Derek Irvine, co-author with Eric Mosely, of WINNING WITH A CULTURE OF RECOGNITION: Recognition Strategies at the World's Most Admired Companies and head of client strategy and consulting for Globoforce is our joined the show recently. You can listen here.
Winning with a Culture of Recognition, takes an in-depth look at this question and provide hands-on steps to help any employer create a culture fostered by strategic recognition, a management practice as different from the old "rewards programs" as Six Sigma is from last century's "quality control."
I loved this book. It’s well-written, well-organized and includes great examples, great data, immediately doable steps to create a culture of recognition. And get those above average profits, growth rates and equity valuations that are your rewards for building that culture.
I read a lot about this issue. And this book taught me a lot more. So, did our conversation.
Derek, thanks for taking the time to be on the show!
You’re welcome Zane. Thank you for the compliments on the book.
Tell us about this book. What inspired you and your co-author, Eric Mosley, who’s also the CEO for Globoforce to write this book?
Our biggest inspiration are our clients. We probably have some of the greatest clients you could work with. I’ve worked in management consulting for many years before coming here.
It’s been working with those clients and trying to help them do something before around this topic of employee engagement. To tackle that terrible statistic you mentioned at the beginning of the show, that only 25 - 30 % of employees are engaged. There are so many employees out there who are not engaged.
So working with clients for the past 10 years, we developed what’s really a fast-track for tackling that problem to see very dramatic improvements for our clients.
It was our clients. We thought about it for years and years and then eventually we wrote the book.
My friend Erika Andersen coined a great phrase in her book, Being Strategic. The phrase is reasonable aspiration or hoped-for future. What was your reasonable aspiration or hoped-for future for writing this book?
You said at the outset that the book is about culture management. So our hoped-for future is we’re showing business leaders how culture can in fact be managed.
It’s our belief, Eric's and mine, that there’s really a source of competitive intelligence that remains untapped out there. Companies have spent so much money over the years standardizing their processes, lowering costs, generating savings to survive the Great Recession. We’ve sorta started benchmarking ourselves so we look alike in HR processes or streamlining workflow.
It’s your people that can make your company really unique, something that could differentiate you in the marketplace.
But companies tend to struggle with managing that culture. Can’t companies just naturally evolve? The grandiose statements companies make about the kind of culture they would like to have. But they don’t really have a way to live that culture, or grow it in the way they would like to.
We wanted our book to show companies how they can grow that culture and generate the goodwill that’s possible from a culture of recognition.
That could become an engine that could create the type of culture that could win in the marketplace.
What metrics are you tracking to show you have reached it?
That’s definitely one of the exciting things about strategic recognition is that we’re all about metrics at the end of the day. If you’re aiming to live the corporate values, and say one of the values you’re aiming to live is about innovation, our approach allows what’s almost like a corporate x-ray to show how well you’re living that value.
- How well are we living it?
- Who’s being recognized for innovation?
- What groups are power-centers and doing particularly well on this value.
So, the type of metrics that really drive whether we’re achieving success or not are metrics around that x-ray effect of what are the values today and are we moving in the right direction?
Who was your audience? Describe the person you wrote this book for.
We wrote this book for senior managers and business leaders and people who head up HR functions. There’s a lot of books out there on employee recognition. But, there’s a particular genre of books with ways to motivate employees, but they don’t really tend to speak to senior management or CEOs or Chief People Officer. The ideas in those, 100 ways to motivate your employees, they tend to be somewhat quirky creative, fun, gameful things. And the problem is if you’re managing a company with 100 employees or 100,000 employees, those ideas are really difficult to scale and put into practice at a mass level.
That’s really who we wrote the book for. For senior management, we wrote the book to say “Here’s an approach which can be strategic, robust and rigorous” and therefore we’re speaking to senior managers in a language they can understand.
That’s great. You hit on the source for fundamental disconnect in a culture of recognition as a company grows past 50 to 100 employees you lose those personal connections. And you lose the ability to maintain them informally.
