HR: How Disconnected Are You From Employees?

ADP recently released a report which, based on data they’ve collected from several studies, examines the causes and implications of a persistent disconnect recorded between HR’s and employees’ perceptions. The topic is an interesting one: despite the vast improvement in and efficiency of communications tools and processes that we’ve witnessed over the years, employees and HR departments have seemed to maintain notably differing perceptions on many key human capital management effectiveness issues. This disparity holds true globally, and in companies of all sizes. ADP has noted this trend in three of their ADP Research Institute® global studies in 2013: Quantifying Great Human Capital Management, Employee Perspectives on Human Capital Management, and HR 360. All three studies measured perceptions of status and value of the HR function and showed consequential differences between employees and HR in key areas such as how well employees were being managed, how well questions regarding HR and benefits issues were addressed, whether feedback was communicated or even collected, and in performance evaluations. Data indicate that similar gaps in perception exist between HR and senior management on these same topics, and as ADP points out, these differences matter because they may be indicative of larger problems within organizations – such as whether investments in HR technology are actually delivering the results of more effective communication, or whether advantages of a strategic HR function are being actively sought and realized.

ADP’s research studies show that globally, employees have much more negative perceptions of how well their organizations are managing them than the perceptions of their senior executives and HR leaders. This disparity is notable in such areas as compensation, work/life balance, career opportunities, and the effectiveness of senior leadership. The data also show that the larger the organization, the greater likelihood that employees’ perceptions of how well the organization is managed will decline.how well companies manage employees

differing perceptionsSenior executives and HR leaders are also significantly more satisfied than employees with the processes they have in place for getting employees’ answers to their questions regarding HR/benefits. Globally, this disparity is greatest in the Asia-Pacific region and in the United States. In the U.S. 79% of HR leaders report that it is Extremely/Very Easy to get HR/benefits questions answered, compared to only 56% of employees. Continuing the gap in perceptions is that, when employees’ questions are answered, HR leaders and senior executives perceive that employees are far more satisfied with the process they’ve gone through to get questions answered than employees actually are.

Such differences in perception bring to light a number of potential challenges. How do organizations know they’ve secured the advantages of providing benefits if HR is more fully convinced of employees’ satisfaction than employees themselves? Additionally, if HR thinks that their processes for answering questions are more effective than they actually are, are employees even aware of all their benefit options? This becomes especially disconcerting if organizations are counting on their benefits as a way to attract and retain talent. Interestingly, more than half of employees in large U.S. companies stated that an employee portal is an important informational resource, while less than one-third of their HR leaders shared that conclusion. The options primarily cited by HR leaders for employees to get answers to their questions included an in-office HR team, a dedicated HR representative, and the employees’ managers. Employees’ responses however, cited an 800 number or internal company portal as the most important resources for getting answers.

Note too, that among respondents who felt that it was extremely or very easy to have their HR questions answered, less than 1/5 reported they would be likely to look for a new job in the next 12 months; but among respondents who said it is not easy to have their HR questions answered, that number almost doubled to more than 25%. Lastly, another key area to note where disconnect occurs is between employers and employees perceptions of their organizations talent management processes:talent management disconnect

For more on information on the disconnect between employees and human capital management, make sure to check out ADP’s full report, “Human Capital Management’s Employee Disconnect. A Global Snapshot.”

And perhaps it’s time to begin questioning whether the data you are reviewing regarding your organization’s HR effectiveness is actually true.

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Pump Up Your Change Management Competencies

Data Point Tuesday
IBM
recently released an executive report: “Making change work… while the work keeps changing – How change architects lead and manage organizational change.” The report, based on data from their latest “Making Change Work Study” seems a very pertinent one for the times. As a whole, we know that this is a period of significant change for the workforce, we talk about these changes, and how they can and are affecting organizations, but there is significantly less talk around how organizations are successfully managing such change – which is exactly what IBM’s report dives into. As IBM states, “the gap between the magnitude of change and the ability of organizations to manage it continues to widen.” While many organizations are struggling to close this gap, IBM identifies a select few – change architects – that have “found the keys to making change work while the work keeps changing.” IBM’s data is based on survey results from almost 1,400 individuals responsible for designing, creating or implementing change across their respective organizations.

