The Power of Culture

Happier employees are more productive
In part two of this management series, ABJ’s Antonia McGuire studies the intertwined relationship between an organization’s culture and their employees’ productivity. In speaking with experts, McGuire discovers a clear link between chronic fatigue and the implications to the bottom line. Read on to find out what managers can do and why North Americans have much to learn from those living Down Under.

Ashleigh Craig* followed her passion and accepted a job at small consulting firm specializing in green design in a major city, bordering the Great Lakes in North America. With flexible hours, the draw of being in a big city near nature and a goal to promote sustainable development, she found the work rewarding—at first. After awhile, however, the 29-year-old business development manager realized a pattern forming in the organization’s culture: the firm’s shoestring budget and heavy workload required its employees to take on extra work without being compensated for the overtime, and time off was discouraged. Now, she is among the several millions of employees who are overworked and unmotivated to reach their company’s goal.

Gone are the days when chronic fatigue just affected shift workers, like miners and truckers. In today’s 24-hour global work environment, getting the most from your employees is paramount to being successful. Frontline managers must tow a very fine line between pushing employees to high production standards, and pushing them to the point of burnout. More about how to spot this area of concern and what you can do later; first, let’s take a look at the relationship between culture and productivity.

How culture affects productivity

Studies show there is a direct link between an organization’s culture and employees’ productivity.  As one former corporate suit-turned productivity expert Peggy Duncan explains:

“If you have an environment where employees are allowed to be creative and their input is valued then, they are going to make for happier employees. I think happier employees are more productive.”

Measuring productivity, however, is tricky because it is interlinked with the unpredictable value: human behavior. “[CEOs] don’t have time to lead and [managers] don’t have time to supervise; they don’t have time to manage because everyone is so overworked and overstretched. If you focus on the core responsibilities, then you build more time to be the visionaries to go forward,” tells Duncan.
 
From the C-level suite, productivity is viewed as the art of getting the company’s products and/or services to the customer at the lowest possible cost. But it is also closely related to quality, employee relations and customer needs. In other words, productivity and good management go hand-in-hand. Essentially, productivity is a result of motivation, and motivation thrives in a good climate, whereas the culture of an organization, typically referred to as “behavior patterns and standards that bind a team or company together,” can either encourage or hinder productivity, as pointed out in a white paper published in The Canadian Manager, a Journal of The Canadian Institute of Management (July 2005).

An organization’s culture should not be confused with a good climate because, more often than not, a climate is the short-term mood of an organization. Unlike culture, it is fragile and subject to change. If management is to transform this fragile good climate into a long-lasting culture for success, it will have to focus on listening to recommendations by employees or customers.

But this clinical explanation only begs the question: when it comes to an organization’s culture and its impact on the bottom line, to what degree does identity have anything to do with it?
 
And that’s exactly what researchers at the Harvard Business School wanted to find out.

Many employees improve processes and procedures, suggested new products or new ways of doing business, observers Jim Heskett, Harvard business professor and author of the Ownership Quotient: Putting the Service Profit Chain to Work for Unbeatable Competitive Advantage (2008). Heskett and fellow co-authors Earl Sasser and Joe Wheeler studied a group of organizations who were successful in fostering employee and customers who may be regarded as having an “ownership mentality.”

“Organizations like Wegmans Markets, Rackspace Hosting and Build-A-Bear Workshops have solicited and received a number of ideas for improving their businesses from both customers and employees,” tells Heskett in an interview.  “An owner, in the sense I’m speaking of, has a value many times that of a more typical employee or customer, so it only requires three or four percent of an organization’s employees or customers possessing an owner’s mentality to create the momentum that carries an organization to higher performance levels,” assets Heskett. This management technique can be spotted in organizations in which employees put the welfare of the company at the same level as their own, sometimes more so. “There’s a pattern that you observe when looking closely at organizations that are quite successful in achieving this [type of] identity,” adds Heskett.