Individual creativity managers can be great. But to replicate that and scale it is a fundamental challenge for any company.
Why do they need to read it? What's their hoped-for future after reading it?
Leaders will see that they now have a way to manage their culture and they’ll see how their culture can help them win in the marketplace. They’ll see how recognition can be taken from a soft, fluffy approach to a hard data-driven management approach that’s right up there with other approaches that management sees like Six-Sigma.
In the book, they’ll see evidence for proven ways that we’ve been delivering double-digit improvement in employee engagement, often very quickly. 6 months.
They’ll see a robust approach to manage culture and deliver employee engagement fast.
Your book starts off with an imagined conversation in a corporate boardroom. While it's imagined, I'm sure it's happened with your clients, why they contacted you. But the part that caught my eye was how you brought up innovation and its impact from employee recognition. What's the relationship between employee recognition and innovation?
It’s a conversation we hear all the time.
It’s a truism of human nature, generally speaking, that what gets celebrated and encouraged gets repeated. So, whether it’s innovation or customer-focus as a company value you’re seeking to see more of, recognizing it when it happens is one of the most powerful ways to unleash an energy amongst your employees about that topic.
So simply recognition around innovation you end up seeing more of it, by building your recognition program around those themes, innovation or customer-focus, whatever’s really important to the company and asking your employees to stop and celebrate it. We end up with a mass-mobilization, attention around that topic at the same time employees are celebrating and recognizing these things they are at the same time without realizing it, becoming much more informed about what is company strategy and they’re becoming more informed about what is their role in impacting that strategy.
Recognition is a great way to encourage innovation or any corporate initiative going on.
We once were the leading nation for innovation. We're somewhere north of being rated 15th now, maybe 11th. Would that correlate to a similar ranking among nations for how we recognize our key stakeholders: employees?
That’s an interesting one.
I would rank the US probably in the top 1 or 2 countries for recognizing employees. Now don’t get me wrong. This doesn’t say there isn’t a tremendous room for improvement.
The problem is that most of the recognition is still in that soft creative way of 100 ways to recognize your employees. It’s that soft, pizza-balloon party type of thing.
We’re seeing with our clients a desire to move on beyond that type of thing. They're telling us:
“We’re spending a ton of money on the soft stuff. But we’re not sure what ROI we’re getting.”
What we see are more clients who desire to build on that thing and turn it into something more strategic and across the company. It’s much more integral to the company’s culture and how they win in the marketplace. That’s new.
And, that’s not what we see happening in the marketplace to any extent to what it needs to be.
If we could get this working as well as it could be then we could get employees engaged and start moving up on those other tables.
That opening hypothetical conversation ended happily. Data is clear, it's transparently shared. Everyone embraces it. A meeting follows with the CEO who’s already committed to fix that situation.
But this hypothetical is not how it works, is it? Where's the most common breakdown in that ideal conversation? Where and how does reality intrude and interfere?
You’re absolutely right. It doesn’t work unless the senior team is on board. That’s why one of the key tenets we talk about in our book is the need for executive sponsorship. And a strong sponsorship at that. They really have to be on board with how they’re going to get that win.
Old-school recognition was often managed way down the structure. Traditional recognition was much more tactical.
Our experience is when you go into the executive suite and you share the results that are possible, then you get a good reception with that audience. You get that reaction because CEO’s know that values are a really important thing for holding a company together and getting to the point they want to get to.
What they lack is the ability to see those values and how they’re lived on a day-to-day basis and how to encourage those values be lived on a day-to-day basis.
That’s where strategic recognition comes in. It can be the lever that CEO can use to encourage the values they want to incorporate.
So, once we get that idea established then CEO sponsorship comes pretty quickly.
