70% is a long way from 100% …

so why is it accepted as a benchmark by most leaders?

Three things you probably don’t know

  1. When rating the top five public tech organizational cultures, Google came out on top, scoring 71 out of 100.[1]
  2. When rating the best companies among women Apple scored best at 69 out of 100.[2]
  3. When minorities rated their experience, the best score was a tie at 68 for Facebook and Google.[3]

(6 minute read)

There was an article in Fast Company this week, This Is What Employees Of Companies Like Google, Facebook, And Amazon Think About Their Employers and I was struck by a constantly recurring number – “70 something.” Not exactly 70, but in that range from 65% to 75%. The reason it jumps out is because it’s consistent with numbers that Gallup and endless surveys publish about leadership, organizational development and employee behavior. So many of the research results hover around this 70% mark when it comes to important questions about what leadership is, and is not, doing. It begs the question: How did 70% become the accepted benchmark? Of course, nobody expects 100%, but “70 something” should be a red flag. And yet it’s more like a white flag for most leaders – can’t do any better.

Put another way: How did mediocre become the benchmark? Because if only two-thirds of employees are positive about something as critical as leadership,  cultural experience and respect for their company, that is a far cry from excellence – it’s mediocrity.

The firm Comparably is a company immersed in numbers and it recently published survey results comparing Google and Facebook, Yahoo, Microsoft, Amazon and Apple. These companies are some of the “best” in the world, business icons, gods of emulation, the Mount Olympus of employee satisfaction. And yet, they are still at the base camp of the employee engagement mountain, hunkered in around the “70 something” range.

A few facts, many questions

  • Google ranks 1st in Overall Culture Score at 71%: Amazon/Apple are tied at 65%. Think about that: In some of the world’s top companies, one out of every three employees does not score the culture positively. Can you imagine the level in the average company?
  • Facebook ranks 1st in CEO Score: Mark Zuckerberg is at 82%; Jeff Bezos is 5th at 72%. Good for Zuckerberg but it still means he’s coming up short with 18% of his 17,000 employees. That’s 3,000. For Bezos, he’s short with 28% of 341,400 employees. That’s 95,592. What would productivity be if he cut that in half – almost 50,000 more employees “on board” with the boss?
  • “On a scale from 1-10, how likely are you to recommend working at Google to a friend?” Google is at 45%; Facebook 49%; Microsoft is 3rd at 17%. “Recommending to friends” might be one of the best indicators of how an employee truly feels about his or her company. So how seriously does being under 50% impact recruiting, turnover and future growth?
  • The Gender Score: This tracks how positively women rate their experience: Apple is 1st at 68%; Amazon 5th at 61%. One-third of women in these so-called high-watermark companies feel under appreciated. 95.8% of the Fortune 500 are led by men. Why does cracking the glass ceiling get a lot more talk than action? (see earlier blogs: Is the gender gap an evolutionary problem? and Men should go to Mars, women should lead Earth).
  • The Diversity Score: This tracks how non-caucasians positively rate their experience: Facebook is 1st at 68%; Apple 6th at 63%. That’s shameful. Why not conduct a survey of companies run by old-white guys – maybe that’s the reason we’re mired below “70 something?”
  • Employee engagement: Gallup publishes worldwide numbers for employee engagement and it is one of the most astounding set of numbers in the workplace. The United States leads (if it can be called leading) with 71% disengagement. And at the college-educated level it is at 72%. Worldwide, the number is a staggering 13% engagement. That’s almost 9 out of 10 employees disengaged! The questions is: How the hell can any leader claim to be doing a good job and convincing shareholders that things are great when 87% of employees are not committed to doing their best?

Based on data from more than 130 countries, Gallup’s 2016 Global Great Jobs Report reveals that [only] 26% of the world’s adult population has a good job. That is, they work 30 or more hours a week and receive a paycheck from an employer.

In almost every country polled, significantly more adults with these good jobs are not engaged at work than engaged at work. In other words, millions of employed adults are psychologically and emotionally disconnected from their workplace and are less likely to be productive. – Gallup, 2016 Global Great Jobs Report.

