EO Podcast #2: The Benefits of an Engaged Organization

 

Stefan: Hi. This is Stefan Wissenbach, and I’m here today with Dan Sullivan to discuss the engaged organization. Today, we’re going to be focusing on the impact of engagement and some of the key insights that we have learned in working with organizations that have been focused on improving engagement levels. The first thing I want to talk about today, Dan, is the importance of an engaged purpose. In fact, of the five elements that we score, it’s the first element that we think is fundamentally important, and that is the extent to which the organization has a purpose that everyone’s connected with.

One of the things that we’ve noticed pretty much extensively, I have to say, is how most organizations don’t have a purpose that engages the team members, engages the employees, engages the leaders. The more digging I did into this, the more I noticed that so many visions, missions, purposes seem to be written for the wrong audience. I notice that they seem to be written either for the business owners, “We want to grow a business worth a hundred million.” Your employees don’t really care. Or they were written for the customers, and guess what, they don’t really care either. The people that should care and that you want to care are the people within the business.

One of the things that we’ve been working with entrepreneurs, helping them do, is to create engaged purposes that connect the employees and the leaders and the team members to where the business is heading. That’s had a transformational impact, because the minute that you take a bit of time and you involve your team and you get them connected to the purpose of the organization, why does the organization exist, what is it there to serve, what’s the impact that it has, and they get connected to that impact, you get to the point where you can create a situation where a new employee …

My dream when anyone joins us is a new employee will go home on a Friday and sit round the dinner table with family and they’ll say, “How’s your new job?” and they’ll be able to talk about the purpose in such a way that the other members around the table say, “Why that’s a really cool place to work.” It won’t necessarily be about what the business physically sells, but it will be more about the impact that the business has and why everyone rallies round to drive things. I’m interested, Dan, in discussing this with you because you were the first business onto the Engagement Multiplier Program and I know that you’ve had … In looking at your organization’s vision and purpose, there’s been quite a big impact. Would you mind just talking a little bit about that?

Dan: Stefan, I took a tip from you right from the beginning that probably the biggest way right out of the gates that you can increase your scoring, your engaged scoring for the organization is to go after the vision of the company. In our case, everybody intuitively knew what the vision and the purpose of Strategic Coach was, but it had never actually been actively discussed, it had never been written down. One of the things that really speeded up in the first two quarters is the fact that we established a line which was increasing entrepreneurial freedom as the vision of Strategic Coach.

The purpose of our company is to increase entrepreneurial freedom, and that’s freedom in the outside world but it’s also entrepreneurial freedom inside of our own company. We’ve been in business as the program for more than twenty-five years, but we had never actually written it down. It reminds me of Apple, which is one of the great entrepreneurial success stories of the last thirty years. They have one of the greatest purpose statements and vision statements that I think is possible, and their statement is, “We make beautiful technology that people love using.”

It’s just this all-encompassing, easy to understand, entirely positive, but it doesn’t tie them down to any specific product. It doesn’t tie them down to any specific marketplace or type of customers. The words “beautiful” and the words “love” actually are just marvelous describers of a engaged vision. They’re the number-one capitalized company in the entire world, and I’m sure a lot of their capitalization right now is simply a function of having thirty to forty thousand people totally engaged with that one purpose that we make beautiful technology that people love using. I think this is now available because of what you’re doing with the Engaged Multiplier. I think this is available to any entrepreneurial company in the world.

Stefan: Indeed, and we’ve created a guide on how any organization can create an engaged purpose in a way that the team rally behind it and help make it a reality. I’d like to pick up on an interesting point here and it links back. I’d like to come back to the discussion we’ve had about LEOs, as you coined the phrase, leaders of an engaged organization. It’s team members within your business that are passionate about driving engagement forward. This leads me onto my second insight, that is that one of the things that we’ve seen be highly successful is where organizations empower the team members to go ahead and take action, take action that will improve engagement.

