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July 2009

Embedded Entrepreneurship

Isn't it funny, how ideas spread? I heard recently about how sheep in Yorkshire have learned to cross cattle grids by rolling over them. They have been confronted with this challenge for at least a hundred years and have only just figured it out. Yet the truly amazing thing is that sheep in Australia made the same advance at the same time! Do you suppose they emailed one another?

I experienced something of this phenomenon myself this past week. On the 15th June I wrote a blog entitled "Who do you really work for?" In it I argued that we all ultimately work for ourselves and need to recognise that and do more for our "personal brand." Well, this week I read an article in the Gallup Management Journal entitled, "It's Time to Brand Yourself." It talked about the need to develop "a clear brand strategy.. to make sure you are portraying yourself in a way that achieves your objectives."

Some of the points that stood out for me were:

  • The 3 key components are your purpose, your point of view, and your principles and they are about more than just your job.
  • Great brands are demonstrated, not told. You need a sense of control and a way to ensure that your employer is seeing the unique value of what you bring to your work.
  • It boils down to sustainable differentiation.
  • You must think of yourself as an "embedded entrepreneur"; you work within the firm for the good of that firm, but equally you seek personal benefit now and into the future.
  • You might need to shift your mindset to understand this correctly.
  • You must be confident that your brand is not only true to you, but that it's also relevant to your boss - and that it makes sense to your company's culture.
  • Once you know your talents, you need to know your consumer's talents.

Fascinating stuff! But all employee centred. What is missing is the mirror image, for employment is a double-sided coin: for every employee there has to be an employer, and thus these arguments apply just as strongly in reverse. Yet there is no suggestion of that.

An employer wanting engaged employees, should be looking at creating an environment that embeds entrepreneurship. Yet I have seen nothing that come close to matching my solution to engender employee engagement and such embedded entrepreneurship. The employee centric "embedded entrepreneurship" they are writing about is the "intrepreneurship" that I promote, and is best created through employee ownership, which my Zealise solution provides.

To go or not to go? A Work Dilemma

A key measure of employee engagement and focus of much HR attention is employee absenteeism - people taking unwarranted time off work. Of course, not being at work 'when you should be' technically means you are in breach of your employment contract, and can be taken very seriously. One local council regards this offence so seriously that it is considered to be fraud. People suspected or accused of serial offences are investigated by the counter-fraud team and face possible criminal charges if the allegations are found to be true.

This seems heavy-handed, but with absenteeism estimated to cost the UK economy £750m a year in lost productivity, the council justifies this as necessary to safeguard their ratepayers' money.

However, these tactics miss the bigger picture and so breed an ever bigger problem. According to a 2008 government report, employee presenteeism - people being at work when they shouldn't - costs the UK economy £966m a year. So absenteeism costs us nearly three quarters of a billion pounds, but presenteeism costs us nearly a billion!

These figures are highlighted by Professors Cary Cooper and Sue Cartwright from Lancaster University in the July edition of Professional Manager, in an article entitled, "Counting Cost of Presenteeism." They see it as a health issue and, quite validly, argue that while "enlightened employers already take workplace health issues seriously" there is a wider need for others to follow suit. They quote estimates that more flexible working arrangements produce a return of $3.50 for every £1 spent: i.e. a 350% return!

Such figures seem to suggest that it should be a no-brainer, yet they say that "few managers are aware of the impact their behaviour can have on the people they manage." Implying that it is all management's fault, they blame such factors as insensitive, bullying or abrasive management styles, all exacerbated in a time of increased economic pressure.

Now nobody can fault this logic, but there are three things that stand out for me in all this.

Firstly, the unconscious dichotomy between workers and managers seems to assume that managers themselves are not subject to these patterns. The very pressures that Cooper and Cartwright see as contributing to the problem are the pressures that managers face all the time, and even more so during an economic downturn. Managers need the same thinking time that they are seeking for the employees, as well as the right environment to try new ideas.
Secondly, that absenteeism and presenteeism are not necessarily opposites. The case is made that short term presenteeism causes longer absences because of its detrimental affect on health, but some absenteeism may be 'justified' on the basis of past presenteeism. Either way, eliminate the latter and you may significantly reduce the former.