In IBM’s study, they consider only the top 20 percent of organizations to be highly successful when it comes to change management. These “Change Architects” are organizations that indicated at least 75% of their projects were a complete success (i.e. a minimum of three-in-four projects met all predefined goals).Avg. success rate of projects

Change Architects capitalize on “the vortex of change permeating every aspect of business.” Such organizations are considerably more successful at managing projects. Compared to the average in IBM’s survey, Change Architects have at least 56 percent more projects that were a complete success. What do Change Architects do differently to manage change in their organizations? IBM identifies three critical imperatives that allow them to be change-effective:

  • “Lead at all Levels”
  • “Make Change Matter”
  • “Build the Muscle”

When it comes to managing change, organizations must lead at all levels. Many organizations fail to successfully manage change because they have do not embrace a “change-centric” culture, despite, as IBM points out, that change is the one constant that organizations will always face. Driving a change-centric culture must begin at the top from executive management and cascade throughout all levels of the organization. Survey respondents view “Top Management Sponsorship for Change” as the #1 most important aspect for organizational change:

Most important aspects of change
Despite this fact, only 66% of respondents state that their top management is enabled to act as change leaders (for Change Architects, this jumps to 77%). How are top management at Change Architect organizations driving change? IBM identifies three key characteristics that enable leaders to drive change across the organization:

  1. Role modeling throughout the organization.
  2. Engaging employees with a compelling case for change.
  3. Empowering new and passionate change leaders at all organizational levels.

Another critical responsibility of top management in regards to effectively managing change is making change matter. Managers must make sure that if change management programs exist, employees thoroughly understand the activities and benefits of those programs. The majority of organizations invest only 5% or less of total project budgets in change management activities on key projects, and 87 percent of respondents indicate that not enough focus is currently placed on change management in critical projects.

Budget allocation project management vs. change management

Respondents report that when change management activities are incorporated into the overall project plans from the beginning, successful project results are more likely. What then, is preventing change management activities? According to survey respondents, there are five key barriers that keep organizations from pursuing new change capabilities:

  • Change management benefits are not clear (69%)
  • Change management activities are not clear (53%)
  • Role of change professional is not clear (49%)
  • Lack of skilled change management resources (43%)
  • Change management is too expensive (26%)

Last but not least, Change Architect organizations – those that are successful at managing change – have a focus on “building muscle.” 60% of organizations in IBM’s study confirm a formal career path for project managers. This is opposed to only 25% for change professionals. Change Architects often establish a formal career path for change professionals (42% more than other organizations). They use this formalized change discipline for central change coordination; to drive consistent methods, change-related trainings, career developments, asset reuse, company-wide knowledge and best practice sharing.

Formal Change Management methods
While organizations that we can truly call “Change Architects” may still be few are far between, the good news is that between 2008 and 2014 the use of formal change management methods increased significantly. This indicates that awareness for this organizational management need is, at the very least, rising on companies’ radars. Managing change is tough, as we all know. This report suggests that making change management a core competence in our organizations may just make our change experiences more successful in every way. Building and exercising change management muscles may make all the difference!