Case study: Container Store

First of all, Heskett explains, these organizations hire fewer but better people. David Glass, CEO of Walmart, used to express his preference for fewer people, better paid with bigger jobs who “will win every time.” For example, The Container Store has been rated by employees—or at least, for the last 10 or 11 years—as one of the Best Places to Work in the U.S. The Container Store staffs at minimum levels with better people, paying them significantly above market. According to Heskett, “they spend a lot less time recruiting those people because they select themselves into that kind of organization.” Instead, companies like The Container Store use its resources to select from people desiring to join whose beliefs and expectations coincide with the organization’s values and beliefs. “With fewer people, they get the same results as organizations with larger numbers of employees, achieving higher productivity as well as other benefits.”

Case study: South West Airlines

Another example is South West Airlines, he adds. “In 2008, they had over 200,000 applications for about 4,000 jobs. What they do spend money on is selecting the right people out of that huge pool of people interested in working for them,” says Heskett, adding that applicants are attracted by Southwest Airlines’ reputation as a great place to work.

But do these practices promote productivity?  Yes, but Heskett objects, to the use of the term as it is usually defined.  As he puts it, “productivity measures crudely the tangible aspects of great places to work.  What it doesn’t measure are such things as the benefits of employee engagement and loyalty, customer satisfaction and loyalty that it produces, and ultimately levels of ‘ownership’ which may have much more value than mere productivity as it is typically measured.”

Adaptive cultures fosters innovation and productivity

His fellow Harvard colleague, Marty Linsky, co-author of The Practice of Adaptive Leadership says, “management should maximize resources within a measurable productive zone.” This concept of adaptive leadership was first coined by the three co-authors in their book, The Practice of Adaptive Leadership: Tools and Tactics for Changing Your Organization and the World (Harvard Business Press, 2009).  

In an economic climate where CEOs are running leaner companies, burnout is a real and present risk in today’s workplace. While signs of depression or anxiety are often red flags of a more serious problem, chronic fatigue is a good example of a stand-alone condition that adversely affects the health and productivity of employees. Marty Linsky et al describe workplace pressure with a cooking analogy: if the heat or temperature of the pressure-cooker is too high, you will get burned.

The key is for managers to keep a finger on the thermostat to monitor and control how must pressure is applied. If the heat is too low, the quality or ingredients of the food may not transform properly and will have no chance of becoming a good meal, or end-product. If the temperature or pressure is set too high, however, the cover will blast off the lid and risk the ingredients of spilling over. People in authority are expected to have a handle on the lid to watch the heat and pressure, Linsky et al point out.

Fatigue management

The Ownership Quotient co-author Heskett says suggests that the answer lies in recognizing that strong, adaptive cultures can foster innovation, productivity, and a sense of ownership amongst employees and customers. That can produce great employee and customer loyalty as well as strategic labor cost advantages. High ownership organizations can be demanding places to work. There are tactics, however, that successful organizations utilize to deal with the heat and potential exhaustion.  Heskett suggests, for example, that “one of the ways successful organizations do this is to give teams a great deal of autonomy (within limits) and encourage them to assume management responsibility.  They can be very creative in selecting new team members, training them for multiple jobs that prevent that chronic fatigue, and making sure that peer pressure works to the advantage of the team.”

Productivity expert Duncan agrees training is of the utmost importance for teams to succeed. With limited resources to push through a heavy workload, Duncan argues, employees must learn how to work smarter.

“Despite a weakened economy, this is not the time to cut more jobs, but rather the time to invest in your talent, your people,” she says, adding in doing so, employees learn quicker and become more productive.

In other words, CEOs and frontline managers need to learn a new set of skills—adaptive leadership skills—to not just survive but thrive in today’s new economy.


Aussies do it best
 
When it comes to understanding this relationship and managing it effectively, it seems as though Australians are ahead of North Americans. “Effective fatigue management strategies should be considered essential in order to minimize associated risks and maximize safety, performance and health, meanwhile reducing the cost burden or your bottom line,” according to a white paper published by Health by Design, an Australian consulting firm.
 
“Beyond simply looking to get the most value from your employees and fulfilling your health and safety requirements, you should consider a fatigue management plan for the benefit of your employees and the community at large,” the Australian white paper argues, pointing out corporate social responsibility and integration are evolving concepts.

One concept in particular that forward-thinking companies are latching on to is educating their employees and providing a nurturing work environment that enables work-life balance. The result: happier, healthier and more productive employees. “It’s a huge a win-win situation for you, the community and your company’s most valuable asset—its people,” as highlighted in the report.

