Corporate Culture, Organizational Health, and Human Potential: Reflections for Leaders
by Joel & Michelle Levey, Chairpersons, The Center for Corporate Culture & Organizational Health, at the Institute for Health & Productivity Management and Founders of InnerWork Technologies, Inc.
Article for Employee Assistance Professionals Association (EAPA) Journal the EAPA Exchange Jan/Feb 2000
In recent years we have had the privilege of intensively researching the vital and profound relationship between organizational culture, business results, and the health and productivity of employees. This work, funded by the Institute for Health & Productivity Management, was supported by a council of respected advisors representative of a broad spectrum of industries. In this brief essay, we’d like to offer a glimpse of some of the most significant findings of this research, and some insights regarding the profound implications and challenges for EAP professionals in these times of cost cutting, outsourcing, and fierce competition.
As former clinicians, and consultants to business for over 20 years, we are acutely aware of the enormous costs associated with the preventable personal and interpersonal distress of people in the workplace. EAPs have traditionally responded to many of these factors, but usually only after they reach a critical level, i.e., when the “canaries” have already, or are about to, fall out of the “cage.” Yet potentially far greater costs are incurred due to unrealized opportunities. These opportunities include: promoting the health and vitality of people in their short but precious lives; attracting and retaining remarkable people who thrive through the synergy of their work together; and ennobling the creative spirit of people capable of tapping the intuitive intelligence necessary for breakthroughs in innovation, that not only advance our bottom-line business agendas, but do so in ways that create a better world for all stakeholders.
In the old economy, it was a buyer’s market and companies had their pick of the best talent. But in our new economy, it is a seller’s market in which companies compete to find, attract, and retain the best people. In a recent survey of large U.S. companies by the American Management Association, more than half of the respondents said they had recently lost so many talented people that their ability to compete in the marketplace had been severely compromised. Especially in the high-tech industry, employee turnover due to fierce talent wars is, in some companies, running as high as 30% each year (Fisher, 1998). Given estimates that the costs of replacement of highly skilled workers can run up to 200% of the employee’s salary, plus the incalculable costs of losing valued employees — especially to the competition — the incentive for attracting, satisfying and retaining the valued employees is — or should be — of enormous importance to employers.
By the year 2010 the population of workers ages 35 to 44 is expected to decrease by 15%. As a result, many companies are beginning to take a more serious and disciplined look at the principles and science of retention and talent management. With the increasing demand for managers and experienced employees and the shrinking supply, organizational leaders are wrestling with critical questions like, “How can we develop our cultures to attract, evaluate, reward, and retain the best people?”
Dennis Zeleny, VP for Human Resources at Allied Signal reminds us that, “While things like job satisfaction, a sense of connectedness to the group, the ability to balance life and work, and the opportunity for growth may sound hokey, the art and science of retention shows us that these factors, as intangible as they may seem, are critical to business success.” (Branch, 1998) Pfeffer echoes this sentiment is his masterful work The Human Equation saying that, “The implementation of high performance or high commitment work systems requires … a serious commitment to doing things differently … It is almost impossible to successfully implement high performance or high commitment work practices in the absence of mutual trust and respect. But trust is missing in many employment relationships — and … the atmosphere in the work place is crucial. All work place practices and changes should be evaluated by a simple criterion: Do they convey and create trust, or do they signify distrust, and destroy trust and respect among people?”
Bottom line evidence and anecdotes abound to support these statements. Fortune’s “100 Best” companies to work for are more likely to have cultures in which trust flourishes, and have half the turnover rate (12.6% vs. 26%) and nearly twice the applications for employment of companies not on the list. (Work & Family Newsbrief, 1999)
A recent Gallop poll of 55,000 workers matched employee attitudes with business results. The study concluded that the following four attitudes, when considered together, showed a strong correlation with higher business profits:
- Workers feel they are given the opportunity to do what they do best every day.
- They believe their opinion counts.
- They sense that their fellow workers are committed to quality.
- They made a direct connection between their work and the company mission.
These findings are supported by a poll of 10,300 employees in the U.S., Europe, Russia, and Japan that identified the five qualities most desired by employees:
- The ability to balance work and personal life (which ranked either the most or second most important attribute.)
- Work that is truly enjoyable.
- Security for the future.
- Good pay or salary.
- Enjoyable coworkers.
More than two thirds indicated that they’d be willing to leave their company for such opportunities. (Work & Family Newsbrief Managers Quarterly, 1999.)