An earlier guest on the show Stefan Swanepoel talked about how the founder, the CEO, and the C-suite guys have to have heart. Employee recognition comes down to that: Heart. Do you care? Do you remember? Do you recognize? Why does it appear that executives seem to be encouraged to leave their heart at the door, outside the C-Suite?
How does your book help get it an invitation?
That’s a good question. I’m sure both physically and emotionally they have both in the C-Suite. We all know that.
One of the problems we have with working with clients is that the traditional approach to working with recognition suffers from the tendency for it to fall down towards the bottom of the to-do list. It’s not that senior management don't want to recognize. It’s simply that they postpone recognition or it slips off their agenda with so many important tasks to do on any given day. It’s so easy to put off the recognition task.
The problem is that if it’s happening at the C-suite level, then of course the rest of the organization takes its cue from that and suddenly it’s postponed and forgot throughout the organization.
So, that’s why in our approach to strategic recognition measurement is key. We often say to clients:
“Never underestimate the power of a metric to signal to an organization that something is important.”
So, if you go about your recognition program with a measurement and without metrics it’s going to fail. They won’t be everything they could be.
That’s why in strategic recognition we absolutely measure, we dashboard, and that’s how we talk in a language that senior management can get their heads around. They know that this recognition is going to be measured and it’s going to be done.
The next question sounds silly as the answer's so obvious. But so few companies seem to answer it correctly. Why do you consider employee recognition a strategic initiative? That puts it at or near the top of a company's top initiatives. So, why should employee recognition be a top strategic priority?
And it’s an important distinction you’re bringing out: the difference between tactical recognition and it’s a program and one year it’s blue, one year it’s red and the changes clash.
Strategic recognition we really see as a new management process. It’s really changing the way we do things around here for winning in the marketplace. Therefor it becomes strategic in itself because it is now a new process to manage.
But it also becomes strategic because of the results it delivers. There are two types of results we’re seeing. First result we’re seeing is double-digit increase in employee engagement in months. Literally, in 6 months it’s not unusual for us to expect anywhere from a 10% to 25% improvement in employee engagement scores. And that’s huge. The impact from that can be huge.
Second result we’re seeing is the ability to have an x-ray effect on culture. How is your culture being lived today? I can’t imagine having any CEO, except the ones we’re working with, who wouldn’t be interested in getting that type of visibility. And that’s why it becomes strategic, too.
You list Five Tenets of Strategic Recognition. What are they? Why are they important? Is there one tenet where companies to be strongest at executing?
We list these 5 tenets to give both an action list and a shopping list to do.
It’s starts off with number one of being very clear about your strategy and making it universal. There’s nothing worse than having a whole array of disparate, multiple recognition programs going on throughout the company. Finance is doing one thing, marketing is doing another or they have a different program in Canada than in the UK. So, pull these programs together into an universal strategy. It gives a single voice behind your recognition program.
The second thing is give your recognition program executive sponsorship and we’ve already spoken about that.
The third element is alignment with corporate values. It’s all about aligning and building your program with something really important in your company. Now, in many instances that is the corporate value. But, in some cases it might be some strategic initiative that’s underway or a strategy platform that the CEO is interested in communicating and cares about.
Fourth element is the opportunity for all to participate. And this is really important one for us, too. People often ask us:
“How many people should we recognize in this strategic program?”
And I say :
Well, if it's the value that they lived then you should recognize as many as you can.”
And many leaders struggle with this. They think that you should focus on only the elite; the top 5% should be recognized.
But, in my experience these top 5% are waking up every morning all ready, they’re motivated. They’re good to go. They’re strong leaders already.
So, unless you’re reaching out and recognizing a full 60 - 80% of your employees, that’s 60-80% of your employees being involved, actively involved, in your recognition program, then you just don’t get the mass mobilization of employee attention on the topic.
The final tenet is the power of individual choice. And that’s when the employee does get recognized that they can choose what’s important for them as a reward.
Number 5 is the Power of Individual Choice. What is that power? Why is individual choice important? Why is it not a door to chaos in your HR programs?
