In our last blog, we spoke about the source of innovation – human creativity. If human creativity is the seed of innovation, organizational culture is the soil in which it must germinate and grow. While this may sound a bit lyrical coming from an engineering and medical products development firm, it’s actually grounded in scientific research. Research exploring the relationship between employee engagement and financial performance driven by innovation and new product commercialization.
For well over twenty years, Gallup® has been conducting their annual workplace engagement survey. The results are dismal. Gallup’s most recent report on the subject reveals only 15% of employees are actively engaged with their employer, meaning they show up with passion and purpose in their work.i The other 85% are either disengaged, meaning they’re simply going through the motions, or actively disengaged, meaning they’re actually working at cross purposes with their employer and fellow associates. Even worse, the level of employee engagement is eroding. As short as ten years ago, Gallup reported 28% of employees were actively engaged with their work, nearly twice as many, percentage-wise, as today.
Research going back as far as 2005, and reported in the Harvard Business Review, clearly demonstrates a strong correlation between company performance and employee engagement.ii The nuance lies in the type of engagement…what matters is emotional engagement. Emotionally engaged employees create emotionally engaged customers. In fact, additional research demonstrates that customer emotional engagement is a significantly more important driver to financial performance than “customer satisfaction”.iii
Before we fall back to that old adage, “When coming to work, leave your emotions at the door”, let’s look a bit deeper. Research from the field of Applied Behavioral Economics has revealed 80% of all economic decision making is based in emotions, with the remaining 20% grounded in cognitive thought.iv It turns out how people feel is a much more significant driver of behavior than what they think. Let’s reflect for a moment on how this may impact a knowledge worker’s (e.g., an engineer’s) decision to exercise discretionary effort (an economic decision on their part) on a development project?
We should also consider the seminal work of Dr. Jaak Panksepp, one of the fathers of Affective Neuroscience. All mammals share something called our Core Mammalian Emotional System.v It’s an evolutionary part of our primary survival mechanisms. All mammals share four Blue Ribbon Emotions; Fear, Panic, Rage…and Seeking. While the first three seem obvious, the last one, seeking, is not commonly appreciated. Organizations that promulgate a culture of fear (internal hyper-competition for promotions, stretch goals that creep into the unattainable range, etc.) get very predictable outcomes: erosion of discretionary effort, diminished creative thinking, apathy, politics and associate disengagement. Conversely, organizations that propagate a culture that encourages seeking, also get very predictable results: engagement, creative thinking, collaboration and discretionary effort, the brass rings of innovation.
The last piece of the cultural puzzle has to do with values…shared values. Ever since the days of Alfred Sloan, the man that created General Motors and invented what we think of as the modern Corporation, Western companies have embraced the use of extrinsic values to drive performance. Extrinsic values – money, power, prestige, acquiring the corner office – only work in monocultures. Think of the Type A personalities of the Baby Boomer generation that still dominate our cultural landscape…they personify extrinsic values. Extrinsic values are about as useful as a buggy whip in today’s multi-cultural, multi-generational, global workplace. Today, we must look to leverage intrinsic values: authentic relationships, purposefulness, being of service to others and feeling like we’re a part of something bigger and more important than ourselves. Why? Because intrinsic values transcend cultural and generational differences. Intrinsic values resonate within us all.
Engineering firms have traditionally focused on developing their technical expertise…of having a high degree of applied engineering granularity. What differentiates REV.1, and perhaps what we’re most proud of, is we’ve applied that same level of granularity to developing a culture that is unique to the industry…a culture of engagement and innovation.
Manage Your Human Sigma, Flemming, J.H., Coffman, C., Harter, J.K., Harvard Business Review, July-August, 2005.
“Predictably Irrational”, Dr. Dan Ariely, Harper Perennial, New York, 2010.
“Affective Neuroscience – The Foundations of Human and Animal Emotions”, Dr Jaak Panksepp, Oxford University Press, London, 2004.