Considerable evidence suggests that leaders and businesses that understand and respond to both the complexities of the business environment and to the basic needs of their people consistently outperform their less wise competitors by 30% to 40%. (Pfeffer, 1998) This holds true for all industries, regardless of their type, size, or age. As leaders, our task is to develop organizational cultures with the strong foundation of trust and mutual respect necessary for almost super-fluid communication. We are challenged to maintain a priority on promoting synergy, high performance teamwork and organizational learning, through building a sense of community, and developing individuals with the “emotional intelligence” or EQ necessary to sustain quality working relationships so vital to both personal and organizational success.
Inspired Leadership-The Leader’s New Work
Leadership and human relationships play a key role in organizational success. An excellent summary of 14 studies on the relationship of employee satisfaction and business performance concluded that the single largest contributor to the feelings of employee fulfillment, empowerment, and satisfaction lies in the day-to-day relationship they have with their organization’s leaders. Depending on the industry, employee satisfaction accounted for between 10 percent and 88 percent of the variability in job productivity and performance. Managers who demonstrate a sincere concern for their employees’ well-being, who make a personal investment in developing their people, who value the connection between individual work activities and the greater good, will have happier, healthier, and more productive employees.
John Seely at Xerox reminded us that, “The job of leadership today is not just to make money, it’s to make meaning. This is especially true when it comes to attracting, keeping, and creating teams out of talented people. Money alone will not suffice in this task. In today’s market, intelligent and talented people are looking for organizations that offer not only money, but an opportunity. Talented people want spiritual goals that energize an organization by resonating with the personal values of the people who work there, the kind of mission that offers people a chance to do work that makes a difference. Along with the traditional bottom line, great enterprises have a second bottom line: a return on investment that advances a larger purpose.” (Reich, 1998)
There is a quality of wisdom, initiative, compassion, inner-work, and personal discipline modeled by leaders we’ve met who are capable of stewarding an organization in which these noble ideals and wise business practices can flourish in a sustainable way. Each of these inspiring men and women has demonstrated an understanding of and commitment to modeling and promoting the synergy of deep change at the personal level and deep change at the organizational level. These leaders embody the spirit of this integration as reflected in Dee Hock’s often quoted challenge to leaders:
“Here is the very heart and soul of the matter of leadership: If you seek to lead, invest 50% of your time (attention) leading yourself — your own purpose, ethics, principles, motivation, conduct. Invest at least 20% leading those with authority over you, and 15% leading your peers … Use the remainder to induce those you “work for” to understand and practice the theory … If you don’t understand that you should be working for your mislabeled “subordinates,” then you know nothing of leadership. You know only tyranny … Lead yourself, lead your superiors, lead your peers, and free your people to do the same. All else is trivial.”
As we lead our organizations into a new millennium we are certain to encounter the challenges of fierce competition, increasing stress, cost cutting, outsourcing, and a myriad of complex changes and challenges in global business. Yet amidst it all, the core values and needs of people who do the work remain universally consistent. Millennia of experimentation in social architecture and organizational design, medicine, and peak performance remind us that only by honoring our basic human needs for safety, security, trust, respect, quality communication and supportive relationships, meaningful challenge, and the creative influence of our work, will we ever optimize the ability of our organizations to promote health, satisfaction, passion, and bottom-line success through our work. Employee Assistance professionals have a key role to play as stewards of both the human frailties and the untapped human potentials present in our people and organizations. The far reaching benefits to be realized are worthy of our investment.
Branch S. You can hire ‘em. But can you keep ‘em. Fortune. Nov. 9, 1998, pp 247-250.
Pfeffer J. The Human Equation: Building Profits by Putting People First. Boston: Harvard Business School Press, 1998.
Reich RB. The company of the future. FastCompany. Nov. 1998; 124-150.
Work & Family Newsbrief. Fortune’s “100 Best” have cultures of trust and pride. Feb. 1999a:1.
Work & Family Newsbrief: Managers Quarterly. Workers worldwide want work-life balance. Jan. 1999.
Joel Levey, Ph.D. & Michelle Levey, M.A., serve as Chairpersons for The Center for Corporate Culture and Organizational Health at the Institute for Health & Productivity Management (IHPM.org). They are founders of InnerWork Technologies, Inc., a Seattle and Hawaii based firm dedicated to developing and renewing organizational cultures in which team spirit, community, creative intelligence, life-work balance, and inspired leadership can thrive. They are co-authors of numerous books including: Living in Balance; Wisdom at Work; Community Building in Business; The New Bottom Line; and Learning Organizations. Email: email@example.com. Phone: (206)632-3551.