Connection at Work... a 'soft' approach to sustainable competitive advantage?

Michael Lee Stallard is a vigorous proponent of the bottom-line value of fit in any organization. Fit, passion, and connection are direct contributors to productivity, alignment, retention and a host of other ‘soft’ issues that have a hard impact on results.

Here is the first in a series of excerpts from his recent paperback, Fired Up or Burned Out (reprinted with permission):

The Case for Connection at Work

One of the most powerful and least understood aspects of business is how a sense of connection among people affects their success in life. Just as the wind moves trees and gravity moves objects, connection is invisible, yet has a very real effect on the behavior of people. I’m convinced that unless the people in an organization have a strong sense of connection—a bond that promotes trust, cooperation, and esprit de corps—they will never reach their potential as individuals, and the organization will never reach its potential.

Employees in an organization with a high degree of connection are more engaged, more productive in their jobs, and less likely to leave the organization for a competitor. Such employees are more trusting and more cooperative, share information with their colleagues, and therefore help decision makers reach well informed decisions. Organizations that cultivate connection will be more innovative. Connection transforms a dog-eat-dog environment into a sled dog team that pulls together.

So what is connection anyway? When we interact with people, we generally feel that we connect with some and not with others. Connection describes something intangible in relationships. When it is present, we feel energy, empathy, and affirmation; when it is absent, we experience neutral or even negative feelings. Although we know what it’s like to feel connected on a personal level, few among us understand the effect of connection on us and on our organizations.

The Gallup Organization has done extensive research in this area. The best measure of connection is Gallup’s Q12 survey that asks questions about whether other people in your workplace care for you, help you grow, and consider your opinions and ideas. In 2002 the Gallup Organization published the results of a landmark research study in the Journal of Applied Psychology that tracked nearly eight thousand American-based business units over seven years. Business units with higher Q12 scores—in other words, higher connection—experienced higher productivity, higher profitability, and higher customer satisfaction, as well as lower employee turnover and fewer accidents.

Other studies confirm the opportunity exists to improve performance by improving employee engagement. The 2004 study by the Corporate Executive Board that I mentioned earlier concluded that the most committed employees outperform the average employee by 20 percent and are 87 percent less likely to leave the organization. A Hewitt study of fifteen hundred companies over four years showed companies with higher employee engagement realized higher total shareholder return.

Unfortunately, Gallup research also clearly shows that the lack of connection has resulted in widespread employee disengagement. Results from its Q12 survey consistently indicate approximately 75 percent of workers do not feel engaged or connected at work. The 2004 Corporate Executive Board global study of employee engagement revealed even more dismal results: 76 percent of those surveyed had a moderate commitment to their employers, and 13 percent had very little commitment.

The state of many organizations today is like that of a body builder who exercises only one arm. The result: one bulging bicep and three skinny, underdeveloped limbs. Can any body builder or organization perform at its peak with only 25 percent of its members engaged?

The Gallup Organization conservatively estimates the annual economic cost to the American economy from the approximately 22 million American workers who are extremely negative or “actively disengaged” to be between $250 and $300 billion. This figure doesn’t include the cost for employees who are disengaged but have not spiraled down to the level of active disengagement.

Widespread disengagement is a waste of human talent and energy. It’s not healthy for employees or employers. People don’t live with this level of frustration forever. When they are able to, many will flee to greener pastures, most likely to leaders and environments that will provide the connection they need, whether to somewhere else in your organization or to your competitor.

Two megatrends promise to make connection even more important: the coming labor shortage and increasing globalization of labor. In the Americas, Europe, and Asia, birth rates have plummeted below worker replacement levels. When more baby boomers retire in a few years, shortages are likely in many segments of the labor market. The numbers are daunting. The US Bureau of Labor Statistics projects a shortfall of 10 million workers by 2010. The Employment Policy Foundation projects a shortage of workers within this decade and lasting through much of the first half of this century. At its peak, it is expected that America will experience a shortfall of 35 million workers. Because workers will have so many jobs to choose from, leaders must understand the impact of the looming labor shortage. They will need to provide a workplace culture that attracts and retains employees or suffer as insufficient labor is available to meet their growth goals.

The coming labor shortage was highlighted in a lead article of the Harvard Business Review. In “It’s Time to Retire Retirement,” authors Ken Dychtwald, Tamara Erickson, and Bob Morison concluded, after a year-long study of the implications for businesses of the aging workforce:

• Mass retirement threatens to drain talent from businesses over the next ten to fifteen years.
• Businesses will need to attract and retain older workers to meet their human resource needs.
• The workplace environment will need to be altered in order to attract and retain workers.

The media’s coverage of this megatrend has just begun. The Wall Street Journal, Time, Foreign Affairs, the New York Times, and other thought-leading periodicals have recently featured articles on the approaching labor shortage. You can be sure that the noise level will rise to a clamor over the years ahead.

The second megatrend, the globalization of labor, will also intensify the need to engage people at work. Many areas of the economy, such as the financial capital markets, already operate in a global manner. Financial capital easily moves around the world, and the prices of financial assets in one part of the world affect prices everywhere else. Globalization is beginning to happen with labor too.

The case for connection at work is well-documented and iron-clad. Those who ignore it will find themselves giving away an important source of competitive advantage.

Michael Lee Stallard and Jason Pankau are co-founders and partners of E Pluribus Partners, a leadership training and development firm. They are co-authors of the best-selling book Fired Up or Burned Out: How to Reignite Your Team’s Passion, Creativity and Productivity. For additional information: www.michaelleestallard.com.