How to drive Employee Engagement

One of the most commonly discussed topics, and a real priority for many organisations right now, is how to engage and motivate their teams, and retain top talent. In this article we delve into the research and uncover the most effective ways to drive employee engagement.

Looking back at 2019 across all of the conferences we attended, the books we read, and the podcasts we listened to one of the most popular topics was on how to motivate teams to drive transformation and employee engagement.

Intrinsic and extrinsic rewards

Daniel Pink’s ideas around “Autonomy, Mastery, and Purpose” from his book Drive kept cropping up. He suggests that contrary to popular belief, extrinsic rewards do not effectively motivate your team. These are physical and visible rewards such as bonuses or gifts (typically going hand-in-hand with the old carrot-and-stick approach). Instead, he suggests that in order to inspire your team and encourage innovation, engagement, and ultimately increase productivity, you need to look to intrinsic rewards to make a real impact. These are rewards that are personally satisfying to the individual, which we’ll explore below.

Autonomy

What is it? Empowering your employees to make their own decisions and prioritise their workloads, based on the strategy and direction of the organisation, which should be clearly communicated to them. When employees understand the context of why they are working on a particular task, and how this aligns to the overall strategy, they should be given the freedom to plan their work accordingly and come up with their own ideas of how to solve problems.

This has a huge impact on creativity, innovation, and job satisfaction. In particular, autonomous teams that can collaborate to find a solution or test a new theory, tend to make a real positive impact on an organisation. Using their understanding of the ‘why’, and their knowledge of the subject matter that they are experts in, to uncover solutions senior management may never have considered independently. 

A study conducted at Cornell University looked at 320 small businesses, half of which used a traditional Command and Control management style, and the other half gave their employees autonomy. The autonomous companies grew four times faster, AND they experienced one-third less staff turnover.

Even as early as 1980, psychologists Richard Hackman and Greg Oldham studied employee engagement and developed The Job Characteristics Model following a study of 658 employees – which is still widely used today:

Figure 1: Job Characteristics Model

 

Autonomy is crucial for real change to happen within an organisation, from all levels, not just within senior management teams. It’s crucial to retain top talent, foster a creative and innovative culture, and enhance productivity and growth. However, employees must be protected with psychological safety, where they feel safe to take risks and be vulnerable, and failing is acceptable in order to learn and adapt.

Mastery

What is it? An understanding employees’ strengths and weaknesses, and providing opportunities for them to harness their skills while adopting a ‘growth mindset’. Mastery is another intrinsic motivator as most people relish the opportunity to get better at what they do and become experts in their field.

Pink discusses what he calls ‘Goldilocks tasks’; the ideal middle ground for your employees where they are not tasked with projects that they are unequipped for (which could be overwhelming and frustrating), nor are they too easy (which could be boring and demotivating). The middle ground is where they can challenge themselves and develop their skills and experience through learning and practice.

Pink discusses in an interview with Harvard Business Review the two key discoveries from his research into mastery:

  1. Feedback – not just feedback from your boss on personal development and progress, but feedback from your learnings. This means reviewing what you have worked on over the last sprint or quarter, how it has impacted the outcomes you are trying to achieve, which initiatives should be paused vs which could do with further investigation/resources/budget, and what you could do better next time. The feedback should come from all members of the team, in a safe environment for open and frank discussions, and should be for the purpose of improving on your next sprint or quarter to help you get closer to achieving your end goal. Regular feedback loops for teams are so crucial – they provide the opportunity to learn from past mistakes, identify successful initiatives, and be agile enough to make swift changes as and when required.
  2. Habit formation – most people tend to change habits over a longer period of time, so when you are given the resources to grow and enhance your skills, you won’t see immediate change and become an expert the next day. Over time you will see the results of your development and new habits that you have naturally acquired as your knowledge grows.

Purpose

What is it? Aligning your teams to the company strategy so that they understand the bigger picture, why they are doing what they are doing, and working towards something bigger than themselves.