Part of our program actually asks the question, what two actions could you take that aren’t dependent on leadership involvement? The reason we ask that is that if it’s not dependent on leadership involvement, it normally doesn’t cost much money, doesn’t take up much time. Our view has always been if team members can come up with ideas that can improve engagement, that don’t take much money or much time, then you should probably let them do them and then celebrate the successes. We’ve seen organizations doing this, and it could be very simple things, and often it’s the simple things that have the biggest impact.

Dan, I’m interested to understand how you’ve used the concept of LEOs, leaders of engaged organizations, to drive initiatives and help effect the changes within the business.

Dan: When we started, we didn’t have all the marvelous tools that you’ve built into the platform, so we started by making up some things. We had the scorecard and we had the ability to send the survey off to you and get our numbers back, but right off the bat, a lot of our leaders … Our company is broken down into twelve teams, each of which has two leaders, the top leader and a team leader and then the assistant leader. Right off the bat, there were a number of those leaders who volunteered to say, “We’ll create a special team that’s just designed to interact with the Engaged Multiplier,” the platform that has been created by Stefan, you and your wonderful team, Todd and his whole team at the digital agency in Chicago.

Right off the bat, I would say within a week, there was a team and anybody could volunteer for that. Out of more than a hundred employees, we’re about a hundred twenty right now, I would say that about twenty-five or thirty people just volunteered that they would like to go through the report, they would like to look at the comments that came back, and then they would create a priority process of which ones could be acted on easily, quickly, at the lowest cost over the next ninety days. It’s like little small things. One of the things I should say … I’m going to suggest something that I did.

In Strategic Coach we have a planning document which everybody at the ten times program level and Coach does, which is called the Breakthrough Booklet. I’ve been doing this myself because I actually show everybody how I’m planning my quarter. I just took that and walked into the recording studio and recorded the highlights of it, and I do it every quarter and I send this out to everybody in the company. I’ve never done that before. These are the most important things that I’m working on, but I never thought about actually telling everybody, our entire hundred twenty-person company, what I’m doing every quarter. I send it out, and I’ve had probably twenty-five-thirty discussions where people came up and said that’s really interesting, where there had never been any discussion before.

I’ve just given you a personal example there, but it’s an enormous number of things. In our orientation of taking our … One of the big things was making sure when a new team member comes in or team members who have come in and actually acquainting them with the vision, which was one of the big things we got out of the first thing, and saying, “You know, this is what we do as a company. This is the culture. These are the rules we operate by.”

I just think the consciousness of, the uniqueness of our company … Every company is unique because it comes out of a vision, a particular entrepreneurial vision, but there’s an appreciation that I’ve never seen before in the first twenty-five years of Coach, an appreciation of just the uniqueness of the organization that they’re actually operating in. Next time we come back … You caught me by surprise here, but I’ll bring a list of some of the very, very small things that have had the biggest impact.

Stefan: Yeah, that’s fabulous. That links me to the third insight, which is … and you’re doing this. We say to business owners, entrepreneurs, “Play a game you can win.” Okay. I remember many years ago being taught about the Japanese word “kaizen,” and it means lots of small change, and how actually layering a series of small changes regularly over time creates exponential impacts. As you said earlier, in terms of the insights that come from asking team members for their thoughts on how engagement can be improved, a lot of those are very straightforward to implement, probably have very little cost, and enable you to be seen as a business very clearly to be taking action and dignifying the input that the team has had.

We talk about just looking to move the score just a little bit every ninety days. Some of our clients are experiencing big jumps, but actually that should not be the goal every ninety days. Just look to move the score up a little bit every ninety days because that’s a game you can win. You’ll often find yourself then reporting back that things are much, much better than you anticipated they would be.

Dan: I want to tell you two big discoveries. There’s lots of little things, very practical, very specific things that get implemented. I just want to report back from sort of the cutting edge of a company actually using the Engaged Multiplier, two things that have become very, very clear to me that I didn’t know were going to happen, so these have been surprises. The introduction into a company culture of the word “engagement” as something that gets talked about on a daily basis and very openly is itself a massive jump for any company.

