10 Next Practices for Creating Return on Investment from Employee Surveys

Many organizations survey their employees regularly, but they have different reasons for maintaining the survey process. Often leaders just want to assess employees’ satisfaction or engagement. Their logic is that research suggests that those metrics are leading indicators of performance, so it seems wise to measure them. As they say “what gets measured gets done.” Sure enough, the prevailing wisdom is that organizations need to identify “drivers” of employee engagement in order to find ways to maximize that score. By maximizing engagement, revenue will increase, efficiencies will be implemented, and profits will rise. It’s all very nicely packaged – survey to measure engagement, take action to improve engagement, repeat. The problem with this logic is that it assumes that all of the organization’s problems can be solved by having employees try harder (i.e., commit more time and effort to what the organization needs). What about aligning efforts, collaborating across silos, and being nimble? I see many organizations that have high levels of engagement, but still suffer execution problems. Does this mean that the employee survey is not worth the effort?

 

There is a growing set of progressive organizations that get return on their survey investment, but they treat the employee survey quite differently. Ask them why they survey, and they do not talk about putting all their energy into maximizing employee engagement. Instead, they talk about the survey as an investment that lets them learn about themselves so that they become better at what they do. At first blush, this sounds the same as what you would hear in any company that uses employee surveys. However, for the vanguard organizations, the emphasis is not on improving survey participation, not on increasing survey scores, and not on achieving 100% engagement. No, these metrics are good dashboard indicators, but they are not end goals. The reason these organizations survey their employees is to directly improve business performance by addressing opportunities and threats. Further, the survey is not just about employees telling leaders what is working and not working. Rather, the survey leads to a collaborative process of solving problems that creates return on investment – leaders and representative employees targeting the right actions in the right places with the right people in order to make the organization better. Oh, and along the way, the employees who were frustrated by their inability to more effectively do their jobs become completely bought into the process and more engaged in their jobs. Use the survey to improve performance, and as a byproduct, you will get improved engagement. See the difference?

Here are 10 techniques that are "Next Practices" for creating ROI from the employee survey.

 

1. Use the survey to create a dialog that identifies where your organization wants to be and where it currently is. Which gaps are most important right now, given the current business context? Survey analytics (e.g., norms, driver analyses) are helpful, but they should be conducted after ascertaining what topics are most related to opportunities and threats that face the organization. If prices are dropping in your industry, then topics related to cost efficiencies may be the most important feedback the survey provides. This focus on business outcomes also applies to departments and subunits. Instead of the IT department blindly focusing on improving engagement scores, for example, why not have them work to improve the speed of product specification changes so that Supply Chain can reduce the warehouse costs of keeping unwanted product? The survey provides an opportunity to improve coordinated effort by examining inside information about how your organization works. Think about how valuable your competitors would find this data, and then find a way to fully realize its potential for yourself.
2. Spend more time on the creation of action goals. Use the survey to prioritize one or two goals that will be evaluated based on organizational performance metrics other than the survey (e.g., measures of efficiency, sales, profit, cost savings, customer behavior…), and be sure to define what successful goal attainment looks like (e.g., a 50% reduction in Lost Workdays within 6 months). While many organizations realize that ROI comes from post-survey actions rather than the survey itself, they typically set targets as if the survey scores are the end goal. A goal to improve the engagement scores of the customer service employees is not obviously and directly related to improving the performance of the customer service department. As soon as things get busy or another initiative rises to prominence, the employee survey goals will be forgotten. A better post-survey action would focus on a clearer performance indicator, such as the ability for employees to solve customer problems without waiting for approval. Furthermore, the target should not be to improve that survey question by 5 percentage points. The ultimate target is to reduce the number of customer service calls escalated to senior representatives or to reduce the number of cancelled customer contracts. Yes, the survey is a leading indicator of performance, but evaluating your actions should be based on the actual performance metric.
3. Use a series of action plans that are designed to attain the same goal. Start with simple, low-budget actions that are easy to implement and can be evaluated quickly. Then, progress to more complex actions as necessary. Early successes can be used to gain support for more complicated changes. Creating post-survey actions can easily become an exercise in checking the box. Did you write a plan? Did you try to implement the plan? Did you cover your butt so you cannot be blamed for lack of trying? It would make more sense to have fewer leaders responsible for reaching a specific improvement goal, but to assure that these leaders do not stop until the goal is reached. Creating one action plan to create a change seems half-hearted. When President Franklin Delano Roosevelt was planning a US recovery from the Great Depression, he famously designed multiple plans and vowed to keep whichever ones worked while scrapping those that did not work. Post-survey actions should be planned in a similar fashion, with simple efforts coming first followed by more complex efforts. If problems are completely solved with a quick solution, then great. If problems are only partly addressed with a quick solution, then use the momentum to built employee support for a better solution. If problems are not solved with a quick solution, then use the failed efforts to better understand what will work.
4. Use words and phrases that will clearly communicate to employees what they are supposed to do differently and to what standards. Eliminate any ambiguity about what you are asking them to do. Much has been made about the need to communicate why changes are necessary, and indeed individuals will be more motivated to change their behavior if they believe it will lead to something better. However, motivation needs to be directed with specific instructions for what the new behaviors and new standards are to be. Assuming that the definition of success has been defined at the aggregate level (the total organization), that target must also be translated and refined down to lower levels of the organization and the individual employees themselves. Furthermore, the reward system, the training/development opportunities, and the priorities of the management chain must align with these goals. Only then will employees know that the organization is serious about change initiative.
5. Involve as many employees as realistically possible for action planning and execution. In large groups, try using peer-nominated teams to create plans. Volunteers and assigned champions are not always perceived as being in touch with the larger group. Research has consistently shown that individuals are more likely to commit to be part of a change effort when they see themselves as having a role in the process. While survey posters and campaigns often tout how employee feedback will contribute to a better workplace, the decisions about how to react to the feedback often appear to be removed from employees. Really, the people who are in the best position to determine how a change can be accomplished realistically. Leaders should be collaborating with employees to unearth great ideas and to create buy-in to the process.
6. Have employees help you communicate what they have done in support of the goal. In a change project leaders send out emails, hold chat sessions, and convene town hall meetings in an effort to communicate what is being done. These are good practices, and they should be continued if not increased. Continually sharing successes as well as missteps that need correcting builds a climate of openness and trust. What many leaders (and communication VPs) overlook is the opportunity to project how there are many employees joining the effort to achieve the goal. By showing the groundswell of support, you build the social norm and pressure the doubters to join the campaign. Having lower level employees showcased as examples of “peers” who are making the change real will have even a strong effect on those doubters.
7. Use short notes or meetings to provide ongoing feedback to individuals (or groups) about their progress toward the goal compared to others’ progress. Here is where front-line supervisors can really help support an organizational change. One easy example comes from research on social norms. Let’s say there is a new procedure being introduced in a factory. Have the supervisor show a direct report her assembly time in comparison to the organization average. If she is below average, then the feedback will show her that her peers have progressed more quickly, and that she is in fact holding them down. This creates pressure to work harder or get help. If the employee is actually above the group average, then the supervisor has to use a different tactic so that she doesn’t relax her efforts and reduce productivity. This can be done by reminding the employee that she is doing exactly what she should be doing. Even a simple happy face J or sad face L will work can send an evaluative message that also creates pressure to keep up the hard work.
8. Remember that your organization may include employees from different jobs, backgrounds, and cultures. Often these situational differences affect how people perceive the workplace and changes to the workplace. Find a way to get honest feedback from all segments of the population. Note that people from different cultures have a different approach to taking employee surveys. In Japan employees use the midpoint on a survey far more frequently than do Americans. Their scores will be lower even though their perceptions may be just as favorable. Employees in Latin America are far more likely to use the top level response, suggesting high favorability. Likewise, you tend to see higher scores among Sales and HR functions, and you often see lower scores from ethnic minorities. How do you know if these highs and lows really represent true feelings about the work environment (and are not just a methodological phenomenon)? Well, follow up with these employees to see if they have the same joys/frustrations as found elsewhere, or if perhaps they experience a different situation.
9. Be persistent with the goal, but flexible in how it is achieved. Some people will need to change their thinking before they change their behavior, and they may need to discover their own way of helping out while maintaining their social stature and sense of worth. Think about the last time that you truly vowed to eat less, work out more, or stop smoking. Did you have setbacks? Did you have to figure out a way to change your routine in order to “trick yourself” into achieving your goal? Well, the same can hold true for employees who have cognitively committed to an organizational change, but have yet to behaviorally commit to change. Being transferred, even temporarily, to a group who has changed their behaviors can help these folks make the switch. Suggestions from peers and some form of “support groups” can also help.
10. Make sure to include methods that will sustain new behavior even after the goal has been achieved. Consider whether recognition, reward systems, and new goals will continue to motivate employees to keep up the good work. Changing the way you do things can be very tiring, especially if you work in isolation from other peers or even your supervisor. To make a lasting change, the very culture of the organization has to help maintain an individual’s effort. Have employees help you see their point of view, their situation, their environment, and you may realize that the “organization” has not changed in a way that supports the organizational change facing employees.