Pink argues that this is the biggest motivator with the biggest impact on productivity, job satisfaction, and engagement. It’s what gets you up in the mornings, motivated at work, and inspired to do better.

A study by Imperative found that 58% of companies with a clearly articulated and understood purpose experienced 10% more growth than those without one. It also found that 73% of purpose-oriented people are satisfied with their jobs. These results were consistent globally.

Deloitte conducted a study on employee engagement and found that “mission-driven” companies have 30% higher levels of innovation and 40% higher levels of employee retention, while also being first or second in their market segment.

To truly establish purpose in their company culture, businesses should change their focus from output (the endless tasks that need to be completed, with no measurement on how they impact the business) over to outcomes (success looks like an increase of X, so let’s work on Y tasks to see if they help us meet that target). Employees can then understand not only the outcomes that they are trying to achieve for their own teams, but the outcomes for the company as a whole and how they are contributing towards it.

The era of intrinsic rewards is already here

There is countless literature to support that extrinsic rewards are outdated and don’t work in the modern world. If we look to the most successful global organisations we can see that most, if not all, have already implemented these policies and are reaping the benefits. Many of these organisations, including Google, Amazon, Netflix, Deloitte, Spotify, and many, many more, use OKRs (Objectives and Key Results) to implement this framework.

Whichever methodology you choose, remember that this is a long-term and ongoing transformation that will not be achieved overnight, but will drive real growth, innovation, and employee engagement when done properly.

 

Published by: Tima Bouqdour

Date: 15/01/2020

 


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J3T CEO and Co-Founder Kim Atherton interviewed by TedxBristol

OKRs, Ted Talks, TedxBristol

J3T CEO and Co-Founder Kim Atherton interviewed by TEDxBristol to discuss the challenges of traditional organisational structure and how this hinders innovation and employee satisfaction.
Kim delves into the benefits of cross-functional teams, and how re-structuring your organisation can break down silos, add value to your customers, and engage your employees.

Watch the full interview below:


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Listen Now: “Turning the Tanker”

Want to download instead? Right click and press save here to download.


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Webinar: The Customer-Centric Company: Focusing Teams on Outcomes vs Deliverables

For your convenience, the webinar is now available on-demand:

Listen Here

 

Blockbusters; Nokia; Toys R Us – history is littered with examples of organisations too slow to adapt to change. Large enterprises are fully aware of the burning platform to become more nimble – in fact 82% of global enterprises have embarked on a strategic re-design in the past 3 years*. However the focus is typically internal – on systems, processes, ways of working and organisational design, rather than measurable outcomes.                  

Catch up as Kim Atherton, Co-founder & CEO of Just3Things, leads a candid conversation with thought leaders from Worldpay and The Guardian, as well as renowned business advisor and author Barry O’Reilly, on why starting with customer outcomes is essential if your transformation is going to succeed, and your organisation survive.

*McKinsey, Jan 2018

Outcomes, OKRs, transformation

Tanya Cordrey has previously worked in several sectors including ecommerce with eBay & eToys, financial services with Zopa as well as the BBC. Until the end of 2015, she was Chief Digital Officer at Guardian News & Media, playing a key role in the digital transformation of The Guardian into a global brand with more than 150 million unique users each month. Tanya now sits on the boards of various companies, such as Clarks, and runs innovation and product consultancy Granary Square.

 

 

 

Outcomes, OKRs, transformation

Spiros Theodossiou is SVP Product Management for WorldPay’s Global Enterprise. Prior to Worldpay, he was VP at vouchercodes and at Skrill Inc. where he led the product and design teams and focussed on agile methodologies to quickly and efficiently deliver features that customers love.

