had I been more sensitive to their needs?

Above and beyond the improvement it spurs, MEI delivers an array of other benefits to our organization. For one, it helps attract both recruits and customers to our brand. Our human resources team has begun to use MEI as a selling point to job candidates, helping introduce them to our company culture and its focus on individual improvement and managerial accountability. As human resources team members tell recruits, Kronos feels so strongly about the relationship between managers and employees that the company polls employees twice a year to hear how they feel about it. Given the horror stories people tell about bad managers, who wouldn’t want to work at a company like this?

I’ve also used MEI to communicate the uniqueness of our culture to customers. Customers sometimes seem puzzled at first, wondering why I’d want to talk with them about our managers, much less metrics relating to our managers. As I explain, Kronos sees itself as an ethical company that treats its employees well, and that means building strong managers, which in turn means holding managers accountable. I put the question back to them: if you’re not asking your other vendors about managers and employee engagement, maybe you should. Do you want to do business with someone who treats employees poorly? What kind of experience could you hope to receive from those poorly treated employees?

A GREAT JOB AND A GREAT MANAGER

To date, MEI’s impact on our culture has been astounding. In 2016, 81 percent of employees rated their managers with a “strongly agree” or “agree” on the MEI questions. In 2017, 87 percent of employees rated their managers favorably. In 2016, 78 percent of Kronites rated their managers favorably for the performance feedback they delivered; in 2017, 86 percent did. In 2016, 85 percent of Kronites said their managers truly cared about them as an employee. In 2017, that number was 90 percent. Improvements such as these have gone hand in hand with jumps in employee engagement. During our first year of using this tool in conjunction with our preexisting manager training programs, our employee engagement score rose from 84 out of 100, where it had been stuck for three years, to an 87. Our retention metric (asking the question, “Would you consider leaving Kronos in the next year?”) is now an amazing 88 percent saying no. Our voluntary turnover of strong performers declined by 1 percent, saving us at least $1 million in expenses. Was MEI a good value for our organization? I think so!

MEI Results by Quartile Showing Correlation Between Manager Effectiveness with Engagement and Retention

Our MEI tool was admittedly a bit of an experiment. We suspected it would make a difference but weren’t sure. Now that we’ve had multiple rounds of scores, analyzing our data with the help of scientists at the University of South Carolina’s Darla Moore School of Business, we have established a clear statistical relationship between strong manager behavior and employee engagement.

MEI isn’t perfect. For instance, if a manager with just four direct reports is addressing employee performance issues, even one person who responds negatively will drag down the manager’s overall MEI score. Still, MEI explains a great deal of the variability between highly engaged employees and their less engaged counterparts. Employees with managers in the lowest 25 percent of MEI scores have engagement scores 13 points lower than those with managers in the highest MEI quartile. Their retention levels are also 14 points lower. It isn’t a difference in pay or work conditions that matters most when it comes to engagement—it’s the relationship between employees and their managers.

If you want employees to love where they work, you can’t just focus on them and how they feel. You have to train and coach managers, and you have to hold them accountable. The broader goal, as I’ve suggested, isn’t just to help individual managers, but to create a climate of continuous improvement. We’ve observed a ripple effect regarding manager effectiveness, whereby managers’ MEI scores correlate with those of their direct-report managers. Great managers model behaviors that directly impact how their people manage their own teams. While this mentor-type impact often happens organically, the MEI program amplifies this effect by triggering open, honest, and very pointed conversations about leadership style. As some managers work on improving their skills, the performance of other managers below them improves, too.

With workloads as strenuous as they already are, it’s not easy to get a cadre of managers to work aggressively on their skills. But it’s possible. A few years ago, we had managers say to us, “Wait, I know my business card says ‘manager,’ but you want me to actually manage people?” We don’t get that anymore. Instead, we see managers across Kronos providing sustained, focused, and individually tailored mentorship to their reports. And our entire company has reaped considerable benefit. People might run from bosses they hate, but take it from us, the converse is also true. If you combine a great job with a great manager, you’ve hit the jackpot. Morale improves. People engage. Anything becomes possible.