A new Australian study found that so-called, ‘leisure browsing’ or ‘surfing the Internet for fun at work—within reasonable limit of less than 20 percent of their total time in the office—are more productive by about 9 percent,’ according to the study’s author, Professor Brent Coker, from the University of Melbourne’s Department of Management and Marketing.

Business strategy embedded in work culture is key

In his latest book with the working title, Unleash the Productivity in Your People, author Bill Schneider argues that companies must be clear with customers, make sure everyone in the organization is clear about the promise, build a culture that is in line with that promise,” tells Schneider, who is also CEO of Corporate Development Group. “Culture unleashes or facilitates the accomplishments of your business strategy or promise to the customer.

Maintaining an equilibrium is equally as important, especially in organizations filled with knowledge-based workers, such as scientists, IT or financial experts, in order to avoid an environment where they get in the way of a company’s success,” argues  Schneider. “If you allow that expertise to go too far, then people stop working with one another and they start to get arrogant. When things go too far, it becomes a major impediment to productivity,” Schneider continues.

He asserts a prime example of his point is what happened on Wall Street five years ago. He believes the organizational system on Wall Street was allowed to go too far off balance. “Because there was so much money to be made, because they had build vehicles for making a lot of money, the majority of people had no idea what they were buying. They built in the seeds to their own destruction. Productivity was simply out of existence,” he says.

Productive organiz-ations have advantage

Although it is hard to say definitively whether or not U.S. productivity overall is going up or down, many experts would agree that having a strong organizational culture leads not just to cost-savings, but also to maintaining a competitive advantage in the market. “What we do know is that productivity in these organizations that are able to enlist employees and customers in the mission of the organization are enjoying higher productivity,” says Heskett. He adds that this is an important competitive advantage.

“It is one that organizations will recognize as increasingly important in going forward,” he says.

How to become more productive

With CEOs running tighter ships after the pink slips have been handed out, employees are often left behind with greater responsibilities for additional tasks on top of their own. “These employees often have to figure out how to get their work done plus the work their former co-workers used to do,” says Peggy Duncan, a former corporate suit turned-productivity specialist. “It’s possible to get more work done with fewer resources or without causing burn-out with long hours, but you’ll have to make some changes first,” she explains. Read the tips below on how to improve productivity in your workplace.

Think it through instead of just thinking it up. Before you implement another idea you just came up with, think it through first. Poor planning destroys morale and causes productivity to plummet.

Eliminate time wasters. Have employees identify at least three ways management wastes their time and do the necessary work to fix it. Also have employees identify the top three things they do to waste time and hold them accountable for changing.

Clean up the mess. Hold a massive cleanup or throw out campaign to help de-clutter the office space, including: desks, file cabinets, computer files, and your inboxes on a daily basis. Create a system that will make it easy and quick for anyone to find anything. This is especially important for teams that rotate jobs on a regular basis.

Streamline processes and bureaucracy with employee ideas. Implement a suggestion plan for all employees to improve processes and procedures. Then reward and publicize the ideas from individuals or teams that work.

Invest in training—regardless of the job. Don’t expect people to already have all the necessary skills they need. Offer training, from email software to management styles. With the right training, they’ll finish the work quicker with fewer mistakes.

Reduce time spent in meetings. Have meetings standing up, right before lunch or near the end of the day. Have an agenda to stay on topic and on time. When it’s over, ask if the purpose of having the meeting was met and hold people accountable.

Change your email culture. Know when to pick up the phone. Too many people are drowning in email due to bad habits. Change habits such as “replying to all” unnecessarily, using the inbox for storage with hundreds or thousands of messages, sending messages that do not relate to the subject line, and flooding inboxes.

Communicate clearly. Before you delegate a task, make sure you have a clear understanding of what you want to happen. You’ll want to give an overview with the purpose, explain the specifics, be clear about the result, and empower the employee to make decisions. AB
Peggy Duncan is a personal productivity consultant and coach and founder of The Digital Breakthroughs Institute, a training firm in Atlanta, Georgia. Duncan is also the author of The Time Management Memory Jogger.

*This name has been changed to protect the individual’s privacy.

www.PeggyDuncan.com

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