 

 

 

Outcomes, OKRs, transformation

Barry O’Reilly is the author of two international bestsellers Unlearn: Let Go of Past Success to Achieve Extraordinary Results, and Lean Enterprise: How High Performance Organizations Innovate at Scale—included in the Eric Ries series, and a Harvard Business Review must read for CEOs and business leaders. He is an internationally sought-after speaker, frequent writer and contributor to The Economist, Strategy+Business, and MIT Sloan Management Review and faculty at Singularity University.

 


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Breaking Down Silos: Where do we start?

Breaking down silos is no easy feat, but some fascinating research from McKinsey’s most recent Five Fifty shows that CEOs “indicate two primary symptoms of silo syndrome: (1) inadequate information and (2) insufficient accountability or coordination on enterprise-wide initiatives”. 

As many of us may have read in Gillian Tett’s excellent The Silo Effect – wherein she shares multiple tales of what she terms ‘silo syndrome’, from City Hall in New York, to UBS bank in Switzerland, and Sony in Tokyo, even the most effective and motivated leaders in the world exhibit unproductive and uncooperative behaviour when they are ‘mastered by silos’. Others, however, show how institutions and individuals can master their silos instead. Here at Just3Things, we’ve been focused on the death of the functional silo for several years, working hard to build a platform for teams of all disciplines to use to align not only daily and weekly workstreams, but truly empathise with each others’ challenges and skill sets. Some of our tools focus on really practical measures, such as incorporating company-wide goals on all team pages inside the platform; whilst others are more complex, asking users to pro-actively declare alignment of their initiatives and objectives to their business’s strategy. 

Helpfully, McKinsey has broken down the four key measures that they have reported as effective in breaking down silos.  We thought it might be interesting to take a look at each of these measures through the lens of our clients’ experiences, and the many conversations we’ve had around the realities of cross-functional collaboration:

 

breaking down silos, okrs, okr

  1. Get Informed about the Business Context:

    Employees and teams that remain overly-focused on the delivery of projects as opposed to taking the time to understand the underlying customer problem driving that piece of work are at greater risk of under-estimating new competitive threats.  At J3T, we find this issue manifested in a very tangible way when we ask new users of the platform to begin to align their team objectives to the overall corporate strategy. By default, we find many users will simply leave their objectives “ungrouped”, indicating that there is, in fact, some real confusion about why even significant programmes of work are being undertaken at the team level.

     

    breaking down silos, okrs, okr

  2. Get Transparent with your Customer Data:

    Far too often, functional silos don’t just extend to difficulties in sharing marketplace research from team to team, but also to the inability to intelligently leverage key customer contacts and data from multiple databases and sources.  At J3T, we often hear that clients are most delighted by the feature we offer that automatically surfaces projects or initiatives that are similar to ones you are working on in the right hand rail of the platform itself. Why is this so impactful? Clearly, marketing and customer experts – all with the best of intents – have been duplicating customer acquisition, service and marketing efforts for years and there are far more optimal ways for us to be leveraging our valuable customer databases to ensure these inconsistencies don’t happen.

     

    breaking down silos, okrs, okr

  3. Rotate Your Talent:

    By now, we all know that one of the defining hallmarks of Millenials and Gen Z in the workplace is their desire for intrinsic rewards by accumulating a broad range of skills and experiences across a greater number of professional roles and industries throughout their careers.  To ensure you are engaging your employees by listening to those aspirations and acting on them, managers must be aware of the future assignments and team constructs that their talent might want to be a part of (and not simply make the assumption that every employee is seeking a direct promotion in their current function!).  Here at J3T, we firmly believe the first and most essential step in exposing curious employees to opportunities in new functions and departments is to build transparency into the reporting of key initiatives at all levels of the company. In our platform, every employee can view the key priorities of any team across any function and learn the names, titles and job descriptions of the key players driving those priorities forward in an effort to democratise the traditional act of “internal networking”.

