Some Jazy Thinking - Part 1

Jack and Suzy Welch (whom I shall henceforth refer to as simply “Jazy”) have a column in BusinessWeek titled “Ideas the Welch Way.” In the colum Jazy sets out to identify the three most meaningful measures of a company’s health.

The three measure they propose are:

1. Employee engagement
2. Customer satisfaction
3. Cash flow

Let’s take the next three days and examine these a little more closely. Jazy's responses provide a great platform for exploring some ideas that are near-and-dear to my heart and that I have not as of yet explored fully (except cash flow - more on that in two days).

Today… Employee Engagement

Jazy explains that if you want to know just how engaged your employees are then you need to collect an “anonymous survey at least once a year.” But this answer is too pat to be of any real use. Most survey’s do not contain the real information needed to asses what is really going on (or be predictive in any meaningful way). Here I humbly propose four better ways to gauge employee engagement:

Voluntary Turnover – Just a wild guess, but people who leave your company probably aren’t engaged.

Involuntary Turnover – If you are firing a lot of people, the remaining ones probably aren’t engaged. In fact, they are probably looking for work before they are next.

Employee Referrals –It is probably safe to assume that employees that try to get their friends to work at their workplace are pretty engaged. The validity of this metric is inversely proportional to the budget. In other words, the more money you give people to get their friends to the company, the less you can infer any potential engagement by the act. This isn’t to say that you shouldn’t pay bounties and such. It is to say that if you are giving away BMW’s for someone who refers their friend, you really can’t infer that they refered their friend because they are engaged. What your employees actually do (absent of any external stimulus like a bounty) is the best indicator of engagement. So I believe that every employee should have a heat report. If you don’t see red, you don’t see engagement. (You’ll have to wait until tomorrow to see what I mean.)

Pop Quizzes – Yes, pop quizzes. Go to any employee and ask them three questions: “What is the company’s strategy? What is your part in making it come true? Why is important to you?” Anybody who can’t answer these three questions with some level of depth and enthusiasm is not committed. They may like where they work. They may enjoy their coworkers. But they aren’t “committed”, because it is not possible to be deeply committed to something you don’t understand, at least not over any extended period of time. Without commitment there is no real engagement. And why can’t you accomplish this via a survey? Because surveys are quantitative and these are qualitative questions. You are not looking for a “right” answer. You are looking for a meaningful, passionate answer. Who knows? Their answer may be right in the future.

I didn’t research this thoroughly, and I am quite sure there are people with a deeper OD background who can tell me that these are sub-par compared to other methods and metrics (Martin? Colin?). But I am sure that the data you get from these methods will be more predictive of the “health” of your organization than responses on a survey, no matter how Jazy it may be.

Comments

[Colin Kingsbury]

I think your ideas are right on-target actually. Measuring what people *do* is always superior to measuring what they *say*. Except that it is occasionally enlightening to see the delta between them...

One metric that might also be meaningful is to look at the number of positions that are filled with outside hires versus internal promotions, and also how successful those people are one year out. Companies with more engaged employees are likely able to promote from within more successfully.