What if “the best” are only mediocre?

The numbers in the Comparably/Google survey undress some of the world’s “best” public companies and Gallup captures companies across the spectrum so we get a good cross-section of reality. And overall, on average, across the board, most of the important numbers regarding employees are consistent – consistently under performing. And they seldom get better than the 70% mark. If people are an organization’s most valuable asset, why are leaders so incapable of designing, building and leading organizations that maximize that potential?

The late Dr. Elliott Jaques, with whom I had the privilege of working on a book with, devoted an eminent career to developing the fundamentals of his seminal concept, Requisite Organization, which has applied numerous scientific discoveries about the nature of work and the nature of an employee’s capacity for work to the effective management of work systems, structure, leadership and human resources. The concepts and practices embedded in Requisite Organization are the result of more than 60 years of continuing scientific research by Jaques and the research of colleagues around the world.[4] Elliott Jaques created the framework and principles of how people and organizations interact to achieve the highest levels of human capability and organizational effectiveness. Perhaps Larry Page, Tim Cook, Mark Zuckerberg and Jeff Bezos should inquire at the Requisite Organizational International Institute. Of course, Bezos could pick up a copy of the book, Requisite Organization at his own bookstore.

We laud the Googles, Facebooks, Apples and Amazons and the stock markets chase them, their leaders make billions, gazillions of praises are heaped on them, millions of leaders emulate them and the White House consults them on “how to make America great again.” But even these organizations are still operating at a mediocre level. According to Gallup, in America, over 100 million people are disengaged from, and don’t give a damn about, their companies.

What are we to do?

With CEOs shouting from the roof tops about the importance of people and billions being spent annually on employee engagement – with little effect – we are no further ahead, according to the employees, then we were decades ago. Deloitte carries out regular annual surveys and one report, CFO Insights, written in January 2015 presents the depth of the problem with a lot of numbers (more “70 something”numbers). It’s worth reading (here’s a link to a WSJ article, which synthesizes the report). After reading it, try and square it with Deloitte’s latest material from which the quote below is extracted.

Companies need a new approach—one that builds on the foundation of culture and engagement to focus on the employee experience holistically, considering all the contributors to worker satisfaction, engagement, wellness, and alignment. – The employee experience: Culture, engagement, and beyond 2017 Global Human Capital Trends by Deloitte.

“Companies need a new approach …?” What? We’ve been heralding the crucial importance of employee engagement for decades, conducting employee satisfaction surveys since the 1980s, and now, today, in 2017, one of the world’s biggest consulting firms is saying, “Companies need a new approach …” What the hell have we been doing for the last three decades? All the leadership proclamations, all the executive coaching, all the organizational development, all the cultural change initiatives, all the HR programs…. And now we need an approach that “builds on the foundation of culture and engagement to focus on the employee experience holistically….” Is this an epiphany? Or the resurrection of old thinking in new clothes? Is this coming from the same people who developed the vaunted programs of the 1990s and 2000s?

Just asking

If the “best companies” can’t climb much past the 70% barrier and the millions of also-rans spin hopelessly on the merry-go-round of employee engagement, the key questions are:

  1. Is “new” really new?
  2. Are most leaders – even the best – unable to get past a level of mediocrity?
  3. Is 70% an acceptable benchmark, particularly if we actually intend to make America and the rest of the employed world “great again?”
  4. Are we stuck in mediocrity because of a lack of leadership? Or because of a lack of human capacity among the vast majority (70-87%) of human beings?
  5. Are we, as Dr. Jaques advances, not approaching the problem from a true scientific and empirical understanding of organizations and human nature?
  6. Maybe we’ve always been mediocre but think we’re great? Because mediocrity is all we’ve known, all we’ve had to compare our performance to, and because it’s the limits of our human capability, at this point in our evolution (see Elliott Jaques’s book, Human Capability and E. O. Wilson’s two books, On Human Nature and The Social Conquest of Earth).