I always say the entrepreneurial organization is a very powerful community, that communities are held together by language. If at the very center of your organizational language, you have the word “engagement,” it makes an incredible number of other kinds of conversations possible, all positive conversations, all creative conversations that were not possible before you had that word at the center. That’s one of the big things.

I think the second thing is that you develop a standard about any move that you’re going to make in the company, any strategy that you’re going to do an improvement, and you ask yourself, “Is this going to increase the engagement in our company or is it going to decrease the engagement?” You have a value system that I didn’t have before of making judgments about financial decisions, technological decisions, expansion decisions. Were always asking ourselves questions, “Does this contribute to engagement or does it undermine it?” Of course, you only do the things that increase engagement. Language and value system have been added in a totally conscious way where they weren’t there before.

Stefan: That was one of my insights, so thank you very much. It’s interesting, I’m just picking up from that, when you talk about the language and the focus around engagement. I was discussing the program recently with some pretty successful guys in private equity space who have invested very heavily across a lot of entrepreneurial businesses and are helping to grow those. I said, “You wouldn’t have dreamed of running these businesses without financial reporting. I would imagine the financial reporting is quite important.” Of course, it is, and they have people on the boards, they have management accounts being created on a regular basis, and they’ve got a real finger on the pulse of the level of financial health within the business.

I said, “Well, how do you measure the emotional and the engaged health of the companies that you invest in?” That was the answer, there was silence, because they don’t. I said, “Now it’s interesting to think about this, because I would suspect that if you were measuring the engaged health of your businesses and the engagement levels started to dive, if you did nothing about it, I suspect that your financial reports would worsen quite quickly.” Actually having your finger on the pulse in terms of how engaged the organization is, is a fabulous way of having an early warning system to enable you to address problems before they become big problems.

Dan: You’ve been in the merger and acquisition business as part of your wealth management experience. You know the generally tragic story of companies being purchased by other companies because they were projecting out what the company was doing financially. They could just see that if we’re running it, we’ll bring efficiencies of technology and organization to it. It ends up that the investment they made just never pays off, and the reason is the very, very apt description that you use about engagement being the electricity. They got all the machinery of the company, but the day the original owner walked out of the company so did the electricity of the company, or the leaders of the company walked out and that was what was providing the engagement.

It wasn’t as clear as you get, of course, with the use of the Engaged Multiplier, but really good companies have a really good what I would call unconscious level of engagement. The beauty of what the Engaged Multiplier does is it takes everything that’s positive but unconscious and it makes it very, very conscious and explicit and discussable in the open court. If somebody is trying to buy a company, that would be the number-one thing that I would protect, would actually be the very high engagement level that made the company attractive in the first place that you would want to buy it. I have to tell you, I think you’re just transforming what the whole notion of doing business in the global marketplace actually means in the 21st century.

Stefan: Thank you very much. I love the way you keep raising my game, Dan.

Dan: Yeah, well, you know, you’re fully engaged with this, so it should be all payoff from now on because God knows, you’ve taken the risks on this and you’ve put in the hard labor. I probably more than anyone else can appreciate the entrepreneurial courage it took to actually see this through over a three-year period where you didn’t have any real confirmation that it was going to pay off. Now, it’s just a dream what has been created.

Stefan: It’s very rewarding. It’s absolutely so rewarding. Seeing the impacts is great energy for me. In fact, it’s very engaging. I know that over time, the more businesses that are … We already have a large number of businesses, but the more businesses that are joining the program and the more businesses that are becoming more engaged and improving their engagement scores, the more insight that we’re gathering. We’re gathering the most fabulous feedback and insight from our customers, which we’re in a position that we can share with others, so it’s just going to multiply. It’s early days at the moment, but it is going to multiply. Yeah, I feel very privileged to be involved with it, to be honest.

