The Economic Times

Motivating to share ownership

Do you wish you knew what your employees did when no one was watching? Are they motivated to act like owners? Do they know how to innovate and advance the business without being told explicitly what to do?

Par Orit Gadiesh and Ashish Singh

First published on août 10, 2006
min


What do people at your company do when no one is watching? Are they motivated to act like owners? Do they know how to innovate and advance the business without being told explicitly what to do? Every leader wants to be able to answer these questions with an unqualified "yes," but in a recent Bain & Company survey, more than a third of executives could not agree with the statement, "Our stated values effectively drive frontline actions, even when no one is looking." World-class performers see things differently. There, employees want to do the right thing, not just the easy thing. And they not only know what they should do, they know why they should do it. How do these standout companies ensure everyone acts in the best interests of the company? The answer: culture. Culture provides the glue that creates a sense of shared purpose. Bain surveys indicate that business leaders fully recognise how culture can engage employees, yet only 15% of them succeed in building high-performance cultures that become the powerful enablers of organisational transformation. Culture is essentially the organisation's soul. A firm's heritage plays an important part. But culture must also be molded and actively managed. In fact, a crucial job of company leaders is to do just that. High performers recognise that their company's character provides a necessary ingredient for great teamwork and esprit, and they continuously reinforce a shared set of practices and beliefs using natural events—an acquisition, say, or a change in strategic direction. At Bain, we examined the links between financial outperformance and high-performance cultures at 200 companies and combined that analysis with case studies of three dozen high performers. The research sharpened the common elements to six key attributes: Know what winning looks like. High-performance organisations know what winning looks like, and they know how to get there. To them, winning is rarely focused on financial success. Short-term financial victories please markets, but a culture that measures success primarily in those terms rarely creates a passion for results. Look out the window. High-performance companies also focus on what's outside: customers, competitors and communities. A strong community focus provides more than just good PR; it builds goodwill both inside and outside the company. Think and act like owners. A hallmark of a high-performance culture is when employees take personal responsibility for performance. Having a stake helps, of course, but more important is the extent to which they think and act like owners.Commit to individuals. High-performing cultures make a point of investing in individuals at all levels of the organisation, realising the company won't achieve its full potential unless its people do. At HCL, president Vineet Nayar transformed the company's culture through a radical "employee first" programme. One feature is a review process during which HCL employees rate their boss, their boss's boss and any three other managers they choose, and the results are posted online for every employee to see. HCL customers are buying into Nayar's belief that putting employees first helps reduce attrition and creates a workforce that can better focus on the success of customers. Spread courage to change. Taking risks is hardly a goal in itself, but firms with high-performance cultures find ways to make risk acceptable. Build trust through debate. Cohesive teams trust one another. They aren't afraid to engage in conflict around ideas, but once they commit to a decision, they commit to a common plan. Each of these six principles on its own contributes to a stronger and more coherent culture. But the real measure of high-performance culture is the ability to nurture and combine all six. Companies must create the confidence and the courage to change. Employees will understand what types of risk to embrace when organisations clearly define the picture of winning and the strategy to get there. Then, and only then, can employees think and act like owners, often the first milestone in building a truly global high-performance culture.

What do people at your company do when no one is watching? Are they motivated to act like owners? Do they know how to innovate and advance the business without being told explicitly what to do?

Every leader wants to be able to answer these questions with an unqualified "yes," but in a recent Bain & Company survey, more than a third of executives could not agree with the statement, "Our stated values effectively drive frontline actions, even when no one is looking."

World-class performers see things differently. There, employees want to do the right thing, not just the easy thing. And they not only know what they should do, they know why they should do it.

How do these standout companies ensure everyone acts in the best interests of the company? The answer: culture. Culture provides the glue that creates a sense of shared purpose. Bain surveys indicate that business leaders fully recognise how culture can engage employees, yet only 15% of them succeed in building high-performance cultures that become the powerful enablers of organisational transformation. Culture is essentially the organisation's soul. A firm's heritage plays an important part.

But culture must also be molded and actively managed. In fact, a crucial job of company leaders is to do just that. High performers recognise that their company's character provides a necessary ingredient for great teamwork and esprit, and they continuously reinforce a shared set of practices and beliefs using natural events—an acquisition, say, or a change in strategic direction.

At Bain, we examined the links between financial outperformance and high-performance cultures at 200 companies and combined that analysis with case studies of three dozen high performers. The research sharpened the common elements to six key attributes:

Know what winning looks like. High-performance organisations know what winning looks like, and they know how to get there. To them, winning is rarely focused on financial success. Short-term financial victories please markets, but a culture that measures success primarily in those terms rarely creates a passion for results.

Look out the window. High-performance companies also focus on what's outside: customers, competitors and communities. A strong community focus provides more than just good PR; it builds goodwill both inside and outside the company.

Think and act like owners. A hallmark of a high-performance culture is when employees take personal responsibility for performance.

Having a stake helps, of course, but more important is the extent to which they think and act like owners.Commit to individuals. High-performing cultures make a point of investing in individuals at all levels of the organisation, realising the company won't achieve its full potential unless its people do.

At HCL, president Vineet Nayar transformed the company's culture through a radical "employee first" programme. One feature is a review process during which HCL employees rate their boss, their boss's boss and any three other managers they choose, and the results are posted online for every employee to see. HCL customers are buying into Nayar's belief that putting employees first helps reduce attrition and creates a workforce that can better focus on the success of customers.

Spread courage to change. Taking risks is hardly a goal in itself, but firms with high-performance cultures find ways to make risk acceptable.

Build trust through debate. Cohesive teams trust one another. They aren't afraid to engage in conflict around ideas, but once they commit to a decision, they commit to a common plan.

Each of these six principles on its own contributes to a stronger and more coherent culture. But the real measure of high-performance culture is the ability to nurture and combine all six. Companies must create the confidence and the courage to change.

Employees will understand what types of risk to embrace when organisations clearly define the picture of winning and the strategy to get there. Then, and only then, can employees think and act like owners, often the first milestone in building a truly global high-performance culture.