INTRODUCTION

I’ve spent my career working at Kronos^® Incorporated, the Massachusetts-based, billion-dollar global software firm founded in 1977 by my brother Mark. You might not have heard of us, but chances are we’re touching your daily life.

Our initial product was the first microprocessor-based time clock, a device that recorded, totaled, and reported employee hours. Since then, we’ve continued to build time clocks—we’ve shipped over 1 million of them and counting. But over the years, as technology and industries have evolved, we’ve introduced a variety of sophisticated cloud workforce management and human capital management software applications that have shaped the way organizations the world over do business.

Today, under the banner Workforce Innovation That Works™, approximately 5,500 Kronos employees—or “Kronites,” as we call ourselves—around the world create, sell, and service software that helps organizations track the time their employees work to ensure that everyone is paid properly; that employees are scheduled based on skills, preferences, seniority, availability, and historic business data; and that organizations are better able to comply with complex labor regulations. Our products also help organizations hire employees, track their performance, run payroll, and perform many other workforce-related tasks. We believe that great businesses are powered by great people, and that to be a great business you need to create and manage an engaged workforce. We build our software for our customers’ industries and employees with employee engagement firmly
in mind.

Kronos customers include some of the world’s largest and most respected brands. All told, more than 35,000 organizations across over 100 countries—including more than half of the Fortune 1000 and thousands of hospitals, universities, and government agencies—use our products to drive better business outcomes in every imaginable industry. More than 40 million people use a Kronos solution every single day!

I’m inspired by what we do—and I’ve been at it for a while. I joined Kronos in 1979 right out of college, doing everything from selling our time clocks to stopping by the office at 2 a.m. when the security alarm went off. I worked my way up from there, playing leadership roles in nearly every functional group. As my career progressed and I moved into management, I came to develop what I sensed was a fairly unique philosophy, one built around the singular importance of employees. Lots of executives claim to put employees first, but when I became our company’s CEO in 2005, I had a chance to put my philosophy to the test.

We had gone public in 1992, opened many offices in the United States, established a presence in countries such as Australia, Canada, Mexico, and the United Kingdom, and achieved $500 million in annual revenues. Behind the scenes, we had done our best to treat people right, offering competitive salaries and benefits to acquire the best talent. By most any standard, we were a really good company. But I thought we had the potential to become even better, and also significantly bigger. I wanted us to grow our revenues to $1 billion and to enter new international markets. I felt that we could achieve such ambitious goals, but we needed to make some big changes. In 2007, we took the company private, a move that I thought would free us to focus on our longer-term vision and would free me up personally to devote more of my time to core parts of our business. In the wake of that move, and as I found my footing as a CEO, I began to concentrate more on our people, treating them according to what I believed them to be: a powerful strategic weapon, one that Kronos hadn’t yet fully leveraged.

As great as our employees were, we hadn’t prioritized the development of our workforce as a key part of our growth strategy. As a result, although our employee engagement scores were above the norm in our industry, we had trouble attracting and retaining the best people. In some parts of our business, our annual employee turnover topped 40 percent. Although people seemed to like working at Kronos and although we had a number of longtime employees, employees didn’t love Kronos, and they didn’t see our organization as a unique and extraordinary place to build a career. That’s what we changed—and it’s what this book is about.

As a new CEO, I felt that we couldn’t continue to create great products or deliver great services without attracting and retaining great people. But that, in turn, would require that we become a better place to work, giving our employees more of what they wanted out of an employer. We needed to revamp and expand our human resources function, which at the time lacked foundational processes and technology, not to mention a strong focus and understanding of best practices. Little by little, we would have to work on our culture, making it more caring, trusting, transparent, collaborative, and innovative.

How would we pull this off? I didn’t have all of the answers. In fact, I had very few of them. As a manager and leader, I’d always taken personal satisfaction in creating environments in which people felt motivated to excel. I’d been fortunate enough to be raised by parents who modeled values like caring, honest communication, and trust, so I was inclined as a CEO to build a culture infused with those values. But beyond that, I didn’t yet understand what it would take to institutionalize a great culture and create an organization that, from top to bottom, was a wonderful place to work. What I had at my disposal was primarily a strong drive to treat people well and get the most out of our workforce. The media often celebrated companies that were “great places to work,” but what was so special about those other companies? What did they do that we weren’t doing? Why couldn’t we be one of them?

