atkinson advisor

It seems to make sense: engaged employees are more productive and less likely to leave. Productivity and retention lead to superior financial performance. Financial performance leads to greater market share and shareholder value.

HR giant Watson Wyatt has proved it. More importantly, they have proved that employee engagement is a leading indicator of financial success. The company’s research shows that highly engaged employees lead to 22 percent higher market premium and 57 percent greater shareholder return.

Here’s the engagement formula.

The first step is employee commitment, where employees are motivated to help the company succeed. Commitment results from a number of factors, including confidence in the company’s leadership, confidence in the company’s direction, and frequent communications about the company and its direction.

The second step is what Watson Wyatt calls line of sight. As the name implies, line of sight means that employees can see how the work they do every day impacts the company’s success.

The combination of the employee commitment and line of sight results in a powerful formula where employees are motivated to help the company succeed and know what they have to do to ensure that success.

The report is available on the Watson Wyatt website.

We recently read an article about Baby Boomers that contained the following sentence:

“People turning 50 today have more than half of their life ahead of them.”

This far surpasses the current life expectancy estimate of 78 years and has a number of ramifications for society and for business. Here’s just a few off the top of our head:

• How will you manage people who want (and demand) to be employed into their eighties?
• Will people choose to go back to school in their forties and fifties knowing they still have 30 to 40 years of their career ahead of them?
• How will you manage a workforce with six decades of employees?
• Is life expectancy a competitive advantage or competitive disadvantage for your business?

The questions are endless as are the opportunities for companies that get ahead of this tidal wave.

In September, Warren Buffet wrote a memo to his company’s senior leaders in which he lamented some of the scandals facing Corporate America today.

The opening line from that memo – “The five most dangerous words in business may be ‘Everybody else is doing it.’” – has found its way into a number of media stories and onto a number of blogs.

The entire memo should become compulsory reading for executives everywhere.

Buffet’s genius is his obsession with a culture that emphasizes doing the right thing. With 200,000 employees at Berkshire Hathaway nationwide, Buffet recognizes that some employees will err in their ways. At the same time, he fully expects the culture to realize the error, fix the error quickly, and then find ways to prevent a similar error in the future.

The final sentence of the memo says it all.

A shank is one of the worst golf shots imaginable. It’s embarrassing and unsightly.

RadioShack hit the equivalent of a business shank on Aug. 31 when it laid off 400 employees with an e-mail that read: “The work force reduction notification is currently in progress. Unfortunately your position is one that has been eliminated.”

The public reaction was swift and caustic for the struggling company.

A corporate spokesperson explained that employees knew they would learn their fate via the fateful email. Rationalizing the bad decision only made the wound deeper.

Next time you are conducting performance planning with your direct reports, try asking each of them to name three important things they will accomplish next quarter. For every direct report, that adds up to 12 important accomplishments during the year. The sum of their accomplishments will most likely result in important changes for your organization.

Mississippi Power got it right in the aftermath of Hurricane Katrina. The company restored power to 195,000 customers in just 12 days.

Company executives attributed the company’s success to its can-do spirit, clear lines of responsibility, and decentralized decision-making. The relief effort exceeded its own goals in large part because employees knew exactly what to do in the situation. As one employee put it, “If you don’t know what you’re supposed to do, the manual is not going to help now.”

Mississippi Power’s success provides an outstanding framework that any company can use to evaluate its own crisis planning. The USA Today website has an excellent article about the effort and lessons learned.