 

This content is protected by the 1976 Copyright Protection Act of the United States of America. The proper citation for this blog is as follows: Mastrangelo, P. M. (date posted). Title of Post. The First Domino, available at http://the-first-domino.blogspot.com. This post is not intended to represent any person or organization other than Paul M. Mastrangelo.

Engagement In My Dreams

Last night I had a dream about meeting two Chief Human Resources Officers (CHROs) from two separate companies. We were at an airport bar waiting out a lengthy flight delay while fortifying our bodies with the local brew. On my right was the CHRO from a company called Ideal, Inc. They were very successful as a B2B service provider, but they were not very flashy in marketing or employment branding. They had good profit margins, although not close to the highest in the industry, probably because they believed in overstaffing projects. Their customer retention was at 93% annually, which was the envy of their competition. They favored hiring applicants with specialized degrees and at least a year of experience in the business. Because of their overstaffing philosophy, newcomers were able to join an established team of experienced employees on actual projects. The team members’ performance was partly based on how well they developed the new employee over the first two years. Then, the new employee was given more leadership responsibilities and the task of supporting another team that offered different services. In this way the employee collaborated with more staff, learned about other services, and potentially brought back ideas to his or her home team. Another characteristic at Ideal was that 90% of employees had customer facing duties. Indeed, employee performance ratings were also partly determined by customers’ ratings from 360 feedback surveys and their responses to phone discussions with team leaders about delivery.

I was intrigued as I grabbed the last of the pub mix, so I asked the Ideal, Inc.’s CHRO about how they maintained employee engagement.

The CHRO smiled and said “Engagement just happens. We don’t worry about creating it. Our employees meet challenges from our customers as well as facing challenges from internal changes in technology, delivery and so forth. In HR I try to foster our leaders’ two-way communication with employees about these challenges. If HR helps leaders and employees collaborate to solve problems and eliminate frustrations, then the company’s performance improves and the employees know that they are the key to making it happen. Engagement is a byproduct of getting good employees—ones who love what they do—to partner with democratic-style leaders who see themselves as working for their employees. We occasionally arrange lunches or happy hours to celebrate achievements or sometimes to let off steam about what we do, but helping people do their job is our engagement strategy.”

At this point in the conversation, the CHRO on my left nearly dropped a full glass of IPA. This was a CHRO from a different B2B service provider called AveragCo.

"Wow. That is not my experience as a CHRO at AveragCo. As a company we are always looking to make our employees have fun at work, balance their personal lives with work duties, and promote our brand. You know, half-day Fridays, contests, giveaways. I guess we have to, really. I mean our engagement scores are high, but I never feel as if our employees are excited by what we do. We have more layers at AveragCo, and less than half of our employees are customer facing. They get their performance ratings from objectives that are cascaded down from the top. That seems like a good idea, but employees complain that the measures we use are at a level too high to indicate good or bad employee performance. Like today, I had a guy complain about his rating because the customer he works with was the first to transition to new software we provided from a new third party supplier. He worked like a dog tracking issues and bugs, but he had no power to make our supplier move more quickly to make the fixes. Naturally, this customer gave us some lousy ratings, which means this employee got a lousy rating. The only recognition we provide is through bonuses, so he felt punished for working twice as hard. Lucky for us the job market is so horrible, huh?”

Now it was the Ideal Inc. CHRO who nearly spilled the suds.

“Well, no wonder you have to worry about engagement at your company! If your employees feel stuck in their jobs, they are powerless to improve performance, and they are de-motivated by the company’s performance process, then of course they will unplug.”

The AveragCO CHRO shrugged and said, “Well, we have a different hiring philosophy than you do. We hire young, smart people and work them hard until they decide they have had enough. It keeps our salaries lower, and our profit margins higher. I know it sounds a bit cruel, but sometimes a business strategy does not focus on developing talent.”

“Wait, a minute,” said the Ideal, Inc CHRO. “I thought you said that you were constantly working to engage your workforce? And you just said that you were lucky that the job market isn’t better. What is the ROI for your engagement strategy, if you can call it that?”

I cringed a bit. I didn’t want to have an HR bar brawl emerge in front of my eyes, especially as I was in the middle of the two of them. Luckily, the AveragCo CHRO seemed to ponder the words as if never really thinking about it before.

“Hmm. ROI on engagement. Well, we use a survey that has been researched by the vendor. High engagement corresponded with higher profit, higher revenue, and better performance. So, we just worry about keeping our engagement scores as high as possible.”

There was a pause and a sip of beer (still no more pub mix) before we heard more about AveragCo.

“It is funny, isn’t it? We actually feel that our turnover is not high enough! Yet, the only thing that our leaders come to HR about is improving engagement. For us, that is mostly about intention to stay, because this is the easiest correlation for us to make within HR. We know that higher engagement is associated with lower turnover, but… you’re right. That’s not our problem. Energy level, collaboration, performance… those are our problems.”

The Ideal CHRO then said something that really stuck with me.

“Maybe you are engaging people the wrong way. The fun and the work/life balance might promote staying at the company, but it is probably taking away from being absorbed in one’s work. We’ve got this guy in our office who genuinely loves his work—forgets what time of day it is, always looking to help other employees, always thinking that there must be a better way for us to get things done. I asked him why he does these things. He said the work is something that fits what he does well and what he likes to do. Plus, his boss trusts that he is going to make good decisions that help the company succeed. He said it’s like everyone is a leader at different times, and everyone is a follower at different times. When he comes up with an idea that will save time or create a new service, his boss becomes the follower who helps make that idea a reality. Then, his boss becomes the leader again by setting up tests to see if the idea should be adopted or discarded. They are completely aligned on the same goal, so there is no need for formal ‘you do what I say to do’ leadership.”