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Our drive to institutionalize a great culture got a boost in 2010 when we hired a seasoned executive with a strong quantitative background as our chief people officer. Many organizations marginalize the human resources function, but soon thereafter we appointed our chief people officer to our executive committee, making it clear that I personally backed what we were doing to create an inspiring and innovative culture. We then took a series of experimental steps to enhance our culture and become a truly unique place to build a career. We did this, to be clear, not because I wanted Kronos to be “nice” to people—which of course I did—but because I was convinced that focusing on people and culture was the soundest possible business strategy.

We had been collecting data on employee engagement for some time, but it had largely been a “check the box” kind of exercise. Now we began to work with engagement more intensively. We performed a quantitative and qualitative analysis of the main drivers of engagement, identifying development and innovation as the biggest factors—and after further refinement, we discovered that manager effectiveness and a feeling of connectedness to the company’s mission and strategy were also critical. Then we took action around those drivers to better allow us to attract, develop, manage, and retain top talent. We rolled out a slew of new programs, processes, and benefits that our people wanted, branding them so employees around the world understood and valued them. We defined and branded our culture itself, calling it WorkInspired and linking it to three core competencies: character, competence, and collaboration. We’ve since tied these competencies to our business strategy, leadership, performance goals, competency assessments, selection practices, reward and recognition programs, and merit and incentive programs and processes. We called our culture WorkInspired because we think of our company as a partnership built on inspiration: we provide an inspiring place to work, and we ask that employees perform their work tasks in an inspired way as well.

Building on this foundation, we’ve focused on the role of managers. I believe it’s a privilege to manage people, and I also know that people might join an organization for its reputation or the compensation they receive, but they often leave it because of their managers. We’ve instituted a manager training program and delivered the curricula to all of our people managers. We’ve also created a new metric of manager effectiveness and begun to track managers’ improvement efforts across the organization.

As I’ve long believed, boosting engagement and building a strong culture isn’t just a matter of policies and procedures. It’s about behavior. Most important, it’s about how leaders behave, starting with me. I’ve always tried to take responsibility for my teams, injecting values I hold dear, such as compassion, trust, and transparency. But as I’ve gained more confidence and clarity in my role as CEO, and as we’ve focused on our culture, I now act on my values with a new awareness and sense of purpose. I try to overcommunicate, modeling transparency and trust for other managers and employees to follow. I try to take care of our people and help them feel safe. I try to engage with them in ways that will welcome them in and inspire their best work, conveying my own passion for our business and organization. I show up every day mindful of my responsibility as our culture’s chief caretaker, promoter, and voice.

Our embrace of a strong people-strategy has paid off. Employee engagement has soared, with 87 percent of employees now reporting strong engagement, far above the global IT industry norm of 68 percent. The overwhelming majority of our employees feel they are given a real opportunity to improve skills (76 percent), that they are encouraged to innovate (80 percent), and that their leader—I—would keep us competing successfully (84 percent).

Our employee retention has soared, too, as has our reputation as an employer. In 2014, the Boston Globe named us the top large employer in the state of Massachusetts—yes, we had finally become that company! I’ll never forget the day I found out. The organizers asked me to keep it quiet, and I just couldn’t. I mean—are you kidding me, after all the work we’d put in? And best of all, since the award was based on employee opinions, we had won it because our people regarded us highly. I happened to be at a sales kickoff meeting that day, standing on a stage in front of 1,200-plus Kronites, and I let news of the award slip. Kronites were as excited as I was, erupting in applause.

We have since received many other honors, in some cases for multiple years running. Great Place to Work certified us as a top workplace nationally; Glassdoor honored us with its Employees’ Choice award, recognizing the 100 Best Places to Work across all U.S. companies; and Fortune magazine named us one of its 100 Best Companies to Work For. We have also appeared on the Forbes list of America’s Best Employers and on regional lists in Australia, Canada, China, India, and the United Kingdom.

All of this attention has sent talent surging to our doors, with applicants for open jobs rising from 32,000 in 2012 to 70,000 in 2017. As I anticipated, our talent strategy has indeed propelled our business forward. In 2014, the same year we were named best employer in our home state, we topped $1 billion in revenues, and as of 2018 we were at $1.4 billion. We have increased our revenues every year since 2009. In fact, combined with our performance before I became CEO, we’ve seen annual revenue growth in 19 out of the past 20 years (the exception was 2009, during the global financial crisis). And our overall value generation has been enormous, bringing exceptional investment returns for our shareholders, with the root of our value creation being our unique and engaging culture.

Beyond our top- and bottom-line growth, we have successfully completed a major, multiyear business transformation, changing from a licensed-software model to a cloud, software-as-a-service (SaaS) model—a feat that some in our industry claimed no company our size could ever pull off without seeing revenue and profit declines. As of 2018, almost all of our new customers were joining us in the Kronos Cloud. We continued to innovate at a furious pace, spending over $150 million annually on research and development, improving our industry-leading, award-winning product suites. We also introduced a pathbreaking product into the market unlike anything our industry had ever seen.