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The 2020 Workforce: Misconceptions Between Management and Employees

data point tuesday

Oxford Economics and SAP recently released the report “Workforce 2020: The Looming Talent Crisis” aimed at understanding the opportunities and challenges of the evolving workforce. The research is based on survey responses from over 2,700 executives and more than 2,700 employees in 27 countries. Understanding the core characteristics of “the new face of work,” as SAP puts it, is an important step in recognizing the opportunities and challenges that will come with it. SAP and Oxford Economics’ research identifies several key characteristics of the 2020 workforce, including that it will be an increasingly flexible one. Of executives surveyed, 83% cited that they plan to increase use of contingent, intermittent, or consultant employees in the next three years and 58% say that this requires changing HR policy. In addition to being flexible, the 2020 workforce will be increasingly diverse, and SAP advises that because of this HR leaders will need to become more evidence-based to deal with these realities. As of now, only 50% of HR departments state that they use quantifiable metrics and benchmarking in workforce development and only 47% say they know how to extract meaningful insights from the data available to them. This is likely part of what influences the reported lack of progress towards meeting workforce goals that many executives cite. Just 33% stated that they have made “good” or “significant” progress towards workforce goals.

SAP identifies technology as a key need for the evolving workforce that organizations are unprepared for. While this may seem obvious, in the U.S. just 39% of employees report getting ample training on workplace technology and only 27% report access to the latest technology. While it’s understandable that not all organizations can offer the most cutting edge technologies, a lack of sufficient training for the technologies that are in place could be seriously affecting employee productivity. Aside from technology, misconceptions about Millennials are another trend of the evolving workforce that SAP points out (and with the expectation that this generation will make up more than 50% of the workforce by 2020, any misconceptions are noteworthy). The research points out that while Millennials are different than other generations, they may not be as different as they are typically portrayed. According to executives surveyed, 60% believe Millennials are frustrated with manager quality but only 18% of Millennials say that they actually are. Additionally, 62% of executives report that Millennials will consider leaving their job due to a lack of learning and development, but just 31% of Millennials say they have considered this.

millenial-misconception

In terms of the emerging workforce, there may also be gaps between what companies believe employees want from them and what employees actually want.

what-employees-say
Perhaps not surprisingly, the most important incentive to U.S employees is competitive compensation (84%) followed by retirement plans (75%), and vacation time (62%). 39% of employees say higher compensation would increase loyalty and engagement with their current job. When it comes to attributes that employees think are most important to their employer, job performance and results is number one (46%), followed by the ability to learn and be trained quickly (29%), and loyalty and long-term commitment to the company (28%). This differs however, from what employers deem most important. The top three attributes executives want in employees are a high level of education and/or institutional training (33%), loyalty and long-term commitment 32%), and the ability to learn and be trained quickly (31%).

What executives and employees do agree on is that organizations are not focused enough on developing future leaders. Only 51% of U.S. executives say their company plans for succession and continuity in key roles and 47% say their plans for growth are being hampered by lack of access to the right leaders. Employees agree that leadership is a problem area, with just 51% of employees stating that leadership at their company is equipped to lead the company to success. Better learning and education opportunities will be key to bridging this talent gap. The need for technology skills in particular will increase in demand (e.g. cloud and analytics), although SAP’s data states that just 33% of employees expect to be proficient in cloud in three years. This statistic is slightly better when it comes to analytics, with 43% expecting proficiency in three years and almost 50% expecting proficiency in mobile, social media, and social collaboration. In terms of training programs, only about half (51%) of American executives say their company widely offers supplemental training programs to develop new skills. This aligns with employees’ perceptions toward training, with 51% reporting that their company provides the right tools to help them grow and improve job performance. Additionally, about half (52%) of employees say their company encourages continuing education and training to further career development.

Take a look at the graphic below that highlights the five major labor market shifts discussed. Are you beginning to think about shifting workforce development strategies for the future? Are you really sure what your employees think? Or are you making assumptions based on popular press reports that may not be founded on fact?

labor-market-shifts

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Sustainability in 2014: The Language of CSR