“But how can HR make that happen?” asked my new friend from AveragCo.

“We hired a good fit for the job, but also a good fit for what the job would become in the future. We developed our leaders to change the way that they lead. Leadership, at Ideal, is about sharing information and decision making. The leader’s job is to foster teamwork, encourage new directions, and help individuals play their roles… and to change those roles when an opportunity pops up. Think of the Beatles, right? John Lennon formed the band and was the leader, but he brought in Paul McCartney because it made the band better. He let everyone write songs and use different instruments. He was completely open to new possibilities, some of which he would not have chosen.”

“John Lennon hated ‘Ob-La-Di Ob-La-Da’ you know,” I proudly pointed out, feeling good to add such value to this conversation. I grabbed at the pub mix the bartender just placed in front of me.

"My point is,” continued our Ideal spokesperson, “if you want to have the best band in the world, then you bring in good people, you trust them, and you partner with them to accomplish your shared goal. If you want to improve organizational performance, you do the same thing. The goals you set for your employees and the sharing of leadership to help them succeed will create employee engagement and make your company more… Ideal like.”

That’s when I woke up, still tasting the salty peanuts and spicy snacks. I wonder if the AveragCo will become more Ideal, or if only in my dreams.
This content is protected by the 1976 Copyright Protection Act of the United States of America. The proper citation for this blog is as follows: Mastrangelo, P. M. (date posted). Title of Post. The First Domino, available at http://the-first-domino.blogspot.com. This post is not intended to represent any person or organization other than Paul M. Mastrangelo.

Using Twitter at the SIOP Conference for a Better Learning & Networking Experience

The Society for Industrial and Organizational Psychology (SIOP) is holding its annual conference from April 26-28 in San Diego, California. This professional society is dedicated to the science of psychology applied to work and organizational settings, with sessions focusing on HR, OD, and personnel research and practice. This posting is to help those of us who are SIOP members (and those of you in HR and OD who are not SIOP members) connect better during and after the conference. Specifically, if you are new to Twitter or to Twitter Chats, then this posting will help you ramp up and have a better learning and networking experience.

First, I would like to encourage folks to use Twitter while at the SIOP conference to share ideas about sessions, note memorable moments, and share comparisons of ideas across sessions. By attaching the hash tag #SIOP, anyone can filter tweets to see all the latest conference comings and goings. If you have not used Twitter before, my experience from last year is that the conference tweets were really helpful in making the large conference feel smaller. I met folks for coffee, and followed people with similar interests to my own.

In Case Twitter is Greek to You...

Would you like to experiment with Twitter at the conference? That's what I did last year. All you need is a free Twitter account and to connect with me (click here). Once you have a Twitter account, nothing really happens until you follow others (for example, you can follow SIOP by searching for @SIOPtweets on Twitter and then clicking on "Follow"). Then, anything that is tweeted by a person/organization that you follow will automatically come to your Twitter account. At a conference (or any live event for that matter), you can use your smart phone app to post messages on Twitter (which are known as tweets... yeah, it's corny, but you get used to it).

You can tweet messages outward by clicking on the "Compose New Tweet" button and typing in a message. All tweets must be 140 characters or less, and that includes any "hash tags," which are like labels that people use to search for a topic. If everyone at the SIOP conference uses the #SIOP hash tag when posting about the conference, then anyone on Twitter can search using that hash tag and see all the postings. Learn more about Twitter here.



Twitter Chat Session


Second, I would like to announce that I will moderate a Twitter Chat session on the last day of the SIOP conference, which is Saturday April 28, 6:00-7:00 PM Pacific Time (just after the ending session by Albert Bandura!). Some discussion points will be:


- Q1 Reactions to Bandura's presentation


- Q2 Most helpful sessions at conference (so others can request papers, get audio record)


- Q3 Contradictions and unresolved issues


- Q4 Suggestions for next conference


- Q5 Seeking collaboration for research and/or 2013 submissions


- Q6 Other thoughts/ideas/comments


Again, if you have no experience with a Twitter chat session, don't worry... I have only participated in one myself, but it is REALLY easy to join and if you are bored to tears, it is really easy to leave.

A Twitter chat is nothing more than a preplanned time for interested parties to search for the tag that will be used for the chat session. In this case, I will use the same #SIOP tag. So, if you search for #SIOP between 6:00-7:00 pm PDT on April 28, then you will see all the postings as they happen. In fact, you can search and read the postings afterwards, too.

If you want to not only read these postings, but contribute to the discussion, all you have to do is (again) tweet your response to the current topic and include the hashtag #SIOP. It's that easy. When you see a tweet that you want to comment on, you can just hit "Reply" and Twitter automatically includes the @ symbol followed by the person who tweeted.

I will moderate the chat session by introducing questions/topics by number (as in the Q1 to Q6 list above) so that participants can include the number in their tweet as well. If you see my tweet, you can just reply and include the topic by number. For example:

• paulmastrangelo: Q1-What did you think about Albert Bandura's speech?
• you: @paulmastrangelo Q1-That guy rocks!
• somebodyelse: @paulmastrangelo Q1-Ugh! Wish I stayed! What did he talk about?
• anotherdude: @somebodyelse @paulmastrangelo Q1-Way more than social learning.
• paulmastrangelo: Q2-What were the most helpful sessions you saw?
• lateperson: Q1-His joke was really funny!

A Twitter session can be difficult to follow, and some sidebar conversations will pop up. But with the tags, the topic numbers, and the replies to specific people, it manages to work out well.

Hoping you will join and spread the word!!! (Follow me at @paulmastrangelo)


This content is protected by the 1976 Copyright Protection Act of the United States of America. The proper citation for this blog is as follows: Mastrangelo, P. M. (date posted). Title of Post. The First Domino, available at http://the-first-domino.blogspot.com. This post is not intended to represent any person or organization other than Paul M. Mastrangelo.

Calculating ROI for Engagement Surveys: Understanding the Potential of Analytics (Part 2)

Last month I provided an overview of analytic techniques described in the 2011 book Investing in People: Financial Impact of Human Resource Initiatives by Wayne Cascio and John Boudreau. This month’s posting will show how to use a few of these techniques to examine the costs and benefits of running an employee engagement survey.


Employee engagement is a concept defined as the logical commitment to an employer, an emotional commitment to that employer, and extra effort and energy expended for that employer. In simpler language, engagement is the head, heart, and hands of the workforce (See Mastrangelo, 2009, article in OD Practitioner, also available at HR.com). Typically, engagement is measured via an employee survey, where specific items are used to assess the attitudes, intentions, and behaviors that define the concept. One reason that employee engagement surveys are so common is because of research that showed how engagement was a leading indicator of two business outcomes. The first is what Cascio and Boudreau refer to as “participation membership” because it pertains to an employee’s decision to continue to work for the employer and to show up to work on time and ready for duty. The Corporate Executive Board (CEB: www.executiveboard.com) refers to this as Intent to Stay, and these intentions are excellent predictors of subsequent turnover. The second outcome linked to engagement is what the authors call “work strategies” because it pertains to effort and job performance. CEB refers to this as Discretionary Effort, and it is highly related to an employee’s energy level and proactive behavior at work. Obviously, if you have a survey measure that predicts who shows up and who pitches in everyday, you can detect and rectify problems as well as improve on mediocrity. How much value can the survey create? Let’s answer this question first for turnover costs and then for performance.


