Employee Engagement 2.0

Kevin Kruse
Kevin Kruse,
Author,
Employee Engagement 2.0

Excerpted from Kevin Kruse’s book, Employee Engagement 2.0

Steven Slater. Remember the name?

It was August 9, 2010 when JetBlue flight attendant, Steven Slater, decided to quit his job in spectacular fashion.

After having some kind of altercation with a passenger, upon landing Slater cursed everyone out over the PA system, grabbed two beers, deployed the inflatable emergency slide, and slid down to freedom.

Employee Engagement

It became the most infamous job resignation in history. But what’s amazing isn’t the crazy incident itself, but rather what happened afterward.

Within 24 hours Steven Slater dominated the news. “Felon or working class hero?” screamed the headlines. He topped Twitter trends and his Facebook page quickly gained 182,000 fans. Late night talk show host, Jay Leno, filled a monologue with Slater jokes: “The pilots were furious. That was their last two beers.

Clearly, the Steven Slater incident touched a nerve of popular culture. It’s as if everyone—not just HR professionals and organizational experts—understood that people everywhere are unhappy and stressed out a work.

  • Worldwide, only 13% of employees are engaged at work according to Gallup data.
  • But what the heck is “employee engagement” anyway?

Let’s first talk about what it’s not.

Engaged doesn’t mean happy. Someone might be happy at work, but that doesn’t mean they’re productive. In fact, they could be happy because they don’t have any work to do, or because they can waste hours playing Candy Crush all day.

Engaged doesn’t mean satisfied. This is a big misconception. Someone can be satisfied at work, but only satisfied enough to be a clock-watching nine-to-fiver. They can be satisfied, but will still take the call from the recruiter who is promising them a 5% bump in pay. Satisfied isn’t enough.

Here is the definition of engagement:

“Employee engagement is the emotional commitment an employee has to the organization and its goals.”

When employees care—when they are engaged—they use discretionary effort, they go the extra mile. It means:

  • An engaged salesperson will sell just as hard on Friday afternoon as she does on Monday morning.
  • An engaged customer service representative will try just as hard to delight a customer at 5:00 p.m. as she does at 10:00 a.m.
  • Engaged factory workers will have fewer accidents and be more productive.

If CEOs truly understood the difference between “happy” and “engaged” employees they would care a lot more about engagement.

Right or wrong, most CEOs care more about investor returns than anything else.

The good news is that employee engagement is the secret ingredient that actually leads to a higher stock price.

  • The most engaged companies had five times higher total shareholder return over five years, compared to the least engaged companies, in a 2009 study conducted by Kenexa.
  • Engaged companies have 6% higher net profit margins, according to a Towers Perrin 2011 study.

How does engagement lead to a higher stock price?

The answer is what I call the Engagement-Shareholder Value Chain.

Engagement-Shareholder Value Chain mbm

CASE STUDY: The Campbell Soup Company

Once upon a time, in the year 2000, the Campbell Soup Company was in big trouble.

The company that began in 1869 and sold soup in 120 countries hit a wall. Sales weren’t just slowing, they were declining. Campbell lost 54% of their market value in just one year. Campbell’s executives were told that their employee engagement levels were the worst ever seen among the Fortune 500.

So the board of directors hired a new CEO, the mild-mannered Douglas Conant, to turn things around.

What do most CEOs do in dire situations?

They might sell off divisions, buy smaller competitors, move into new markets, or maybe even hire investment bankers to evaluate “strategic options.”

But that wasn’t Doug Conant’s style.  A Forbes magazine article quoted him as saying:

“To win in the marketplace … you must first win in the workplace. I’m obsessed with keeping employee engagement front and center.”

So quarter after quarter, year after year, Conant made sure that employee engagement was one of the top initiatives for the Campbell Soup Company.

By 2009, the ratio of engaged employees to disengaged employees reached an astounding 23-to-1.

More importantly, in the decade that saw the S&P 500 stocks lose 10% of their value, Campbell’s stock actually increased by 30%.

In other words, “keeping employee engagement front and center” helped Campbell’s to achieve four times greater results for investors.

book-EmployeeEngagement
Want a free copy of the book, Employee Engagement 2.0?

For instant download go to: kevinkruse.com/freebook

Kevin Kruse is a New York Times bestselling author, keynote speaker and entrepreneur who previously won both Best Place to Work and Inc. 500 awards.