     

    breaking down silos, okrs, okr

  4. Drive Accountability Across Small Teams:

    Finally, we know that once the initial steps are taken inside the enterprise to break down the traditional barriers of functional silos, often what are formed are smaller, more diverse teams of cross-functional specialists.  These “squads” (as they are sometimes called) are more ideally-suited to directly addressing customer issues by focusing on outcomes over outputs, but in order to ensure they remain focused on a scope of outcomes that is manageable and actionable, they must be given more autonomy to test and deliver. Distributing accountability to networks of small teams as opposed to the top layer of a traditional hierarchy is one of the most culturally challenging – but absolutely essential! – transformations that all J3T organisations grapple with. 


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Outcomes Over Outputs – Interview with Barry O’Reilly; sought-after speaker, author and business advisor.

Managing Outcomes Over Outputs is more than just semantics.

One of the most consistent observations we have made here at Just3Things when working with our clients is the exponential difference in organizational culture, productivity and effectiveness when leadership and teams manage outcomes over outputs.  

We spoke to one of the leading experts in this field, Barry O’Reilly.   Barry is the author of recently released Unlearn: Let Go of Past Success to Achieve Extraordinary Results, and co-author of the international bestseller Lean Enterprise: How High Performance Organizations Innovate at Scale  — included in the Eric Ries series, and a Harvard Business Review must read for CEOs and business leaders. 

He works with many of the world’s leading companies, from disruptive startups to Fortune 500 behemoths, to break the vicious cycles that spiral businesses toward death by enabling culture of experimentation and learning to unlock the insights required for better decision making, higher performance and results.

 

Barry O'Reilly, okrs

 

J3T: Hi Barry! Let’s start at the beginning – what is the difference between outcomes and outputs?

Barry: It feels deceptively simple but can make a huge impact on how you, your teams and organization perform:

Outputs are what you expect to ‘produce’, the products, goods and services which result from an intervention.

Outcomes are quantifiable changes in behavior you will have caused due to the output you created.

 

Output 

Outcome

Launch newsletter signup Capture contact information of 25% of site visitors 
Certify 50 scrum masters  Reduce user story cycle time by 50% 
Invest $1,000,000 in online marketing campaign  Increase user activation rate per application download from 20% to 50% 
Add feature for ‘$50 Gift For Friend Signups’ to our user product page Increase our user growth rate by 20% in the next three months
Deploy scripts to automate software release to cloud infrastructure Reduce lead times for software releases by 50% 

 

J3T: So why is it better for teams and organisations to define Outcomes over Outputs?

Barry: An outcome is the level of performance or achievement that occurred because of the activity, product, good or service your organization provided. More specifically, the change in customer behavior that occurred. Outcome measures are a better indicator of effectiveness than output measures. For example, if you completed the activity on time, on budget and in scope, but no customers use your product, would you consider the effort a success? Outcomes quantify and assess how the product or process you created enable customers to achieve the impact they are aiming for. 

Spending the time to define outcomes over outputs is always trickier but gives lots of advantages, including:

 

  • Allowing teams to create a shared understanding of why they are working on an initiative and what success looks like. 
  • Open up options for how teams could achieve the outcome they are aiming for. 
  • Increase the meaningfulness of work because teams can tie their efforts to results and gauge if they moving towards the desired outcome they seek (or not).
  • Creating more of an experimental approach – defining customer outcomes and asking teams to take responsibility at this level opens up the opportunities to experiment with outputs. Did X move the dial? No? In which case let’s try Y.
  • Balancing the need for long term planning with a ‘test and learn’ approach. Most large enterprises are adopting agile or lean ways of working based on the promise of delivering better customer outcomes faster — yet the majority still measure output as success. It can be daunting for stakeholders who are used to annual planning cycles and predictive controls such as time, budget and scope to switch techniques to manage uncertainty. Defining outcomes help engage stakeholders in valuable dialogue on what behaviors they expect to see from customers as indicators of success over planning every feature that they will release that year with little real insight and limited customer feedback if they are useful, valuable or even needed. Ask stakeholders what they expect customers to be doing differently as a result of the output you create, then measuring and monitoring this can be a great way to help them get started. 
  • Not creating a culture of ‘busy fools’ – in many output driven organisations we see lots of activity and people working really hard, but without stopping to ascertain whether what they are doing (output) is creating any value for the customer or organisation (outcome) until the output is full complete. Our mission should be to learn as quickly and cheaply as possible if our effort is driving the results we’re aiming for.