Think about it.

Footnotes:

  1. This Is What Employees Of Companies Like Google, Facebook, And Amazon Think About Their Employers, Fast Company, June 19, 2017
  2. Ibid
  3. Ibid
  4. Requisite Organization International Institute
By |2017-06-20T11:34:39+00:00June 20th, 2017|Categories: business, politics, social|Tags: , , , , , , , |4 Comments

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4 Comments

  1. Bruce W. Fritch June 21, 2017 at 8:57 am - Reply

    I commend you! The disparity between the data you site and what for decades has been normalized as “acceptable” is profound. While you are rightly concerned with embracing human potential (NOT at 30% acceptability), most in authority in business look to the acceptability of profits. It would be very helpful to popularize a performance measure more wise then near term profits. The imagination of CEOs and corporate boards is insufficiently intrigued with the profits that would grow with greater human brilliance. It is a confounding conundrum, beyond the depth of thinking of must C-Suites and Boards. The irony is that even the most base and greedy authority figures will find greater reward in a very different kind of “leadership” than that satisfied with 20-40% workplace engagement. It appears likely that if this is to change, it will come from the pursuit of excellence of cultures that embrace sustained human brilliance more than profits. These may be entrepreneurial ventures that actually recognize organizational culture as the engine of all good possibilities. That is not the mediocre predisposition; it is the predisposition of sustained human brilliance. Thank you, David!

  2. david June 21, 2017 at 9:36 am - Reply

    Bruce – wells said and I salute your optimism for “the pursuit of excellence of cultures that embrace sustained human brilliance more than profits.” We can only hope that this occurs sooner than might happen with a generational change spurred by the “new” entrepreneurs. But that will require, at the very least, a significant number of the incumbent leaders understanding and embracing the critical link between profits and people, not continuing to spew the all-to-common and empty concept of “people first.” It’s corporate-speak and lip service. Someone has to get inside the C-Suite and the minds of a few brilliant CEOs and show them, advise them, on how to make the overarching, long-term connection between human behavior (i.e., people, cultures) and profits (profits come from performance, performance comes from releasing the indomitable human spirit). Anything less, is … well, mediocre. Find the right leaders and it can happen. Are you up for it?

  3. Bruce W. Fritch June 21, 2017 at 2:44 pm - Reply

    Yes, very much so. Increasingly, the challenge over the last 30 years has been to find the leaders with the appropriate characteristics. This entails difficulty of mythical proportions, and gratefully I have had many successes. It is a complex of characteristics that must align —with character, humility and courage aligning first. The leader who thinks the goal is to maximize shareholder value is a very unlikely candidate. Look instead to the CEO who thinks in marketing and thinks in leadership, who takes initiatives every day to strengthen relationship with all stakeholders. Look for the one whose goals are worthy — in the sense of good for humanity — means it, and measures progress, accordingly. These are truly rare birds. They are hard to find. Let’s support and grow more, so their scarcity is not so fantastic, but their proliferation through emulation is!

  4. david June 21, 2017 at 3:54 pm - Reply

    Bruce – you’ve touched on an important insight: the character of a leader. I agree it starts there. And whatever character many of today’s leaders have seems to have been stripped away, or perhaps just encrusted, by the fundamentals of the current business model that’s built on the profit premise, first and foremost. The new generation of leadership you refer to needs to grow from a different place because trying to rejig, revise and retool what we have done for more than a century is a losing game – as the lack of results has shown, over and over again. We need to identify the characteristics required in a leader who can get beyond the “70%” level in the fundamentals of employee engagement, satisfaction, collaboration, cooperation, etc. etc. Yes, as you say, it’s values, humility, courage and worthy goals that look beyond the horizon of business profit. Because from those goals come much greater profits, which has been demonstrated by the small number of leaders who truly are leading great companies. One example is James Goodnight at SAS. More can be found listed in the extraordinary book, “Firms of Endearment.” I highly recommend it to anyone interested in getting beyond the mediocrity of “70%.”

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