Most companies put substantial effort into reaching their goals and strategic priorities. Many CEOs lie awake at night wondering about their competitors plans and if the company’s products and services are customer centric enough to enable growth plans as well as profitability targets.
We know what it takes for CEOs and other executives to be able to sleep well: they need to work on the continuous improvement of both processes and relationships. In our database containing roughly 70 000 managers, I see that 35% of all managers are fully engaged while 44% are only satisfied. One might think that it should be enough for managers to be satisfied in order to perform well, but that is not the case. For managers to “walk the extra mile” for their employer and be a liaison between management and the rest of the organization they need to be fully engaged. Hence, the satisfied managers offer a great opportunity for companies wanting to boost their performance.
We know that engaged managers also show higher profitability. In our study, from the summer of 2014, we tested various correlations between relationships and profitability. What we saw was a clear connection between leadership and profitability. The teams with managers scoring excellent on leadership showed a profit of 10% and teams where managers showed inferior leadership skills only reached break even. We made our first study to investigate these correlations back in 1990 and have made many since. Last year’s study involved around 200 operational units where we ran data on leadership, work environment, employee engagement and customer loyalty against profitability. That internal relations affect the profitability is quite clear, how much and what the drivers are vary between different companies.
The consequence of satisfied managers rather than fully engaged ones is that it poses an obstacle for companies looking to change or continuously improve. Changes take longer to implement or fail to be realized at all. The extra energy that is needed to successfully achieve change may be missing and the potential for higher profitability or increased customer loyalty is lost. We know it’s easy to say that leadership is important but it is most definitely harder to do something about it and make change happen. Therefore, we looked at common drivers behind managers’ engagement and what the most important factors are to impact their engagement levels. They were:
- I develop in my work
- My boss is clear about what is expected of me
- We follow up the work of our team
- I can influence my work situation
- My performance reviews are developing
- I think the company is managed well
It is obvious that good leadership requires leadership. I think many managers’ managers assume that managers motivate themselves. Obviously there are various structures and organizational conditions that limit managers’ ability to manage their managers. Even so, I would highlight the importance of managers’ managers devoting time and energy to strengthen the engagement levels of the managers across all organizational levels. For every manager that strengthens their engagement and leaves the mellow “satisfied” engagement level to “fully engaged”, you will significantly increase your organizations ability to reach your goals, and at greater speed.