Data Point Tuesday
GreenBiz Group Inc.
recently released their 2014 Sustainability & Employee Engagement Report, content generated from responses of more than 5,600 members of the GreenBiz Intelligence Panel (executives and thought leaders in the area of corporate environmental strategy and performance). GreenBiz’s report “examines aspects of corporate environmental and sustainability education initiatives at companies at varying stages of program development and provides a quantitative understanding of the evolution of employee engagement” and notes that while sustainability professionals commonly think of challenges in terms of the physical or fiscal impact of their efforts, the most problematic challenge for this area today may actually be its use of language. Take the term “employee engagement” as an example. While sustainability professionals frequently use this term to describe their attempts to motivate a company’s employees to participate in furthering the sustainability or CSR program, it’s likely that HR executives already have a definition for the term and a way to measure it. HR commonly defines engagement as an employee’s willingness to apply discretionary effort toward meeting the company’s goals and to do more than merely meet job requirements/customer needs and measures this via an index approach using employee answers to survey questions. For example “are you proud to work at this company?” or “do you feel this is a great place to work?”

If HR and Sustainability teams have different definitions of terms like employee engagement, it can cause disconnect and communication barriers. GreenBiz uses the example of a CSR professional who ran into resistance when he met with HR to talk about how to improve employee engagement efforts at his organization. When he changed the language of the conversation however, and asked to discuss how they could increase the participation numbers in the company’s sustainability programs, he was meet with much more enthusiasm. GreenBiz points out that another potential language gap occurs when Sustainability and HR professionals discuss how to achieve greater participation from employees in furthering the sustainability mission. While 73 percent of respondents indicated that their company is educating employees across the organization about its corporate sustainability goals, in a recent study by The Conference Board, only 5 percent of the S&P 500 have instituted employee CSR training. This highlights the differences in association and potential confusion that can occur between the terms “training” and “education,” where training is generally more skills based and education often refers to broader and more general learning activities.

Sept 16 sustainability definitions chart
Understanding the kinds of language used in CSR and HR programs, and how to frame such language, can be a vital tool in breaking down communication barriers within an organization. With this in mind, let’s look more closely at what GreenBiz’s report uncovered, starting with the basic definition of “sustainability” initiatives. Over the last six years the term “sustainability” has become the standard for describing such initiatives. 51% of respondents report identifying with this term, up from 49 percent in 2011 and 34 percent in 2008. While this term is increasing, two terms have lost value in describing sustainability initiatives, “environmental, health and safety” and “greening” (see chart above). Another sustainability trend for 2014 is the convergence of social and environmental issues. When GreenBiz looked at the extent to which environmental and social issues are linked today vs. five years ago, they noted an increase across all companies regardless of size. The largest increase in the correlation was at large companies, from 87% to 94%. When it comes to educating employees about their corporate sustainability goals, almost all companies participate. 73% of respondents at small companies indicated their organizations are providing this education, as did 80% of respondents at large companies. Interestingly, which department champions sustainability education efforts most seems to be dependent on the size of the company (see graphic below).

Sustainability champions grapic
When it comes to the topics on which departments focus for employee sustainability education programs, the top 5 have remained steady over the last six years and are: “general information about sustainability initiatives,” “the company’s sustainability successes and accomplishments,” “Actions at work to conserve or protect resources,” “environmental footprint of the company,” and “volunteer programs.” For 2014, the top three motivators for employee participation in corporate sustainability activities were: “concern for the environment and society,” “evident CEO support or mandate,” and “sustainability goals included in performance evaluation.” GreenBiz’s report also cites internal hurdles to sustainability education, which include executive commitment, education and communication, budget/resources/competing priorities, and time.

This data around participation by employees in corporate CSR or Sustainability programs, links nicely to last week’s post about Millennials’ participation in “cause work.” Coming at this topic from both directions – desire on the part of Millennials to participate and corporate CSR/Sustainability professionals’ desire for higher participation levels – creates significant opportunity for everyone. Building trust levels , creating opportunities for growing camaraderie and making strides in being good stewards of the Earth, the economy and our communities in one fell swoop could be a monumental win/win for all of us.

