“This economic crisis doesn’t represent a cycle,” says Jeffrey Immelt, the CEO of General Electric, about The Great Recession. “It represents a reset. It’s an emotional, raw social, economic reset. People who understand that will prosper. Those who don’t will be left behind.”
We are living in the Age of Mass Customization, a term coined by Stan Davis in his 1987 book Future Perfect. The Great Recession may not be what it appears. It isn’t just another cycle, it is the grinding of gears as we shift from 100-years of Mass Production to a new real-time NOW-centric economy.
Mass Production, let’s call it THEN, was dominated by Scientific Management as man was viewed as machine and did the work the machines could not. The management class was born with the job of making sure people followed the time-and-motion mandated best practice.
The shift in the economy demands a shift in how we manage our businesses. We have moved from centralized innovation and decision making to decentralized innovation and decision making.
Could any shift be more radical? Could any shift call more loudly to leaders today that doing business as usual is no longer viable?
Mass Production management is a debilitating legacy of employee engagement, essential in a NOW economy. The Gallup Organization reports that only 30 percent of employees find their workplace engaging (meaning, they willingly take action without being told to help the business succeed). The remaining 70 percent show up and do what they are required to do and often less. And the worse news of all is that these numbers have not changed in 25 years.
The cost of this disengagement is astounding. Research estimates that crossing the chasm between disengaged and engaged adds in excess of $13,000 per employee per year to the bottom line. Employees who take autonomous action, actions they initiate without permission, improve customer experience, grow revenue and reduce costs.
Most organizations have tried repeatedly to engage their people, whether cosmetically (celebrations, espresso machines, suggestion boxes, inspiring visions and related emotion-stirring campaigns, spot bonuses, 360-degree feedback, open door policies, etc.), or authentically (reward and recognition programs, performance management initiatives, team-building, lean programs, Kaizen events, Six Sigma training, management and leadership training, employee engagement programs, problem solving training. The list of attempts could go on for a dozen pages.
James Carville, the colorful Democratic political strategist gave then presidential hopeful Bill Clinton the famous phrase, “It’s the economy, stupid.” The words stuck and many believe not only had Carville cleverly turned a phrase, but he had also turned the focus of the campaign to an issue that made the once thought unbeatable George H.W. Bush vulnerable. The rest is history.
Employee engagement is all about the system: the underlying system of management is what determines culture and yes, culture determines the degree to which employees engage. Or, as Carville might advise with regards to the failure to engage employees, “It’s the system, stupid.”
Over 30 years of working this issue as an executive and consultant, I developed the NOW Management System, which I write about in my book Business at the Speed of Now, published last month by Wiley. The system reliably increases employee engagement.