Dan: We were having a discussion in Chicago and you were talking about what seems to be uniformly true about all the companies, the founding companies. You had fifty organizations that just wanted to jump right in, and you got them all engaged with the system. They’re all up on the Engaged Multiplier. Could you just share those? Everybody who’s listening to this that hasn’t actually registered with the Engaged Multiplier yet is sitting there, and any additional support for just taking action of actually just going through engagedmultiplier.com and saying, “Look, I want to put my whole company on this system.” I think they would like to know two or three things that they could just absolutely count on in the first three months, in the first six months.

Stefan: Okay. One of the first things that you can count on for sure is that you’ll know how engaged your business is. Ignorance has never been a strategy, so knowing what the score is and how your business scores. In every single survey we run, we get a score, and it’s very clear on how the team members and the leaders view the business and it gives you tremendous insight. That’s an absolute truth, and, as we’ve said before, all progress starts with telling the truth. It takes courage as a manager to create an engaged organization because you’ve got to be prepared for listening to everyone’s perceived reality. In doing so, with that insight, with your score, it becomes very easy to know what to do next. That’s the first thing. You’re going to get a score and it’s going to be really clear on what action you need to take.

The second thing that’s been true … I talk about this as being one of the most rewarding things for me still when I’m involved and working with clients and looking at their reports, and that is the feedback. Even in relatively small companies with just sort of ten employees, ten team members, there’s incredible amounts of really good quality feedback. We structure things so that people feel very safe and it’s confidential and its anonymous, and people really go to town. There’s some wonderful comments and some real gems of wisdom that come out of the pressure, so you will get some great feedback.

Another key point, really, that’s been true has been the energy. In fact, we’ve got a business that’s growing really fast and so we’ve been hiring quickly. I was in Chicago just dealing with three new team members last week, and we have been taking people on board to help manage the onboarding of customers as they come onto the Engagement Multiplier Program. I was talking to some of the relatively new team members about their experience and they’re saying, “We love the energy here, because every time we’re dealing with a client that’s got this, the people that they’re delegating the establishment of the program to within the business, they’re always so excited.”

This was a sort of unexpected byproduct for me. I knew that it was really important to business owners, small business owners understand the power of engagement and then the power of having an engaged organization. What I was unprepared for was how the team members would typically react to the idea of actually being listened to and having their vote count and being part of a program and being able to make a difference. That’s brought with it some tremendous energy, to the extent that people that we are recruiting to help onboard customers onto the program are feeding back to me about the energy from within the organizations that they’re working with, which is fabulous, really.

Those would be a number of key points, Dan.

Dan: The thing that is really important now for me is the degree to which you have made this into an absolutely foolproof automated process. There’s no parts that can break down. It’s just a wonderful thing. In the area of organizational transformation, I think you’ve created the same kind of principal as Uber created in the transportation sector, and that is that you’ve made it incredibly simple for everybody involved in a process to grade everybody else involved in the process. That’s why Uber works so well. As a passenger, I grade the driver. As the driver, you grade the passenger and then these grades really reflect on whether you’re going to be a prized Uber driver inside the Uber system.

This is all automatic. This does not involve politics. It doesn’t involve worrying about currying favoritism. The anonymous and automatic quality, I think, of the Engaged Multiplier is why it’s a game-changer. It’s so fast and it’s so simple and it costs relatively zero compared with the payoff. It’s a beautiful thing.

Stefan: Thank you.

Dan: Yeah. It’s just a lovely thing. I just think it’s one of the great jumps that our company is going to take in the near future just as a result of having this capability.

Stefan: Thank you. We talked about the impact that the program has had on Strategic Coach, the first of the founding fifty members. Is there any one sort of standout thing that … If you had to pick one standout thing, actually, I won’t put you on the spot. If you had to pick one standout impact, what would it be?