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Filed under China Gorman, Corporate Social Responsibility, CSR, Data Point Tuesday, Great Place to Work, GreenBiz Group, Sustainability

Millennial Employees: Defying Assumptions

Data Point TuesdayApproximately 80 million Millennials live in the U.S today. In my last post on Talent Acquisition Trends I touched on the fact that this group is the largest generation in history and, while the exact percentages vary depending on the research, is expected to make up more than 50% of the workforce by 2020. We may still think of Millennials as “the next generation” but the fact is that this group will make up the majority of the workforce in the not too distant future, so research on the values and expectations of this generation is valuable – and actionable. A great example of this kind of research is the “2014 Millennial Impact Report: Inspiring the Next Generation Workforce” by Achieve, whose purpose for the research is to “Understand Millennials’ preferences for cause work and to share those findings with organizations that are looking to better engage this influential group.” Surveys were distributed to Millennial employees of corporate research partners from various industries, as well as a generic survey with respondents representing more than 300 companies and organizations across the United States. For the study, Millennials were defined as individuals born after 1979.

As I’ve discussed in previous posts, Millennials place a high value on corporate social responsibility. Achieve’s research looks specifically at the role “cause work” plays in motivating Millennials overall – from job search, application, through to employment. Consider that of the Millennial employees surveyed, 92% felt they were actively contributing to a company having a positive effect on the world. Where cause work starts motivating Millennials though, may differ a bit from our assumptions. Of those surveyed, 63% of Millennials said that a company’s involvement with cause work and community initiatives did not factor into the search that resulted in their current job! This contradicts the common assumption that cause work matters from the beginning of a Millennial’s job search. Achieve discovered that, in fact, most Millennials first looked at what a company does, as well as pay and benefits, when deciding whether or not to apply. Cause work was not a significant factor. While only 39% of Millennials reported their company discussed cause work during the interview process, the companies that did do this, influenced interviewee’s decisions. Of the Millennials who heard about cause work in the interview, 55% of them said the company’s involvement with causes helped persuade them to take the job. Bottom line: mention cause work in interviews – especially with Millennial candidates!

Job Search Process

Another trend that I have previously discussed is Millennials’ relationships in the workplace, specifically that Millennials have a tendency to build close friendships and desire to work with those they know and would be friends with outside of work. This desire also presents itself in Millennials’ preferences for company-sponsored volunteer projects/programs. Of the Millennials surveyed, 77% preferred to perform cause work with groups of fellow employees as opposed to doing independent service projects. More specifically, 62% of Millennial employees preferred volunteering and doing cause work with employees in their same department rather than employees in the company they didn’t directly work with.

What Inspires Millenials

For Millennials, relationships also play an important part in informing candidates about a company’s causes. Information from past and current employees was the third most common source for Millennial employees who researched their company’s cause work (36%). The most common source of information was the company’s website (93%), followed by Google Search (61%). These top three sources, including word-of-mouth, beat social media outlets Facebook (22%), LinkedIn (12%) and Twitter (11%).

One last interesting area of commentary from Achieve’s report is how Millennials view the assets they can potentially donate. As it’s put in the study: Millennials differ from previous generations in that they “may still give money, time and skills, but they also view their network and voice as two very beneficial assets they can offer a cause. For Millennials, all of these resources are equal in how they may help a cause. A Millennial may see Tweeting about a cause as a way of giving resources, because they are donating their network.” When it comes to giving, Millennial employees donate money to nonprofits both on their own and through their company’s promoted giving campaigns, and they donate generously! Only 13% of the Millennials surveyed did not donate money to nonprofit organizations in 2013.

Donations

This report tells us that Millennials consistently defy employers’ expectations along a broad continuum. We need to pay attention, continue to ask questions, and learn to meet them on their own ground. Who would have thought that company websites and Google searches would be far more powerful (and motivating) than social media in this aspect of job search behavior in the Millennial cohort? And it’s interesting to note that camaraderie in their workgroup – not in their employer in general – is motivating for them. That’s one piece of data that is consistent with what we know about all cohorts in the workplace: we all want to trust our leaders, have pride in our work, and camaraderie within our workgroups. Great Place to Work has been validating these data points for more than 20 years.