Lastly, but perhaps most significantly is their statement, "The time one spends at work has become a proxy measure for work effort and commitment." Here is the key to the whole problem, because we, as a society, are still shackled by the belief that we work for a fixed number of hours rather than our inputs and outputs. Breaking this mindset is surely attacking the dual problems of absenteeism and presenteeism at their roots. The question then is no longer one of whether to go to work or not, but "Have I done what I need to do?"

Seal the Deal with Your People!

Despite the gloomy statistics of the employee engagement surveys that indicate such high levels of employee disengagement, there are many companies out there that do not have a problem.

Some of those are organisations that are run on the basis of organisational democracy as promoted by my friend Traci Fenton at Worldblu; businesses that subscribe to the 10 principles of organisational democracy.

Apparently thousands of others "from start-ups to Fortune 500 conglomerates are using Great Game principles to achieve breakthrough results." These principles are rooted in "The Great Game of Business" as developed by Jack Stack and his colleagues at Springfield Remanufacturing Company (SRC). I only learned about this last week, but for those of you who are in the position I was in then, the story makes interesting reading.

With 12 colleagues and $100,000, Stack borrowed $9 million to purchase the failing division of International Harvester. Knowing that traditional management practices were not going to turn around the business in anything like the timescale needed, Stack recognised the need for a bold new way of managing. Accordingly Stack "took the elements of any game (teams, rules, scores, results), applied them to the daunting task of righting SRC" and got his people involved. They came to understand that their daily work does matter and that they could make a difference. As a result remarkable gains were made, and the 89-1 debt equity was reduced to 5-1 in just a few years and other people management issues "dropped precipitously."   

Naturally I relate to this approach, because it coincides with my conviction that any organisation is ultimately a team. This approach thus just delivers a practical means to effect that philosophy, and its initial success and subsequent replication elsewhere proves it works.

Both approaches deliver results that buck the trend (and make you wonder how bad employee engagement survey results would be without such organisations!) They prove, if further proof is needed, that treating people with respect is a fundamental element of sustained success. In light of this you might then question what difference my approach of valuing people would make. If you can achieve such results with greater democracy and "open book management" why would you need to go to the trouble of creating a new administrative process with all that entails?

It is a valid question, but the answer is simple. Valuing your people offers a way to create employee ownership that is fundamentally simple and more attractive than traditional employee share ownership plans (ESOPs.)  It embeds the theory and practice of making people think and act like owners and is irreversible and not subject to the vicissitudes of management changes. Thus you could say it seals the deal - and very effectively.

How fair is your business?

Nobody has ever described life as being fair. Nor is there any obvious reason it should be. Yet we all somehow expect it to be. Why? It would seem that we are all born with some sort of innate sense of justice that demands fairness. From the time we can first talk, we seem to be obsessed by it. Many a playground dispute starts with a perception that "it's just not fair!"

And it doesn't end there. Work place conflict or international political conflict, like all conflict, can be attributed to a feeling of unfair treatment. "Unfair dismissal" is recognised as a legitimate ground for industrial action. The recent strike at the Lindsey Oil Refinery began because workers were united in the conviction that the dismissal of 51 of them was 'unfair', and their ultimate total victory (no pun intended) suggests that their actions were justified.

The concept of fairness can therefore be very confusing, stretching from a loose, ambiguous concept, bordering on the ideal, to a legally enforceable principle. It is therefore useful to dig a little deeper into the word, which is defined in part as:
"Fair: (Adverb) … Open, frank, honest, hence equal, just, equitable." Webster's Student Reference Dictionary.
There is an immediate conundrum here, because clearly people are not equal, nor is it reasonable to expect them to be treated equally. So clearly the word's relevance has to be determined by the context, and the extent of equality has to stem from the degree of openness, frankness and honesty. This leads back to the headline question and its applicability to business generally, and your business specifically.

Treating your people fairly demands you apply openness, frankness and honesty universally across the organisation. Failure to do so across the board leaves you open to conflicts and disputes and will inevitably impact on your results. I guess that is why "fairness and dignity" is one of the 10 key principles of organisational democracy. 'Command and control' management is widely recognised to be passed its sell-by-date and yet there are few alternatives being put forward as to how it could, or should, be replaced. I believe this principle being espoused by Worldblu provides the logical platform. What do you think?

If you are truly committed to a 'fair' workplace you certainly cannot disagree with fairness and dignity. And if not, there should be no reason why you cannot agree with the others. If you truly value your people as your most important asset, this is a very good launch pad, and the Zealise solution will help you to succeed.