What worries CEOs the most?

Microsoft’s CEO Satya Nadella

What worries CEOs? Everything, of course. It’s part of their job description. Managing the executive team, developing strategy, sourcing financing, overseeing marketing, it’s all part of the job.  And if the CEO is heading a startup, the list of to-dos gets even longer.

PwC and others have listed their top CEO concerns for 2017, and not surprisingly technology is one of the biggest disruptors. But an even bigger worry for many is employee engagement. Yet as a Harvard Business Review article by Jacob Morgan points out, when it comes to employee engagement, millions of dollars are wasted.

The problem is that organizations try and engage employees with quick fixes such as team building programs and motivational seminars. But these kinds of programs are expensive, are often developed in isolation, and don’t leave a lasting impression. Most employees will tell you that within days of listening to a motivational speech, no matter how inspiring, both the message and the energy spike has worn off.

Jacob Morgan’s research shows that successful companies “go beyond what engagement scores are telling them to do” and instead focus on rewiring the employee experience so they are excited to come to work each day. Morgan identified three environments that matter most to employees: cultural, technological, physical. Companies that devote their energies to a combination of these three areas outperform their peers. “Compared with other companies,” says Morgan, “the experiential organizations had more than four times the average profit and more than two times the average revenue. They were also almost 25% smaller, which suggests higher levels of productivity and innovation.”

Morgan’s most concrete example is Adobe. It actually boasts an EVP of customer and employee experience. More importantly,  it is making “considerable investments in real-time employee feedback programs, beefing up diversity and inclusion efforts, giving employees access to consumer-grade technologies, and building workspaces according to multiple floor plans to accommodate different styles and preferences.”

But in my view even Morgan’s so-called “experiential” organizations don’t address employees’ biggest underlying need, and CEOs should be worried.

The need for meaning and purpose

Employees need to feel a sense of purpose during the forty or so hours they dedicate to their companies every week, 50 weeks a year. The most successful companies understand this. They make sure that they create a culture of high integrity and strong values that are deeply embedded into the organizational DNA. In the twentieth century, IBM, Johnson and Johnson and Hewlett Packard were three of the best at doing this. In the twenty-first century, companies like Zappos and Apple lead the way.

How do they do it? They create a brand vision that is compelling, customer-focused and easy to understand. They give employees a goal, a purpose—a sense that the work they are doing will make a difference. But few companies manage to achieve this.

Microsoft for example, seemed to have lost its way until a new CEO came along. With Satya Nadella at the helm, the ship seems to be righting and Microsoft employees seem inspired again. Why? It all began to change when Nadella told his employees that the company had a new mission: “to empower every person and every organization on the planet to achieve more.”

But how would Nadella embed this mission in the DNA of a company the size of Microsoft? Not an easy task. But Nadella was a shrewd guy. He knew that change would have to start at the top, but it could only bloom at ground level.

Change starts with culture

Nadella realized he would have to change the culture. Culture drives everything, he wrote in a later email to employees:

Over the past year, we’ve challenged ourselves to think about our core mission, our soul — what would be lost if we disappeared. That work resulted in the mission, strategy and ambitions articulated above. However, we also asked ourselves, what culture do we want to foster that will enable us to achieve these goals? We fundamentally believe that we need a culture founded in a growth mindset. It starts with a belief that everyone can grow and develop; that potential is nurtured, not predetermined; and that anyone can change their mindset. 

Of course there is more to it than that. For decades Windows had been the cash cow and the mission statement was a computer on every desk and in every home. And that meant for the company to grow, they needed to grow Windows. But those days are gone. The cloud is the new goal, it has to be, because computer sales are slowing and will continue to do so. So employees had to be let go or retrained. New people had to be hired.

And for employee engagement at Microsoft to be sustainable, it had to be long term and it had to be authentic. And it had to come from the very top because that is where authenticity begins and ends.

The truth is, quick fixes in EE are not only a waste of time and money; they are unforgivable in a business environment that increasingly relies on passionate employees to provide the best path to sustainable competitive advantage. Microsoft understands this. So does Zappos and so does Apple. But “keeping employees happy” is not at or near the top of their worry list.

That’s because happiness is not what employees want. They want meaning. And until you give them a sense of purpose that authentically emanates from the top, your organization will struggle to reach its full potential.

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