Fostering employee engagement has helped us in no small part because it has enabled us to forge stronger relationships with customers. Consider a brief example. In 2015, we suffered through one of the worst product launches in our history. A new version of our flagship product worked well for most customers, but a small number of them experienced problems. It was 100 percent our fault. In handling our customers’ complaints, we applied the same practice of transparent communication that we deploy in our culture to build employee engagement. Other executives and I personally met with customers and took responsibility for the problems. “It’s our fault,” we told them, and we took steps to make it right. Was it easy to own up to our shortcomings? Absolutely not. But customers wrote us back after these meetings to tell us how surprising it was and what a difference it made that we were taking responsibility. As a result of our response, we strengthened relationships with many customers, turning what would normally be a highly negative situation to our benefit. Meanwhile, many of our employees felt inspired seeing us behave so honestly. “This is why I love working at Kronos,” some of them told me. Even amidst the turmoil of the botched launch, their connections with our company, our leadership, and our customers deepened. Their engagement increased.

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What’s been most astonishing to me about our success in recent years is not so much that it happened, but how simple the underlying strategy has been at its core. Taking care of people first—so they can in turn delight our customers and boost our sales—isn’t rocket science. Any company or team can do it. And yet, to my amazement, so few companies and teams actually do! Without realizing it, perhaps, leaders and managers neglect the very people who help make their businesses successful. They sometimes dismiss human resources deliverables as “soft stuff,” rather than regarding the human resources department strategically. They pay lip service to culture, but don’t invest time or money in cultivating it. They talk about values, but don’t “walk the talk” themselves. Why is this? I just don’t get it.

We need to stop taking employees for granted. Engaged employees lead to more innovative products and happier customers, which leads to stronger performance. That holds no matter your industry, and whether you’re a manager overseeing a team of five or a leader running an organization of 500,000. It isn’t just customers who become happier when you prioritize employee engagement, but potentially every stakeholder with whom your company interacts. At Kronos, we apply the precepts of our culture to our business ecosystem, including customers, vendors, resellers, partners, companies we acquire, even our competitors. As we nurture strong relationships of trust and transparency with our ecosystem, we empower everyone to do their very best. That in turn allows us to become more successful. We now have stakeholders turning to us for advice not just on our products, but on human resources issues. Specifically, many customers have asked us to talk to their leadership teams about our culture and how to increase engagement. Remember, we’re not an HR consultancy, but a software company!

I’ve written this book to inspire leaders and managers to build cultures of their own in which people love to work, and to provide them with some insights and tools to get started. Each chapter presents a principle that we’ve deployed to nurture engagement and help people “work inspired.” These principles—most of which are pieces of wisdom I have discovered during my career—cover a lot of ground. They include communicating with employees so they feel safe and valued; showing respect for local cultures across geographies; fostering innovation; empowering employees to take care of their families; and helping employees behave authentically and have fun at work. These principles don’t constitute definitive answers or formulas for engagement, but I’m confident that they will help guide as you move toward caring for your people better and motivating them more than ever.

If you don’t have time for a lengthy read, no problem—I’ve organized the book so that you can consult each chapter independently. These chapters rely primarily on stories and examples from inside our company to illustrate my points, large and small. I also discuss an array of programs and policies we’ve created to build engagement and galvanize our workforce, and I focus on the leadership behaviors that inspire people to love where they work and perform at their best. I strongly believe that what we as leaders and managers do each day counts as much as policies and procedures. Each of us must take responsibility for safeguarding the culture, one personal interaction, e-mail, or public gesture at a time. If we do, we set a process in motion that, over time, instills values and practices throughout the organization.

There are no shortcuts to building a workplace environment that people love. It takes time, energy, and focus. If you’re like me, you’ll make mistakes along the way—plenty of them. Also, as much as you try, you’ll never get it perfect. One of our employees wrote of having the “best job ever” on the website Glassdoor but also acknowledged that “every company has some warts.”¹ That’s very true! The important thing, though, is to commit yourself to taking this journey with your team or organization. What might your business look like if your employees felt proud of your company, loved what they did, and regarded the organization’s mission and values as their own? What might it look like if your people trusted one another and looked out for one another, if everyone at all levels felt inspired to innovate every day, and if your midlevel managers empowered every employee to develop and make the most of his or her career? All this and more is possible. Do what we did: focus on your people. This book shows you how.