Survey Value from Preventing Turnover

The CEB’s Corporate Leadership Council examined data from approximately 50 large companies in 2004, and published what I consider a starting point estimate for the value of the survey. Their “10:9 Rule” states that every 10% improvement in commitment (measured through an engagement survey) can decrease an employee’s probability of departure by 9%. If you have no data from your own organization, than this finding does provide some help in estimating the potential turnover savings. If you know, for example, that each employee departure costs the company 2.5 times his/her salary in replacement costs and lost productivity in the subsequent year, then you can calculate savings based on the assumption that you can raise commitment scores by 10% in one third of the operating units. Even if you use the average salary at your company, you have an estimated monetary value based on turnover alone. The problem is that your estimate will be based on many assumptions. First, the “10:9 Rule” came from one set of companies that were studied a few years ago. Your organization is quite likely different from the “average” in this study. You would have a better estimate if you used your own organization’s data to statistically regress turnover on prior survey scores. You also might find that there are different “Rules” for different locations or jobs within your organization. Furthermore, employees from different jobs can have a much different replacement cost. The departure of highly trained employees in complex jobs costs far more than will the departure of employees in simpler jobs that require minimal skills – not to mention different job markets in different geographies. Thus, the calculation of costs could become much more complex.


Before leaving this topic of preventing turnover, it deserves mentioning that most organizations in 2012 are not experiencing too much turnover. In fact many companies tell me that there is not enough turnover. Employees who would have left the company if the economy was better have been forced to remain in jobs that they don’t want or that do not match their skills. Their performance may be enough to keep their jobs, but not enough to fulfill expectations. If your company is in this situation, turnover costs may only be a concern among high potentials and key performers.


Survey Value from Improving Performance


The same CEB Corporate Leadership Council data from 2004 led to their 10:6:2 Rule, which states that every 10% improvement in commitment can increase an employee’s effort level by 6%, which can improve an employee’s performance by 2%. Once again, I would only rely on this rule in the absence of data specific to your situation. For example, you might choose to look at the individual employee as the unit of analysis in your company’s data set and correlate individual survey scores with individual performance measures. With this analysis you would be able to show that increasing the survey score by one standard deviation would result in an increase in performance equal to the standard deviation of performance multiplied times the value of the correlation r (for example, +.35). Your estimation would be more accurate if you could use an objective measure of performance (e.g., production numbers, sales figures) that was observed at least six months after your survey scores were calculated. Note that you still do not have a monetary figure that would show the benefits of acting on the survey. To take that next step, you could rely on the rule of thumb that the difference between average performance at the 50th percentile and one standard deviation above average at the 85th percentile is equal to an increase in performance that equates to 40% of the total annual salary for that group of employees. If an increase in survey scores of one standard deviation would suggest a performance improvement equal to .35 of a standard deviation, then the monetary benefit would be .35 multiplied times 40% of the total annual salary multiplied by the number of employees whose engagement improves by a standard deviation.


Many companies choose not to connect survey scores with the performance of the individual employees who provided those scores. In those situations, you can still estimate the value of improving group performance. Instead of using the individual unit of analysis, you would aggregate survey scores for groups of employees and then correlate these figures with the groups’ aggregated performance scores. In these situations, you may be able to create more accurate monetary values because you probably have access to the difference in revenue or profit for these groups; therefore, you can calculate the difference between the average monetary value and the value for the group that is one standard deviation above the average. As long as you have a large number of groups to calculate your correlation (I would say 30 is the bare bones minimum), then once again you can calculate the monetary value of raising group survey scores by one standard deviation.


Before leaving this topic, I need to state that correlations and percentile distributions assume that the data form a normal distribution (or bell curve), and often this assumption is not met in survey data or performance data (both of which tend to be skewed toward the favorable end of the scale). Some other statistics may be required. Furthermore, there are far more complex techniques for calculating the monetary value of one standard deviation above the average performance rate. The 40% rule is by far the easiest to explain, and many believe it is reasonably accurate. Still, a lot of industrial/organizational psychology papers have been written on the dollar value of SDy, as it is known in those circles. As I said, in some cases you can get a more accurate figure with your company data (e.g., the standard deviation of individual sales employees’ revenue totals, the standard deviation of revenue across retail branches).


Return on Investment


Note that even if you calculate the benefits of improving survey scores, you have not shown ROI until you demonstrate that these benefits are greater than the monetary costs of running the survey and creating the actions that will improve engagement. You may want to consider the cost of outsourcing the survey administration and reporting, the cost of employees’ time to complete the survey, the cost of HR managers’ time to prepare for administration of the survey and interpretation of results, and the cost of leaders’ time and resources to make changes. If that sounds depressing, then consider the fact that the “shelf life” of these investments may last multiple years. Imagine if you keep a third of your high performers from leaving the organization for 3 years, and that their performance increases in year 1 and is sustained for year 2 and year 3. Now, your costs are offset by multiple years’ worth of benefits. The bottom line (no pun intended) is that calculating ROI for an engagement survey can be complicated and fraught with assumptions. Let's end on a simpler thought.


Perhaps the easiest approach, if you are looking to justify a survey project, is to estimate the total cost of administering and interpreting the survey, and then divide that figure by the number of managers who will be expected to take action on the surveys. For example, if your total estimated costs for the survey are $500,000, and you expect just 100 leaders to be held accountable for making improvements based on the survey, then your break-even point occurs when each manager saves or earns $5,000 during the same fiscal year. That is not an intimidating figure for a motivated leader. In fact, managers may enjoy collaborating with their employees to discover problems and solutions that will reach or surpass that $5,000 figure. For that matter, employees may enjoy the challenge of helping managers reach or surpass this goal. This is the type of analytic measure that leads to business outcomes, and that’s what leaders want to see.




This content is protected by the 1976 Copyright Protection Act of the United States of America. The proper citation for this blog is as follows: Mastrangelo, P. M. (date posted). Title of Post. The First Domino, available at http://the-first-domino.blogspot.com. This post is not intended to represent any person or organization other than Paul M. Mastrangelo.

The Next Big Thing in HR Is Already Here: Understanding the Potential of Analytics (Part 1)

Fads exist in fashion, music, food, travel, and also in business. Some fads become footnotes in history, while others have a lasting impact, perhaps better labeled as a breakthrough instead of a fad. Ultimately, if an idea proves to be more useful than any existing competing idea, it not only survives, but spreads as a best practice. Management by Objectives, balanced scorecards, and employee engagement are some of the memorable “must have” ideas that have left a lasting mark in the HR field. Now in our second decade of the century, many HR managers have been asking me “What is the next big thing in HR?” I do believe that we are about to see a revolutionary change in how HR contributes to organizational success, and I believe that this change is upon us now. What is yet to come is how we choose to use this breakthrough.

The big idea is analytics. You have probably heard this term quite a bit. The Obama campaign is touted for maintaining metrics on everything (see USA Today, February 7, 2012 article). IBM touts data mining capabilities that ease traffic and reduce energy consumption. Wayne Cascio and John Boudreau have an excellent 2011 book that details multiple analytic techniques (see Investing in People: Financial Impact of Human Resource Initiatives). As recently as 15 years ago, you had to look for data, and many who suffered from a statistics phobia chose not to. Now data is everywhere (not always accurate perhaps, but that topic is for another day). Google let’s you view trends of search terms used. Klout let’s you measure a person’s influence on social media (Learn more here). Websites let you track who visits the site, how long they have stayed on the page, and how they found the site. Human Resource Information Systems (HRIS) are commonly used in businesses of all sizes. With so much information available, organizations that learn how to analyze available data will be able to see opportunities and threats more quickly than ever before. The same holds true for individual employees. Learn to use analytical skills, and you will have a big career advantage. So what is “analytics” and how can you use it in your job? Let’s explore these questions.