 

Teamwork, meeting, okrs


J3T: Sounds great! So how do organisations start?

Barry: I encourage teams to think big but start small, and learn fast as they explore how to deploy an outcome-based approach to their portfolio of work. Don’t change everything all at once — start small, tiny in fact. Identify one product, or new feature or backlog item, start there by trying the following:

 

  • Keep asking ‘why are we doing X’ – for example why are we releasing this feature? What difference will it make and to whom? What change in customer behavior do we expect to see? 
  • Don’t get hung up searching for the one perfect metric or baseline data — start where you are and define what customer behavior you would expect or would be different if the output was available to the world.
  • Try to measure rates and ratios over totals — aiming for a percentage increase is better than saying ‘we can’t define this outcome and so we will see if we can get five customers use it’. Instead, say ‘60% of customers must use the feature to test its valuableness, and support an experimental approach’
  • Don’t forget that outputs can also be constraints to foster innovation – we typically think about outputs as a control metric (e.g. deliver this project with $1,000 or release this feature by this date) which force feedback cycles to happen, and reflect on our results. Use output metrics within reason as a forcing function for innovation, for example an outcome a customer success team might be responsible for could be increasing customer retention by 20% in the next month. 

 

J3T: What do you see as the key challenges to organisations shifting to outcomes over outputs?

Barry: One of the biggest challenges is that people are so used to managing to deadlines, budget and scope that they don’t know how to measure value in any other meaningful way. 

When I present the idea of looking at outcomes they can see the benefit but don’t know how to start writing outcome based measure of success — it is daunting. 

Another barrier is trust between ‘business’ and technology stakeholders in organizations. Sometimes business partners can feel that you are trying to trick them, plus they feel comfortable managing outputs because it’s the way they have always managed initiatives. 

When people are time poor, the pressure is high and they have been sold new process as the way to succeed, their appetite to experiment is much lower. This is why thinking big but starting small is key, and showing people how the method works could be a better approach. The breakthrough comes by working, learning and unlearning together. Review your existing initiative dashboards, notice if the measure is all output or outcome based. Try to identify and introduce one new outcome based measure on your dashboard that you can use as a pilot for a new way of working — then scale from there.

 

What if the metric is a lagging indicator?

When people start to embrace outcomes over outputs they often use metrics such as revenue, profitability and customer satisfaction as a measure of success — but these are all lagging indicators. 

Businesses and teams need to think about how to also create leading indicators as the outcomes they are aiming for, and behavior they know mean the customer is on the path of success.

For example, at Netflix increasing revenue through customer retention of the service is a key outcome for the business. But if you’re working there, waiting each month for customer retention results, and even collerating your work to such a top line metric such as customer retention, is challenging. 

That’s why creating leading indicators for the outcomes you are aiming for is important and more actionable for the team. Therefore, if you’re working on the Search team at Netflix, and know retention is important, you can ask a question such as, “what customer behavior in search would be a leading indicator for retention?” Maybe you’ll say the lead time from searching to starting a movie. You can then model and measure how quickly people can search for, discover and start a movie via your search functionality and see if that impact lagging indicators like retention rate of those customers. 

This takes work and skill but ideally you would look at a mix of leading and lagging indicators— you need to be thoughtful and have checks and balances. But getting started is the first step, so start small and learn fast what works for your context. 

 

outcomes over outputs, okrs

 

What other behaviours can stand in the way of teams focusing on outcomes?

