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Is Recognition Ready to Hit the Re-set Button?

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Over the last few weeks, two of the leading U.S. recognition firms, Achievers and TharpeRobbins, have appointed as CEOs human resources veterans who both recently held top management positions at Kenexa, a large human capital management firm now owned by IBM. Is this a coincidence? Achievers is primarily owned by Sequoia Capital, one of the world’s leading venture capital companies, and TharpeRobbins by Gridiron Capital, a venerable mid-cap private equity company. Presumably, these appointments are part of strategies to hasten the growth of these companies by bringing in fresh insight and leadership from people with extensive experience in the human resources marketplace but not specifically from within the recognition field itself.

While we know nothing about the reasoning behind these selections or the people chosen, from a conceptual perspective the timing was right. The recognition field is long over due for fundamental change in the new era of Enterprise Engagement and internal branding. The recognition field was born in the late 19th and early 20th century as increasing numbers of companies began to recognize employees for length of service and other achievements. Most of the leading recognition players had nothing to do with performance improvement, Enterprise Engagement, or internal branding; they provided clocks, watches, pens, jewelry and (much later) gift cards and vouchers for such milestones. As a result, as the recognition field matured in the later 20th century, the focus was on the process and importance of recognizing people, the rewards and the means of presentation. In the 21st century, leading recognition firms published books emphasizing the importance of recognition and created training programs that helped clients educate their managers on how to give out more recognition. One of these companies, GloboForce, has even attempted to go public. Most recently, the focus has been on technology as a means to scale by powering ways to make it even easier for people to provide recognition and for companies to measure the activities. All of this made perfect sense, because this is what companies wanted to buy.

Why is this focus on recognition vulnerable in the era of Enterprise Engagement? Because recognition is in fact only one of the levers of engagement, no more or no less important than the other levers, which include a clear mission and goals; assessment; all forms of communication; innovation and collaboration; return-on-investment; measurement; etc. Why should companies pay recognition firms to train their managers to recognize employees when the real opportunity is to align employee behaviors with tactical and strategic goals that have a bottom-line benefit to the organization? It takes more than recognition to do that, and to place the emphasis on recognition puts the cart before the horse. The opportunity for large companies especially is to fund truly performance-oriented engagement strategies with at least some of the dollars allocated to traditional recognition, but with the new focus on drawing upon all of the levers of engagement that translate into measurable performance and retention.

If Gallup is right, American businesses, not-for-profit organizations and government are wasting close to half a trillion dollars as a result of disengagement, a large portion of the losses probably measured by unnecessary customer and employee turnover and higher marketing and operations costs. Imagine the business opportunities for those companies who understand how to help organizations address this waste in a measurable way? Recognition companies have a unique opportunity to tap this opportunity, because they have the relationships. The question is: Does their top management see the sea-change underway? Do their account executives and planning teams have the knowledge and experience? Do their business models permit them to move toward the zero-based approach to employee engagement that is required to achieve true bottom line results in a sustainable way? How long before newcomers who understand how to integrate all of the levers of engagement nudge those who fail to adapt out of the marketplace? Since we have already witnessed traditional recognition firms lose out to employee engagement newcomers at major companies, we know it can happen.

It is often difficult for traditional companies in fields under transformation to adjust – throughout history they are inevitably replaced by newcomers. But the appointments by Achievers and TharpeRobbins demonstrate, in theory at least, that this doesn’t have to be.

 


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