A lot of recognition programs tend to be very focused on the stuff, the prize item. Should it be a flat-screen TV or an iPad? Candidly, that’s a sales incentive approach, where everything is about the prize.
We think that’s totally wrong in employee recognition. That’s basically reflecting what the merchandise company has a deal on that month. Therefore, let’s make the prize item be that.
We prefer to turn the model on its head and focus first on the praise and then the prize. Let’s get the recognition happening first. And yes, the employee gets to pick a prize that they find motivational.
The reason for that is employees today reflect a diverse array of ages, generations and even now geographies. So, I would say it’s actually even more of a nightmare if they DON'T offer the choice. HR will be inundated with complaints about colors and sizes...you create a nightmare.
That’s why Globoforce has over the last decade has built the world’s largest platform, over 25,000 items, a vast choice of items people will be able to decide themselves.
Your clients bring you in when they recognize the need for employee recognition or their current programs are not working so well. You work with larger corporate clients, global clients. Employee recognition must be a huge challenge at their size. I have this impression, maybe cynical, that their interest may be like my interest in eating beets. I'm told it's good, but I won't eat it unless I'm forced to. How do you get around that obstacle of lip-service at the boardroom/executive level?
I would say it’s all about results. We’re a results focused company. We come prepared to take on that topic by sharing real hard results we’ve seen. They appreciate when we can share real case studies.
The book is not about theory or what we’d like to see in the future. It’s a hard case study of things we have done in the past. And the results we have generated.
So, when we take it from that approach it tends to eliminate a fair degree of that initial cynicism.
Can you share with us an example of one of these hard case studies?
One client where we did this and we also share speaking platforms with is Symantec and spoken about their programs with us.
You all know Symantec from their Norton Antivirus products. Over 18,000 employees worldwide. And they were a company that grew very rapidly with acquisitions. They came to us having identified a problem with their culture. They had a portfolio of cultures, sort of a hang over of cultures they had aquired from the various acquisitions over the years. Their goals when they came to us was:
“Look we need to do something about this; we need to create an unifying, one Symantec culture.”
And we showed them case studies and peer-to-peer things we had done how recognition could help with that goal.
Of course there was a degree of faith when you’re launching your own program. But, I can tell you that after just just 6 months we saw employee engagement jump by 14%. And that was on top of an engagement score that was pretty high. And the key culture metrics for Symantec’s culture also improved quite dramatically. the program Director got a call while she was driving to work by Symantec’s CEO to say how pleased he was at how quickly the results were showing.
That’s an example of what we’re typically finding with our clients.
You have a section throughout your book called Myth Busters. I loved it. Love the content in each one, loved how you inserted one in each chapter, almost as a technique to snap a reader out of their internal dialogue that may surface and serve to resist your message.
What was the biggest myth you burst?
For me, my biggest myth is the annual review and the performance appraisal. You have to ask yourself:
"Are we for real here in the corporate world if we’re expecting feedback to occur only once a year."
The workplace is a feedback starved place. That’s why we call strategic recognition the 365 day performance recognition because it can happen at any time, come from any direction and because the recognition can come quite close to the event you want to to talk about, to celebrate.
Strategic recognition becomes a 365-day performance review.
Who are the stakeholders in creating this recognition-starved environment?
I don’t want to really point any fingers in this infrastructure. But, frankly, our clients see this gap. And it’s not that we’re tying to get them to abandon the annual review or performance appraisal completely. That’s not the case at all.
What we encourage with our clients is to see the gap, what’s happening the rest of the year, to place recognition right at the core of the performance appraisal system. You still have annual reviews, quarterly reviews, goal-setting.
The glue, the weaving, that holds them all together is the 365-day strategic recognition.
