Brand Engagement

Guilty As Charged: Enterprise Engagement Is About the Bottom Line

guilty as charged

The attack we have been waiting for on the concept of engagement has finally come, after almost seven years. Although the logic and research behind the concept of Enterprise Engagement seems irrefutable to us, a scathing attack comes from U.K. human resources blogger and group HR Director for Penguin Random House, Neil Morrison. In a recent post entitled “The Great Engagement Swindle,” he writes:

“Engagement does not pay the bills. Engagement won’t cover your medical costs when you take a fall. Engagement won’t keep the heating on in retirement. Engagement doesn’t make you happy or even a better lover. Engagement doesn’t even have a standard meaning, definition, or measure. It’s a fabrication. The biggest con about employee engagement? The goal is to drive commercial success, whilst dressing it up as employee welfare. Look at any purveyor of employee engagement services and they will talk about driving business performance.”

He continues,

“Employee engagement doesn’t replace talking to people, caring for people, listening to people. It doesn’t replace paying people well, investing in their benefits and providing a decent pension scheme. Do things right as an organization, treat people well, don’t treat them like fodder and you’ll be surprised how much they’ll do for you.  Not because they are engaged, but because they want to.”

After declaring engagement a myth, Morrison goes on to ask …

“How about we measure leadership engagement instead? How engaged is your leadership team with employees? How well do they know them? When was the last time they had a human-to-human conversation with someone in the organization they didn’t know.”

He concludes:

“Employee engagement is the classic example of human resources forgetting about humans and focusing on resources. Its bad mumbo-jumbo dressed up as science. Employee engagement is an idea that’s long overstayed its welcome. Let’s kill this vacuous, malevolent concept once and for all.”

 

What do we have to say to this? Guilty as charged.

A primary purpose of capitalism is to create wealth, and anyone who has ever invested their own money into anything knows that without the ability to create wealth, there’s no ability to do other satisfying things, such as pay people well, cover their medical costs, create a fulfilling work environment, and provide for a good pension. The primary purpose of Enterprise Engagement is to promote financial success by fostering the proactive involvement of all customers, distribution partners, employees and vendors who can contribute to success (yes, there is a clear definition for engagement), and this doesn’t happen simply because the company principal or board are nice people and care about people. It requires ongoing discipline to make sure that the organization has a clear brand proposition that benefits everyone and that everyone understands; goals that everyone believes in and have the capability to achieve; processes for making sure that all employees feel empowered to contribute and to ensure that management at every level not only understands the brand but does all of the good things Morrison advocates that managers should do. None of the above just happens.

Morrison is right: Enterprise Engagement isn’t about making employees happy, because happiness in and of itself doesn’t contribute to performance. Linking engagement to results requires creating a culture in which each person knows how he or she can contribute to success and has a clear sense of the intrinsic and extrinsic rewards for doing so. He says that if you treat people right you’ll be surprised how much they’ll do for you – not because they’re engaged, but because they want to. This to me is just another way of saying the same thing: Give people clear goals, create the right culture with the right leadership, support, and rewards, and, yes, people will be more likely to do what is asked, no matter what you call the motive. I wholeheartedly agree that leadership at all levels has to be assessed to ensure they’re creating a positive, focused work environment, but that alone isn’t enough to address all of the levers of engagement.

In his post, Morrison, who has over 20 years of experience in human resources, appears to state that big companies can just “be nice” and everything else will fall into place. If so, he fails to recognize that engagement efforts, unlike advertising and other marketing/management processes, cannot be faked, since employees are the first to know when management really couldn’t care less. Great companies work hard at creating cultures that not only engage people, but equip them in every way to contribute to success, both for the organization and their personal careers. Were it only as easy as Morrison implies.

Fundamentally, what he overlooks is the virtuous circle of Enterprise Engagement: Business performs better financially, the brand has greater equity because customers are more loyal, employees are happier in their work with better management and greater pride in their work. Almost all U.S. companies that focus on engagement provide pay and benefits well above those of their competitors, and shareholders are happier as well, as organizations such as Value Line, Invesco, and Blackrock are beginning to look at engagement indices when evaluating companies. It took years to convince investors, but Costco no longer has to staunchly defend its commitment to providing employees with pay and benefits well above those of its main competitor, Walmart.

Why does this matter? Because when investors begin to realize that the level of an organization’s engagement is a key predictor of share price performance, and that engagement efforts can actually be profit centers, they will begin to insist that executives address the issue and will eventually punish those that don’t, encouraging more companies to take the path of Costco rather than Walmart.

That sounds like a virtuous circle to us.

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