Dan: It has to do with the fact that we had established a concept in the marketplace that was very successful, and the concept was called the self-managing company. Stefan, you know businesses, you’ve been around them. You yourself are running a business. There’s kind of a daydream that every entrepreneur has. What it is is that the company would manage itself. I can focus just on the building a bigger future for myself, for my team, for my clients. The whole managing of the company is automatic, and we got tremendous feedback to this over the last three years. When we added the capability of the Engaged Multiplier, I said, “You know, self-managing company just isn’t a big enough game. We now have the ability to have a self-multiplying company.”

I could never have said that before, because there wasn’t a capability that would guarantee you that. Because of this engagement capability that each team member on the company actually shares now and actively contributes, and everybody is equal in the process in terms of what they have to say, I suddenly realized that we now have the ability on a team-member-by-team-member basis to create a multiplier factor inside of our company in terms of obviously morale, but also in terms of people’s performance, in terms of their ambition inside the company. When you get a hundred twenty people who are all turned on and want to improve to the greatest amount every ninety days, I think you’re going to get a multiplier effect that I don’t see how it would be possible any other way.

Stefan: That’s fabulous and so true. Engaged organizations take on an energy of their own, don’t they?

Dan: Oh, yeah, yeah. In the 21st century, your involvement in the marketplace as an owner, as a team leader, as a team member plays a very significant part of your total experience, your daily, weekly, annual existence on the planet. The fact that for so many people in the world, that is actually an energy-draining experience or it’s a nothing experience … It’s not necessarily a negative, but it’s not a positive. That you with a technology that’s just utterly simple could literally transform that so that a third of people’s conscious lifetime or half of their conscious lifetime gets transformed in a way that then lends itself to every other part of their life, they go to work and get energized and they take that energy into every other part of their life, I think that’s a remarkable transformation of what business means.

Stefan: It’s huge, and it’s why the subtitle of my book that’s coming out shortly … The book is called The Engaged Organization. The subhead is The Company, in italics, Company in italics, You Dream About. I very quickly explain to the reader that I remember a very wise relative of mine that was a mentor. He said to me, “You know, you are defined by the company you keep,” and he meant about the people you hang out with. We spend so much of our time and our lives at work as business owners, we’re at work a tremendous amount, and effectively, the people that you surround yourself with at work, your leaders, your employees, your team members, they are the company you keep.

Dan: Yes.

Stefan: If you’re able to create an environment that’s engaged, that has energy, where everyone’s working to a common purpose and it’s a great place to be and it’s happy, then I have to say that’s a much nicer business to show up to every day or the days that you want to show up, because you have the choice because it’s self-managing. That’s a much better place to be than in a business where the company that you keep, not the company itself, is actually draining. I think there’s something very important about that, Dan.

Dan: We’re reaching the end of this episode and we’ve got millions of other things to talk about in the whole universe of engagement, but I have to tell you a story about one of the team leaders in the company who took ownership of the LEO team, the leaders of the engaged organization. We have a café in our main company in Toronto, and that’s actually my office. I actually hang out in the café. She’s got young children who are very, very demanding, so she came in on a Monday morning and she said, “Thank God it’s Monday.”

I said, “You know, that’s kind of a real compliment to the environment that’s been created at Strategic Coach, especially so since we have this new capability that there’s this real look forward to getting back with all your teammates on Monday morning because they’re all engaged. They’re engaged with their work, they’re engaged with the value creation in the company. I think that that’s a beautiful thing as a business owner to know that you were responsible for setting up the circumstances where that experience could be widely shared.

Stefan: Absolutely, absolutely. A great thing for any business owner.

Dan: Stefan, this is very, very exciting. Anyway, when we come back next time, let’s talk about the possible growth plans of the Engaged Multiplier all around the world. I just want to remind everybody to get a really great description of the Engaged Multiplier, just go to Episode One of the Engaged Organization Podcast here and Stefan gives you a guided tour on how you can get started. This has been terrific, and I can’t wait until our next recording session, Stefan.

Stefan: Thanks, Dan. By then, we’ll have even more stories.

Dan: Yes, indeed.