Those myths, collectively, create the disconnect, the disengagement in today's workforce. You wrote that 56% of managers think they recognize their employees and something like 23% of employees feel recognized. Recognition is the clutch, if you will, for the engine that drives a company's most valuable asset: employees. Why do managers fail to engage that clutch? Yes, that's a terrible metaphor, but still it works.
You’re right. There is a disconnect between what managers think and what employees think about recognition. Managers think they’re doing it much more often than in reality they are.
That’s a rich opportunity to put the clutch in and engage the corporation.
You talk a lot in your book about making heroes. You share quotes and examples from other writes and leaders about that step. What's your favorite case-study of a company that systematically found and celebrated heroes in their midst?
The whole concept of heroes is an interesting one. I also ask:
“Who is it we’re expecting to also spot those heroes?”
There’s a traditional approach, a command - and-control approach, where it’s thought that only managers should identify the heroes and only a few should be heroes in any company.
And, I think that’s been the approach of traditional recognition.
But, when you read about it in the book, strategic recognition says it should be everyone. You should make the winner’s circle a much wider winner’s circle. And:
"Why should just the top 5% be recognized when I’m in customer service or finance and there are things I’m achieving every day that are important?"
We feel it’s a really important distinction of how we’re selecting heroes. And it’s not productive in our view to do it the old school way, recognizing the elite. It’s much better to have a wider circle created. It’s much more powerful.
What are three things our listeners can do to create their culture of heroes?
Its interesting in this world of social networking when you think about how powerful an area that has become, when you think about the wisdom of the crowds, power-sellers on eBay...we have this whole wisdom of the crowds. That’s something you can encourage your whole company to do, open up to strategic recognition. Companies could start encouraging their employees to speak out, to find the heroes, to celebrate the successes.
And in that way you create a much wider circle of winners much quicker.
It’s a habit that needs to be formed in workplaces where that recognition hasn’t been practiced. And it becomes a very powerful resource.
I've read where as the economy improves...a lot of companies will see the power of the 3rd party, the marketplace, in this conversation. Have you seen signs of that shift in power, yet?
I think during the latter part of the Great Recession people were holding tight. Any job is better than none. I think we’re seeing pent-up energy. Research shows there are larger numbers of employees looking at that exit door, right now, than has ever been the case.
Many employees feel overwhelmed, overloaded and work, quite candidly where recognizing and supporting them was absent.
We had clients who kept their recognition budgets table or even increased them. Recognition doesn’t cost a lot of money to give extra recognition. But it’s been a huge difference in reaching out to employees and giving them emotional strength and encouraging employees during the tough times.
I’m pretty sure the clients we’ve been working with won’t see an unusual rush to the door. But, I think in many others that’s for sure going to be a reality.
John Hagel and John Seeley Brown co-authored a great book: The Power of Pull: How small moves smartly made can set big things in motion. Your book seems to reflect that title: small moves, smartly made, setting big things in motion. Their research for this book and The Shift Index found that public companies since 1965 have generated a negative ROA of 75%. (link)
If employees are a company's greatest asset as Peter Drucker wrote and as we all know from our own experience....it seems the the failure to recognize employees has generated a huge financial impact, too. Can a culture of recognition reverse this trend? Where else on a company’s P&L or Balance sheet would we see the results of building a culture of recognition?
We’ve mentioned a few of the metrics already. But if I were to ask your listening audience what would a 2% improvement in increase mean in your operating profit.
Well, Towers-Perrin in their research has shown that a 15% improvement in employee engagement would result in that 2% increase in your operating profit.
We’ve been mentioned earlier that this is not a future thing, this is not a hoped-for thing. Our book is about we have done this. We have delivered to our clients 10 and 25% improvements in their employee engagement.
To answer your question, strategic recognition can be a big improver and it can come quite quickly to their bottomline.
And it’s inexpensive. We’re not talking about huge cash outlays. We’re talking about the intangibles, right?
Yeah. Its a combination of both. It’s the intangible recognition, providing feedback and direction. And then there’s the token of “look here’s something to make sure you understand we really appreciate what you have done.