What Does Analytics Mean?

At a basic level, analytics is about working with numbers. To measure something is to assign a number that represents some quality of interest. This is the stuff of metrics, and once you have a metric, you will likely be interested in comparing that metric within your organization as well as outside your organization (i.e., benchmarking). Before you can make a comparison, however, you have to make sure that all of your numbers are created in the same manner. This is not as easy as it sounds. Some things are more easily quantified than others, there are multiple ways to quantify any one concept, and there are typically debatable assumptions about how you quantify any concept. Don’t let these obstacles scare you; analytics is about art as well as science, and tackling these obstacles is where you can use your creativity. Any concept that you can define in words can be measured. The trick is to consider how you will assign numbers in the most meaningful way. You might measure turnover as simply as assigning a 0 to each current employee and a 1 to each individual whose employment has been terminated. Alternatively, you could separate terminations by voluntary versus involuntary by assigning a 1 and a 2, respectively. Another way to study terminations is to record the number of months that each employee was employed. These are all individual level metrics, but usually turnover is measured at the unit level. Generally, the number of turnover incidents within a company (or subunit) per time period divided by the average workforce size during that period (expressed as %). Of course the size of the workforce fluctuates by season for many companies, so an annual turnover rate uses the average of each month’s average workforce. My point here is that you may be able to learn volumes about turnover patterns and prevention, but you have to be able to create the right measure in the most accurate manner for your particular purpose.

At the next level, analytics is about the relationship among numbers. Sometimes companies are looking to test for a causal relationship, where one variable has a direct effect on another variable. For example, you might want to show that the new leadership training program improves leadership decisions for the organization beyond what they would have been without the training program. In this case, you need to eliminate other possible contributing factors, such as a leader’s experience, prior training, level of difficulty, etc. Researchers show a causal relationship via an experiment, where one variable (e.g., training vs. no training) is manipulated, several variables are held constant (e.g., the study only includes US leaders with 2-4 years of supervisory experience at this company), and some variables are monitored (e.g., knowledge measured from a test, peer and direct report performance ratings, revenue generated). If you can assign trainees to the two conditions in a random or matched manner, then you have a strong test of causality. However, if the assignment of trainees is neither random nor matched to keep each condition equivalent, then you have a weaker test of causality (known as a quasi-experiment). Of course there are times when companies do not need to show a causal relationship just so long as they can see a predictive relationship: the ability to measure one variable that is a leading indicator of some other variable. Do interview scores predict the best hire? Do engagement scores predict financial outcomes?

Finally, analytics is about money, as in Return on Investment. If you decide to implement the training program that has been found to improve leaders’ decisions, that does not automatically mean that the outcome will produce more money than the training program itself cost. The level of detail here can be incredible. Consider the following cost and benefit metrics:

Financial Costs of the training program

• Time of all HR staff to identify the program and/or trainer
• External consulting fee plus all travel and equipment involved for the trainer
• Cost of the trainees’ time based on what they would have been doing otherwise
• Cost of the trainees’ travel and equipment involved for the trainees
• Facilities cost, including any food or beverage provided
• Cost of replacement or substitution of the trainees, including reduced quality/quantity for customers (!)

Financial Benefits of the training program

• Monetary value of trainees’ individual improvement in performance (!)
• The “shelf life” of that improvement; when improvement ceases to add value (!)
• The interaction across trainees’ improvements that can create a multiplicative effect for the organization (!)
• The improved reputation, branding, or marketing advantage as a result of improvements (!)

How Are Analytics Used?

Analytics are used for three primary reasons:

1. Cost Assessment: To improve understanding of a problem or potential problem by creating a detailed method of estimated cost of current operations (and/or cost of change/improvement effort)
2. Decision Making: To make decisions about a potential course of action that could solve/improve a problem based on what is expected to be the benefit in the future (i.e., estimated future value despite uncertainties at the current point in time)
3. Evaluation: To evaluate the ratio of benefits (monetary value of making a change/improvement effort) divided by the investment (total cost of making the change/improvement) for decisions made in the past

I created a short list of techniques (listed in Cascio & Boudreau, 2nd edition, 2011, on p. 33 and described on pp. 33-46) and categorized them into these same three reasons for analytics. Note that some of these techniques can be applied to more than one of these reasons.

1. Cost Assessment

a. Types of Costs (Fixed, Variable, Opportunity) examines types of “elements” that are added up to understand the monetary cost for an organization.

i. This might be used to assess organizational performance, for example, or it might be used to help one gather all of the elements necessary to calculate investments for cost/benefits analysis (ROI).

b. Time Value of Money: As so much of the analytics in business should ultimately be expressed in terms of financial value, one must recognize that a unit of money (e.g., 1 US dollar) can produce more money in the future if it is just held in an account that produces interest. Hence, the Present Value is different from its Future Value because of compounding interest. Likewise, a Future Value (assuming the compounding interest over a span of time) is greater than the Present Value needed to produce it; this is known as Discounted Cash Flow Valuation, which is how much money now is needed to produce a future value.

i. This relates to analytics because the “payoff” for some change or improvement may come over the course of years. One must recognize that NOT investing money in a change/improvement still can provide money back to the organization.

ii. As a result, what seems like a good ROI for a change/improvement effort may be no better than if the company did nothing with that investment other than keep it in an interest bearing account.

c. Value of Employee Time: Typically, the value of an employee is difficult to assess, particularly for complex jobs. However, the accepted practice is that the monetary value of employees’ time is equal to the sum of a) the mean salary for the group in question plus b) the mean cost of benefits provided for that group multiplied by a Full Labor Cost Multiplier (which is nothing more than a portion of the fixed and variable costs invested so that the company can employ workers, such as rent of office space, manufacturing equipment, etc.)

i. The value of employee time may be used in multiple ways, including estimating the current process (potential problem), the cost of initiating a change/improvement effort, or the benefit (i.e., predicted value) of an alternative.

2. Decision Making

a. Utility as Weighted Sum of Utility Attributes: in a situation where one wants to decide among multiple alternatives for action, it is helpful to examine the anticipated value (or benefit) of each action as well as the probability that the action will result in the desired benefit or outcome. The concept is that the action which has the highest product of value multiplied by probability is the best course of action.

i. Multi-Attribute Utility Theory (MAUT) is a formula that one uses to analyze ratings of various outcomes for a business as well as the likelihood (probability) that each of several courses of action will bring about each outcome. For example, if a company wants to increase market share by 25% within two years, it may have multiple options for achieving that goal. MAUT uses stakeholers' estimations of value and likelihood of payoff to numerically rate the best course of action.

ii. Can be used to help leaders decide upon a course of action in the absence of financial estimates or existing evidence

b. Conjoint Analysis: in a situation where one needs to know the psychological value placed on a set of attributes or features in order to compare these ratings or rankings with the actual monetary value of each attribute or feature.

i. By presenting a set of employees with paired comparisons (would you prefer A or B?) that would produce a ranking of most selected to least selected options (similar to policy capturing research), then it is possible to choose, for example, which employee benefit might be added or dropped to save costs while providing the highest psychologically valued option.