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5 Talent Acquisition Trends to Watch

Data Point Tuesday
Ultimate Software
(#20 on this year’s FORTUNE 100 Best Companies to Work for list) just released a whitepaper that looks at 5 top talent acquisition trends in today’s market. As much data as we might see on talent acquisition, it’s a perpetually interesting topic to look at because (and Ultimate Software puts it well), “A company can have the right technology, the right infrastructure, the right products and services – yet still fall short of expectations without the right people.” People are the heart and soul of an organization, and attracting, hiring, and engaging the right people for an organization is vital to its growth and success. Ultimate Software highlights that over the past five years we’ve seen a huge change in the landscape of talent acquisition. We’re still in the midst of an ongoing economic recovery and Millennials, who are the largest generation in history, (~95 million compared with ~78 million Baby Boomers) are currently filling one out of every three positions in the United States. By 2025, they are projected to make up 75% of employees in the global marketplace. Add this to the incredibly competitive, fast-paced, technologically advanced, and increasingly inter-connected world that we live in and hiring the ‘right’ person becomes “both more difficult and more important than ever.”

Out of the 5 Top Talent Acquisition trends that Ultimate Software details, “User Experience” is number one. Over the last five years, companies have increasingly focused on the “candidate experience” in talent acquisition (see the ground breaking research done by Gerry Crispin’s and Elaine Orler’s Talent Board), putting themselves in the job seekers’ shoes with a focus on treating them like a unique individual or “the customer.” When Ultimate Software discusses “User Experience” as a talent acquisition trend though, they’re talking about a more recent trend than focusing on candidate experience, one that emphasizes user experience in terms of designing or selecting a recruiting solution. In the same way that people expect exceptional user-experience from consumer-level technology like their smartphones, employees now expect the same level of ease-of use with recruiting solutions technology in the workplace. Candidates themselves also expect an easy (and mobile) user-experience when searching for and applying to positions. Not being able to do this on a smartphone, for example, has become a huge barrier to entry.

Trends two and three are “Personalization” and “Social Connections and Collaborations.” Personalization, in the context of talent acquisition, is described as “the fusion of a positive user experience with an emphasis on the individual.” Essentially, organizations that treat candidates as individuals and potentially valuable employees from the beginning of the recruiting process have a number of advantages. Using a more personal, behaviorally based interviewing approach can lead to better information for the recruiter (they may for example find a candidates fits well for another role) and a more engaged candidate. It may also help candidates leave with a better impression of the organization overall, and prevent what Ultimate Software calls the “candidate black hole” (referring to the statistic that nearly 50% of job applicants never get any response after submitting an application). “Social Connections and Collaborations” refers to talent acquisition solutions integrating with social media platforms (think LinkedIn and Facebook) to leverage more effectively the vast amount of useful information on candidates that these platforms provide. Note that 89% of all job seekers report using social media sites and almost 50% report using these sites every day.

“Global Recruiting” and “Recruiting Millennials” make up the last two trends in the whitepaper. Successful organizations have embraced the advantages of creating a more global workforce, leveling technology like video interviewing and telecommuting to find the right candidate for the job, no matter where in the world the might be. Ultimate Software cites data from a recent KPMG survey, which reports that 71% of HR executives feel that collaborating across international borders is more prevalent today than just five years ago, and more than 50% are considering or have added new international offices. The “Global Workforce” is here to stay. Last but not least, successful talent acquisition programs have been specifically addressing Millennial candidates applying for positions – a smart move when we consider that they’re projected to make up 75% of the workforce by 2025! This attention on Millennials does not necessarily comprise a total remaking of the talent acquisition process, but a purposeful implementation of changes to the recruiting process – like keeping in mind that 83% of Millennials own a smart phone, or that Millennials place a high value on an organization’s mission, purpose, and culture.