We’ve reached the Imagination moment in the show. Let’s imagine President Obama is on line 3 at your office right. He’s calling you in Dublin. He’s holding. He’s holding because he sees if we’re to reclaim our leadership role in innovation, make this the year of small business, we need to create a culture of recognition within our country. He invites you up to the White House. You and Eric. You sit down in the Oval Office. And he asks you. Guys, what are three things we can do now to create a culture of recognition in this country? Move us so far out in front, no one will ever touch us.
What do you tell him?
Well, that’s certainly an imaginative question. President Obama ringing me would be an exciting thing.
You said three things.
First of all I’d ask what does a winning culture look like? Let’s establish those values.
Then once we’ve got that set up, then let’s communicate those values. Let’s ask every American employee to spot those values. Describe when they see those values when they see them being done. Let’s have the employees celebrate those values when they see them being done. Then when they see those values celebrated then they tend to do more of them.
The third thing we have to do to complete the loop is let’s report on how we’re doing. Let’s have a White House Executive Dashboard. That’s something we typically do for a client. Let’s see which part of America are living out those values. And which part might need some more help. Which part can be exemplary centers for us to learn.
Let’s define the values we want to find.
Let’s communicate them and encourage every American to celebrate them.
Let’s report on them. See the metric. The metric signals throughout the country how we’re living those values.
We met when you left a generous comment on my blog. You guys at Globoforce seem pretty savvy with social media.
What's the role of social media with employee recognition?
I mentioned social media as an example of a very exciting dynamic in employee recognition today. That is the next horizon for employee recognition.
I’m happy to report some very high-end products we’re developing right now with clients. And it’s a whole area we’ve given a name Social Recognition.
And it’s just like you see in social media where people can share emotions and ideas, the rapid pace people can share emotions and ideas in the social world, the way it happens in a borderless world.
We want to leverage that and take it into Social Recognition.
How do you use social media with Globoforce?
Twitter is Globoforce. Globoforce dot com is our main website. I have my core blog there. You might see me guest blogging at HR Zone in the UK or Compensation Cafe in the US. Soon we’re going to have a blog in Australia.
The word’s getting around and we’re happy to be able to share our message.
Leaders are readers. Jim Rohn says that. I just quote him. You’re a leader. What are you reading these days, for work or not.
I’m re-reading a book I read 6 months ago. Many of your listeners will now it. It’s Dan Pink’s book, Drive: The Surprising Truth About What Motivates Us. The reason I’m re-reading is I put Dan’s book in a slide presentation for a client. I wanted to make sure I got all the details.
I put it up there with a number of other scholarly academics from over the years. names like Maslow or Frederick Hirshberg. I put Dan up there with these two legendary figures because I think he’s doing a great job bursting some myths himself around the whole topic of what really motivates us.
In that book and we shared a speaking platform with him, he talks about sharing a great culture and managing that culture to support those things that truly motivate us.
Dan is creating a few ways to describe our industry, the incentive industry. He talks a lot about incentives as such, old-school incentives, just aren’t working in today’s workplace. Where we’re so much more dependent on knowledge workers and people need to act in an autoonmous way.
Incentives came out of the industrial era when they were putting widgets together. Some people don’t like it. They have vested interests in the old-school sales incentive model. But we’re in total alignment, supporting good winning cultures, cultures designed to get a good working place where you’re inspired to give your best every day.
Leave us with one parting thought about winning with a culture of recognition beyond buying your book which I hope they do.
That would be the statistic you shared at the outset. It really is a disgrace to see 25 - 30% of employees engaged in the workplace. Everybody knows in their heart we can do better. We’ve got an approach that’s proven and it is possible to do better.
People have the book and I look forward to talking with everyone about how we can improve that statistic together.
Derek, thanks!
Next guest: Richard Troxell, author of Looking Up at the Bottomline: The Struggle for the Living Wage.
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