3. Evaluation

a. Cost Benefit Analysis

i. A comparison of the monetary benefits for a prior action divided by the monetary investment for that prior action. If $1.5 million was created from an investment of $1 million, than the ROI is 50% (as it yielded 1.5 times the initial investment)

1. Can be used to compare different types of actions that produce different types of outcomes, such as a program that reduced employee drug abuse versus a program that increased employee engagement

b. Cost Effectiveness Analysis

i. A comparison of the monetary cost to produce a specific outcome. If one program to reduce drug abuse cost $100 per prevented workplace incident while another program to reduce drug abuse cost $85 per prevented workplace incident, than you know which yielded the more effective use of money

1. Cannot be used to evaluate programs for different outcomes

c. Techniques for understanding uncertainties within estimate values for costs/benefits

i. Sensitivity Analysis: Examines what attributes affect estimated value (utility)

1. For example, the monetary value of improving an employee selection process depends on the validity of the selection process in predicting successful hires, the average passing rate for applicants taking the selection process, and the monetary value of improved performance beyond that of the prior selection process

ii. Break Even Analysis: inserts assumptions for each of these attributes using the minimum agreed value of each

1. To avoid endless debate, the analysis might assume a validity coefficient of .25, and average passing rate of 60%, and a value of improved performance of 20% of average salary for the job in question.

2. If using these minimum values, the benefits of the change more than pay for the costs, then any improvements in these attributes (e.g., higher validity) would just improve ROI.

a. Note that this technique can also be used as a decision making process if there is research or prior knowledge about the change/improvement effort BEFORE it is implemented at this particular company.

Click here to read how to estimate ROI for an employee survey.




 

This content is protected by the 1976 Copyright Protection Act of the United States of America. The proper citation for this blog is as follows: Mastrangelo, P. M. (date posted). Title of Post. The First Domino, available at http://the-first-domino.blogspot.com. This post is not intended to represent any person or organization other than Paul M. Mastrangelo.

What Should Happen After an Employee Survey?

You’ve administered the employee survey across the business, interpreted results with comparisons to external benchmarks and historic trends, and presented findings with the executive team. You have given managers access to reports and you thanked employees for their input. What happens next? You know that good things won’t just happen because of the survey itself, but have you really set anything into action? Responsibility may have been cascaded to other managers, perhaps as part of balanced scorecards. The HR team probably provided training about the importance of employee engagement and communicated that the line and functional leaders have to “own” their data. Some managers might be planning to run focus groups, but often these are complaining sessions. Indeed, some managers will plot action in isolation from employees. Still other managers will rationalize their results or point the finger at vague concepts like culture or morale. All of these post-survey activities, intentions, and musings will likely be forgotten in a month or so when the next crisis emerges and “real work” draws management’s attention. If that happens, then the promise of organizational change will disappear into the file drawer along with the PowerPoint presentations and action plans until it is time to survey again. There has to be a better way. If the employee survey is to improve business results, what should happen? Here are three emerging best practices that may turn your current understanding of surveying on its head.

1. Focus on business outcomes instead of survey scores. With all the graphs, tables, and comparisons created to analyze survey results, what gets lost is the fact that there’s a business to run. No matter how many scores are below benchmark or how many concerns the employees raise, the actions that will endure long enough to spur behavioral change are the ones that are most associated with business opportunities and threats. Anything else will be cast aside eventually as a distraction. Some will argue that the survey calls for work-life balance committees or recognition programs or pay increases, but do other metrics suggest that these are adversely affecting business performance? Are you losing impactful talent in impactful roles, like the software engineers in R&D who are supposed to roll out a critical new product? If that’s the case, then some or all of these “gaps” should become goals. However, if no other metric validates what the employees say in the survey, then the need for action is low. (Note there still could be a need for reaction, such as explaining the circumstances and/or sharing the metrics that tell a different story.)

 Once the survey results have been analyzed with survey benchmarks and organization trending, put those data aside for a short while and bring out the strategic goals for the business. Then, ask “Are there scores and cuts of data from the employee survey that will provide me with the employees’ point of view for how we will achieve these goals?” For example, if releasing game-changing products is the way your business is going to differentiate itself, then what are the R&D employees saying about staffing, resources, and the link between goals and day-to-day work? What are the customer-facing employees saying about the relationship with customers, the ability to solve their problems, and the prevalence of a customer service attitude throughout the organization? Do these two groups have similar patterns of survey scores, or do they see the organization quite differently? Do prior sales numbers and customer feedback help explain the pattern of employee survey data?

 2. Focus on a targeted set of employees to affect the whole instead of using everyone to affect parts. The employee survey usually involves feedback from all parts of the organization, and analyses often start with the aggregated scores that represent everyone. This holistic approach can help diagnose the organizational health, but to accomplish a strategic change, you will need people who perform different roles to change in different, but coordinated ways. It is great to hear the president of the organization communicate a broad vision and goal for the organization, but rarely is there a process for coordinating how different functions will cooperate to achieve that outcome. Typically, functional heads will treat the employee survey as a reason to set function-specific goals, often pertaining to engagement levels and communication (perennial favorites). Yet, it would be better to prioritize a cross-functional action planning session before moving to siloed actions. In theory the functional heads should be able to accomplish this coordinated planning, but often people in the trenches have a better understanding of problems and some novel ideas about solutions. So let the functional heads develop coordinated goals designed to attain the holistic outcome, and then have a separate and targeted set of employees across levels and functions determine how to accomplish these coordinated goals. As general Patton once said, “Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.”

 One paradox of organizational change is that leaders want to lead it while followers (the engaged ones) want to be involved with it, and yet change initiatives are rarely successful. A remedy to this situation is to assure that the leader works with the right team of employees. A surprisingly simple and effective technique is to have this team nominated by their peers, much like the arrangement between a democratic leader working with the representatives of the citizens. This nominated team need not be a permanent fixture, but it should be maintained long enough for members to understand root causes that need to be overcome and to create methods of achieving the goal. This team need not be the ones to implement the actions, but they should be working closely with those who are executing, and they should use their relationships with those who nominated them to explain how and why the actions are designed to take effect. Likewise, these relationships with other employees allow team members to get honest feedback about what is working and what is not. A peer-nominated team is designed to assemble respected, knowledgeable employees pertaining to the desired outcome—a team whom a leader can trust and collaborate with. Note that the coordinated actions that are most strategic need not affect all employees – sometimes changes among a small set of employees can impact the entire organization. Nevertheless, all employees can be involved in the nomination process, and all employees should be kept up to date on goals and progress.



3. Focus on accomplishments instead of activities. Progressive organizations monitor progress on action plans to sustain change efforts long after the survey was administered. This is a great concept, but sometimes the process leads to “checking the box” rather than continuously focusing on improvement. Managers, most of whom have a shortage of time and resources, typically design one and only one action to achieve a goal, and they are typically held accountable for accomplishing that action rather than achieving the goal. Even when managers are held accountable for reaching the goal, it is usually based on a survey metric (e.g., raising the survey scores by 5 percentage points). Thus, if a manager makes an attempt but does not move the needle, there is evidence of effort and the unreached goal is not seen as the crucial work. This situation would change drastically if the goals were business oriented with a monetary value (e.g., reducing the number of product updates within three months of a new release in order to save $700,000 in staff hours and customer returns). In this scenario there would be multiple action plans executed until the goal was reached, and failure would be difficult to excuse.