Leaders struggling to devolve decision making – or on the flip side, teams being afraid to make decisions. 

The incentives in place in a business make a huge difference too – leaders can say that the team should experiment, try out their ideas to succeed and work together toward outcomes, but if leadership behavior shifts when bonuses are on the line, or paid out to individuals on completion of projects on time, budget and scope, this is totally mixed messages.

For me, the trick is to find  the cadence for your context; how do we get into the rhythm of making smaller more frequent bets and outcomes with leading indicators, rather than creating big upfront plans with the output predicted in terms of time, budget and scope ? Every company has different requirements for different levels of fidelity of plans, and some of this will also vary by stakeholder. 

Figure out how best your teams can keep stakeholders updated with the bets that they have made and whether this has moved the dial on the outcome metric you’ve agreed together. This is a very different way of working than planning everything out at the beginning of the year, but the benefits you can realize in terms of organizational culture, productivity and effectiveness once you learn can be extraordinary.

 

J3T: We hear a lot about psychological safety – how important is this?

The quality of safety in organisations will directly impact the quality of information that you get. 

Ensuring that individuals and teams know how to design safe-to-fail bets is important to enable and make sure they feel they can learn from mistakes. How openly and honestly teams can and are willing to share their learning, so that others can jump up the learning curve more quickly, is an outcome every organization and leadership team should be aiming for. 

You can think big, start small, and learn fast tomorrow by asking your teams: ‘on a scale of 1-10, how safe do you feel to share open and honest information?’ Accept the score they give, and start small to improve. Ask what you can do as a leader to help improve that score by half a point. Pick one suggestion for a week, try it and learn what works and what doesn’t. Role model your efforts to unlearn outdated behavior and thinking as you seek to create a create of experimentation and learning to help others succeed. 

 

Barry O'Reilly Unlearn

 

To learn more about Barry you can;

 

Read Barry’s blog at: www.barryoreilly.com

See what he has to say on Twitter: @barryoreilly

Subscribe to Barry’s podcast at: www.barryoreilly.com/podcast

Join Barry’s newsletter at: www.barryoreilly.com/newsletter


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Transforming Volkswagen Financial Services

Inspirational CIO, Christian Metzner, is transforming Volkswagen Financial Services to deliver better customer outcomes, faster.

A couple of weeks ago I was lucky enough to be invited to join VWFS’s two day PI planning session, alongside SEACON organiser Barry Chandler. I found the sessions hugely inspiring – the team were hugely excited about working in new ways to deliver value to their customers faster, and Christian placed huge emphasis on the importance of culture in achieving these aims. Read Barry’s blog about the two days here… 

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Webinar on Organisational Transformation

Organisational transformation programmes in the financial services industry are notoriously difficult and time-consuming. Whilst young, disruptive Fintechs are able to operate nimbly, responding quickly to market trends and consumer demands, the same cannot be said for traditional, global corporations.

We discuss the challenges, and how to overcome them, with two experts that have successfully introduced change to their departments.

Sandy Scales, organisational transformation
Sandy Scales
Head of Agile Adoption
Royal London
Aaron Clift, organisational transformation
Aaron Clift 
Head Of Digital Strategy, Portfolio and Innovation
Royal Bank of Scotland
Kim Atherton, organisational transformation
Kim Atherton
Co-founder & CEO
Just3Things

 

If you’re interested in hearing from experts at Royal Bank of Scotland and Royal London about the realities of organisational transformation, you can access the recording below.  Topics we tackled included getting employees “comfortable with the uncomfortable”, coaching leadership on how to “hold their nerve” in the face of setbacks, the road to building additional capacity as a business.

Give it a listen and drop us a line if you have any questions.

 


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How do Co-Founders meet?

In the modern workplace, careers are not so straightforward. The Economist featured Kim & Erinn’s journey together in becoming Co-Founders of Just3Things (spoiler alert – like all successful relationships, it is all about having similar values).