Together these 5 trends point to new realities for organizations as they plan to add new talent to their ranks. It’s not just demographics that are changing. Social technologies are changing our ability to engage and retain the right people – where and when we need them. And that spells big opportunity for organizations who believe that people are at the heart of the cultures and their successes.

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Purpose: A Hedge Against Organizational Challenges

Data Point Tuesday

The Deloitte “2014 Core Beliefs and Culture Study” proves it again, that those workplaces who focus on creating a meaningful environment for all their stakeholders (customers, employees, and communities) foster a culture of purpose that builds confidence, drives investment, and “can lead to competitive advantage in a time of economic vitality.” The survey was conducted in February of this year and is designed to explore the concept of workplace culture, defined by a set of timeless core values and beliefs, as a business driver. This year’s survey looks specifically at whether a strong sense of purpose leads to higher levels of confidences among stakeholders and drives business growth. Methodology included the survey of a sample of 1,053 adults (300 executives and 753 employed adults) employed full time within an organization with at least 100 employees.

Evidence from the survey indicates that focusing on purpose rather than profits is what builds business confidence. What do organizations define as purpose though? When respondents were asked about activities that are part of the purpose of their organization, the top 5 cited answers were:

  • Providing business services and/or products that have meaningful impact on clients/customers (89%)
  • Providing business services and/or products that benefit society (84%)
  • Providing employees with education, experience, and/or mentorship benefits (77%)
  • Encouraging employees to volunteer (74%)
  • Generating financial returns for our stakeholders/shareholders (69%)

Deloitte “2014 Core Beliefs and Culture Study”

Deloitte also found that those respondents who agree they work for an organization with a strong sense of purpose were more likely to say their organization recorded positive growth (81% vs. 67%) and outgrew competitors (64% vs. 44%) in 2013. When looking to the future, respondents who say their organizations have a strong sense of purpose are also much more optimistic about the future prospects of their organizations: 91% of respondents who believe their organization has a strong sense of purpose feel that their company will maintain or strengthen its brand reputation and loyalty vs. 49% of respondents at organizations without a strong sense of purpose.

Organizations with a strong sense of purpose tie confidence to three main factors:

  • a commitment to delivering top quality goods/services
  • focus on long term sustainable growth
  • clear understanding of organization’s purpose and commitment to core values.

Companies reporting they do not have a strong purpose however, find confidence tied almost exclusively to financial factors:

2014 Core Beliefs and Culture Study

When looking at priorities of leadership at these companies, we see a similar trend. For organizations that report having a strong sense of purpose, making a positive impact on clients is ranked most often as the top priority for leadership vs. leadership at companies without a strong sense of purpose, who most often report short-term financial goals as their top priority (the study notes that there were no major differences in top leadership priorities as stated by employees and executives).

Purpose also appears to drive investment. Respondents at organizations with a strong sense of purpose are consistently more likely to say their organization will increase investments year over year than companies without a strong sense of purpose, especially in areas such as:

  • New technologies: 38% vs. 19%
  • Expanding into new markets: 31% vs. 21%
  • Developing new products/services: 27% vs. 17%
  • Employee development and training: 25% vs. 11%

Companies with a strong sense of purpose also perceive higher levels of confidence among key stakeholders – 89% of respondents say their clients trust that they deliver the highest quality products and services (vs. 66% at organizations without strong purpose).

If this data isn’t enough to suggest that there really is something to creating a strong sense of purpose and values at an organization, Deloitte’s data also detail that more fully engaged employees, greater diversity, and encouragement of innovation are also more present at organizations reporting a strong sense of purpose. Despite the benefits though, 20% of respondent’s state that leadership fails to set an example for the rest of the organization by truly living the organization’s purpose and 18% say it is not part of performance evaluations.

Once again, the data are persuasive. Organizations with strong missions that are focused on more than profits are clear winners creating successful, sustainable businesses. Put another way, creating a strong purpose-focused culture may be the best hedge against the difficult economic, political and talent challenges facing most organizations today.

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