Expecting multiple action plans may seem like additional work, but when the focus is on business metrics, the plans should be seen as necessary and existing work that is laid out as a series of experimental actions designed to attain a desired outcome with the least amount of resources invested. One very successful pharmaceutical sales leader worked with employees to create actions according to three timeframes. Initially, plans described 3 minute actions, which required no budget or coordination, but just agreement to make the easy “low hanging fruit” changes. Because these changes were likely to be superficial, they were followed up by 3 month actions, which required more coordination and time to execute. The idea was to use the 3 minute actions as a means to communicate commitment to solving the business problem and to build support for the 3 month actions. If the goal is still not achieved, then plans may require 3 year actions, which are more systemic and far-reaching across functions and levels in the organization. Throughout the entire process, employees are kept informed of successes and failures, lessons learned and remaining questions. This “experiment until it works” approach, involving leaders and nominated employees, demonstrates a relentless focus on achieving the goal that was raised by employees through the survey. Continuous post-survey actions build a high performing organization that produces business results, and the employee involvement creates engagement as a byproduct. Leaders, employees, and the survey director all notch wins on their belts.




This content is protected by the 1976 Copyright Protection Act of the United States of America. The proper citation for this blog is as follows: Mastrangelo, P. M. (date posted). Title of Post. The First Domino, available at http://the-first-domino.blogspot.com. This post is not intended to represent any person or organization other than Paul M. Mastrangelo.

Beyond Gladwell's "Maven-Salesman-Connector" Model: Personalities that Start Change

This post is an excerpt from my chapter "Creating Infectious Change in Global Organizations: Applying Psychology to Large-Scale Planned Interventions" from the 2010 book Going Global: Practical Applications and Recommendations for HR and OD Professionals in the Global Workplace, Edited by K. Lundby & J. A. Jolton (Eds.), New York: Jossey-Bass.  This excerpt can be downloaded here.


Evidence Based Psychological Theories of Behavioral Change


Psychological research shows that individuals change their own behavior in predictable ways, suggesting that social environments can be designed to promote behavioral change. The most basic “learning” and “motivational” theories are well known and follow the same basic pattern. First, individuals attain feedback that alerts them to wants and needs. They may look inwardly to realize that they are dissatisfied with their current state, but often this evaluation has a social context. Next, individuals decide to act on one or more of these wants and needs. There is a general tendency to satisfy basic needs (physiological, safety) before addressing more complex needs (social, esteem, or actualization: Maslow, 1987). Finally, individuals take action and behave in a manner that is intended to satisfy their wants and needs. The actual action is selected because it has worked before (classical conditioning, operant conditioning), it has worked for someone else before (vicarious learning, modeling), or it seems like it should work (expectancy, VIE). However, evidence based psychological theories of behavioral change go beyond this foundation, and there are four well supported theories that can be used to change organizations. Each is described below, and the last section of this chapter combines elements from these theories to suggest practical techniques for creating infectious organizational change.


Personality Domain Description

[Table 1. The Five Factor Model of Personality].


Individuals Are Predisposed to Play Different Roles During Organizational Change. In any given population there will be some individuals who are relatively more adaptive to change, some who are more anxious about change, some who are more influential in changing others, and some who are more likely to be influenced to change. Although more complex than Gladwell’s Maven-Salesman-Connector description, personality theory also suggests that employees have different roles to play in an organizational change initiative. Decades of empirical research have led to the Five Factor Model (FFM) of personality, which uses five broad domains to describe a person’s behavioral tendencies that distinguish the individual’s identity (see table 1). While each of these five domains can be broken down into subparts, generally personality boils down to a person’s degree of Extroversion, Agreeableness, Conscientiousness, Emotional Stability, and Openness to Experience. The FFM has not only been rigorously validated (e.g., McCrae & Costa, 1987; Goldberg, 1990; Barrick & Mount, 1991), but it also has been found applicable across multiple societal cultures (Howard & Howard, 2001; Rolland, 2002). As a result the FFM provides an empirically supported set of profiles or roles that can be used to cast an infectious change.


Some individuals are prone to search for novel, unfamiliar experiences and would be classified as scoring high on the Openness to Experience domain. Because these individuals are biological recipients of more dopamine and dopamine receptors in their brains (Howard & Howard, 2001), they display more curiosity and exploration in their thoughts and behaviors. They are willing to change for the sake of change, and they tend to be bored in the absence of change. Thus, employees who are very open to experience are more likely to adopt newly prescribed behaviors. If these new behaviors are likely to create uncertain consequences for the employees, then the most perseverant individuals will likely be those who are relatively high on Emotional Stability, meaning that they tend to be calmer in stressful conditions. A recent study suggests that individuals who have low Emotional Stability have such a high need for certainty that they actually prefer definitive bad news rather than uncertain but possibly good news (Hirsh & Inzlicht, 2008). So, it would seem that only certain employees are prone to be the first to change their behavior to match a new standard, especially with uncertain consequences for making the change.


Making these few early adopters’ changes infectious, however, calls for two further circumstances to hold true. The first condition involves Extroversion. Some portion of these early adopters need to be extroverted enough to be perceived as influential (cf. Gladwell’s salesman role), and some portion of the individuals being influenced need to be extroverted enough to pass on the new behavior to others as being worthwhile (cf. Gladwell’s Connector role). Extroversion marks a person’s need for sensory stimulation, it is mostly expressed by the need to be with other people, and it is positively related to a drive to lead other people (Howard & Howard, 2001). It follows that the more extroverted the early adopters are, the more likely that they will be seen as charismatic leaders whose behavioral changes will be imitated. The same holds true for the “early imitators” who first follow the leader and replicate the behavioral change.


It is this distinction between the leader and the follower that highlights the second condition for infectious change. Those early adopters who are subsequently imitated are challenging the established behavioral norm and any social pressure that exists to maintain that norm. Likewise, many of those early imitators must also challenge the status quo. Yet, at some point in a successful intervention, change becomes the norm, meaning that subsequent imitators are not so much challenging others as they are accommodating others. Again, the FFM indicates that individuals have different predispositions for challenging or accommodating others. Individuals who score lower on Agreeableness scales tend to be more comfortable with conflict, more willing to express their own opinions, and more apt to stand out from the crowd. So, extroverted early adopters with below average agreeableness have the right profile to start a small counter-culture. Conversely, individuals who score high on Agreeableness scales tend to avoid conflict, let others “win,” and go with what the crowd wants. Combine these tendencies with high extroversion and high openness to experience, and you have the profile of those who can make that counter-culture more mainstream.


[Figure 1: Individual predispositions to organizational change roles.]

To create the psychological equivalent of a domino effect, one needs some assertive individuals to push on others, but one also needs compliant individuals who will fall into place. While individuals are not always consistent with their personality in all situations, personality does represent individuals’ default tendencies. As illustrated in Figure 1, I posit that an employee’s role in an organizational change initiative can be predicted through the eight possible combinations of dichotomous scores on Openness to Experience, Extroversion, and Agreeableness. By first harnessing the power of Instigators to publicly change their behavior to influence their social networks and then relying on Ambassadors to make this behavioral change widely acceptable, an infectious change movement can spread from the Open-Minded Swing Voters and the Disenfranchised to the more accommodating Guardian groups. While popular personality assessments (e.g., NEO-PI-R, Myers-Briggs Type Indicator) could be used to identify Instigators and Ambassadors, I will discuss in the last section of this chapter how a peer-nominated team will allow these influential early adopters to rise to their necessary position for a successful intervention. Given the cross-cultural validity of the FFM (Howard & Howard, 2001; Rolland, 2002), there is no reason to believe that these profiles would be any less useful outside of the US.

Please support the editors/authors of these related books:

"Creating Infectious Change in Global Organizations: Applying Psychology to Large-Scale Planned Interventions" from the 2010 book Going Global: Practical Applications and Recommendations for HR and OD Professionals in the Global Workplace, Edited by K. Lundby & J. A. Jolton (Eds.), New York: Jossey-Bass. 

Gladwell, M. (2000). The Tipping Point: How Little Things Can Make A Big Difference. New York: Back Bay Books.

 
This content is protected by the 1976 Copyright Protection Act of the United States of America. The proper citation for this blog is as follows: Mastrangelo, P. M. (date posted). Title of Post. The First Domino, available at http://the-first-domino.blogspot.com. This post is not intended to represent any person or organization other than Paul M. Mastrangelo.

What JFK and George Carlin Teach Us about Change

Just because two people use the same exact word, do not assume that they mean the same exact thing. As a consultant I find myself interrupting discussions fairly often by saying something like “Wait a minute. When you say ____, I think you mean ____. Is that what you mean when you use that term?” It’s amazing how well this technique brings misunderstanding to light. Not only does this question help clarify the term at hand, it also makes the participants of the meeting aware of the diversity in the room. We begin to talk about different points of view, and we ask more questions of each other when a new idea emerges. We go on guard against ambiguity and fine tune our topic until there is a specificity that we believe will be equally well understood by others who are not present in the current meeting. As a result we use language that is much more precise than when we first sat down.

Specificity is particularly important when defining a change initiative's desired outcome – the unambiguous criteria for success. One of the best examples of communicating a specific desired outcome is President Kennedy’s 1961 speech to a joint session of congress, where he launched the space race with the Soviet Union:

I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth. – John F. Kennedy, May 25, 1961

Kennedy used but 31 words to specify his bold criteria for success. In a world yet to know home computers, cell phones, microwave ovens, handheld calculators, space shuttles, or even American astronauts, the audacity of his goal for a manned lunar landing and safe return within 9 years’ time is incomprehensible to most of us now in the 21st century. It’s almost laughable. It took a year of internal debate before NASA even finalized how such a journey should be accomplished. The money spent to advance science and technology to meet this goal was about $23 billion, which is more like $230 billion in today’s economy. This endeavor, now commonly called the biggest technological achievement in the history of the human race, captured the attention and imagination of a generation. There was never a popular song written about the space shuttle or the Hubble telescope or the international space station, but we will always have our Rocket Man and Major Tom to remember the race to the moon. A generation lost in space, indeed.

It all started with a 31 word desired outcome. Ironically, this concise statement was part of a 5,800 word speech that outlined a variety of new initiatives and goals for the United States, and from my reading no goal was articulated so precisely as the moon mission. My guess is that Kennedy wanted the congress (and the country) to commit to nothing less than this dramatic outcome because he knew that obstacles might lead to cuts and scale backs. He wanted a big splash - well, splash down - to restore the world's confidence in democracy even as communism was becoming more prevalent. Look at this excerpt from the same speech:

I believe we should go to the moon. But I think every citizen of this country as well as the Members of the Congress should consider the matter carefully in making their judgment, to which we have given attention over many weeks and months, because it is a heavy burden, and there is no sense in agreeing or desiring that the United States take an affirmative position in outer space, unless we are prepared to do the work and bear the burdens to make it successful. If we are not, we should decide today and this year. This decision demands a major national commitment of scientific and technical manpower, material and facilities, and the possibility of their diversion from other important activities where they are already thinly spread. It means a degree of dedication, organization and discipline which have not always characterized our research and development efforts. It means we cannot afford undue work stoppages, inflated costs of material or talent, wasteful interagency rivalries, or a high turnover of key personnel.

Note that this part of the speech does not demand that citizens and the congress blindly commit, but that they consider whether they will commit. Going to the moon was not a change mandate, but a change request. As we know the country did commit, and the outcome was achieved on July 20, 1969—when Neil Armstrong and Edwin “Buzz” Aldrin walked on the moon while Michael Collins remained in lunar orbit—through July 24, 1969 when the three astronauts safely splashed down in the Pacific Ocean. Mission accomplished. One might argue that the costs were too high or that the value provided did not merit the investment, but no one can deny that we achieved the desired outcome. You need to have that same level of specificity, the clearly understood definition of success, when you are planning to change a group, organization, or community.

What Do You Mean by Change?

I put a dollar in one of those change machines. Nothing changed. – George Carlin

Unfortunately, “change” is a term that most of us use in a very sloppy fashion. Often we do not include an object of the change, as in phrases like “change is hard.” Changing what is hard? It was not so difficult to change from telephones with dials to ones with buttons. It was not so painful to move from manual transmissions to automatic transmissions in cars. Are people kicking and screaming about tablet computers, which have neither an external keyboard nor a DVD drive? Clearly some changes are decidedly easy for us to adapt to.

Maybe you have heard the phrase “we have to change to survive.” Change what? If you are talking about bodily adaptations to viruses, then I guess this is a true statement. However, my neighbors who do not have cable or satellite TV seem to be getting along okay. Actually, one still has dial-up internet service, meaning they must use their phone line to receive emails or access the web—the horror! I had to remind my computer engineering friends that when new operating systems and software are released, my 10 year old computer still turns on and runs the old applications I purchased. The Amish people in the US and the African tribes isolated from present day society prove that it is possible for people to survive while actively trying not to change. Clearly some changes are not as necessary as we are led to believe. You have to be careful to specify what it is that you intend to change.

Even when we do speak of changing something, we are often vague or conceptual. Maybe we discuss “changing people’s attitudes” or “changing the culture.” One problem here is that it is difficult to judge when attitudes or cultures have changed or have changed enough. There can easily be disagreements about how to measure the change. Worse than this, using abstract terms allows different individuals to make different interpretations and, therefore, triggers a collapse in goal alignment. Individuals start shooting at diverse targets, and even though each member might feel like he or she is supporting the effort, the reality is that the coordination is breaking down.

So, when you endeavor to "create change" in a group large or small, take some time to consider the specifics:

• What is the behavior or status that you want to change? Can it be visualized consistently by others?
• What is the clear definition of success? How would another leader know if your goal was achieved?
• What outcomes might approximate your desired outcome, but should be deemed unacceptable?
• What is the target date for completion? Is that date challenging, but acceptable to others?
• Did you create time for dialog about accepting the goal? Did you publically list obstacles and politics that will need to be overcome?
• Did you schedule time in your process for individuals to determine how they should contribute to the collective goal? How will this stage start, be revised, and be completed?

Perhaps not immediately, but eventually, others will need to see how their change in behavior links to the ultimate outcome that you are seeking to attain. If you use fuzzy language to define desired outcomes, you will end up with the same result that George Carlin did – nothing changed. Get it right, and the moon is yours.



This content is protected by the 1976 Copyright Protection Act of the United States of America. The proper citation for this blog is as follows: Mastrangelo, P. M. (date posted). Title of Post. The First Domino, available at http://the-first-domino.blogspot.com. This post is not intended to represent any person or organization other than Paul M. Mastrangelo.