Every Single Employee Should Understand the Business
A discussion based on chapter 2 of 'Powerful: Building a Culture of Freedom and Responsibility’ by Patty McCord
For years, thought leaders have written about how important it is for employees to know the company values… and even better when employees play a part in choosing those values and defining how they influence key decisions and behaviours. In chapter 2 of her recently published book ‘Powerful: Building a Culture of Freedom and Responsibility’ by Patty McCord takes this theory and expands upon it.
Patty McCord was Chief Talent Officer at Netflix and is currently a consultant, speaker and author. In chapter 2 of ‘Powerful’, Patty shares her theory that employees should be empowered with more than values and vision, but also every single employee should understand the business. Patty writes, “Employees at all levels want and need to understand not only the particular work they are assigned and their team’s mission, but also the larger story of the way the business works, the challenges the company faces, and the competitive landscape.”
I completely agree and believe this level of transparency is healthy. Imagine a workplace where every employee understands the business and the impact when they make good decisions versus not-so-good decisions. In my work as a corporate trainer and executive coach I see the power when employees have a clear understanding of the whole business which includes:
- Who the competition is and why they the competition
- Where the organization is profitable… and also where their department is profitable
- What products / services make the most revenue… and also the least revenue
- Which products / services are more resilient to change
- How ‘I’ (each employee), make a contribution to the team
Imagine feeling this level of trust and respect from your employer.
Communication And Expectations Are Set by the Organization's Leaders
As I tweeted the other day (@BMCtrainercoach), “An organization’s cultural tone is set and/or tolerated by its leadership.” When everyone is focused on the same values, the solution is like gravity… the solution will be found efficiently, with less waste and less bureaucracy.
We see here that Patty’s experience shows this approach is more than empowering employees with information. Patty believes that when employees understand the business that they can do away with many of the rules, processes, approvals and bureaucracy. She uses her own experience at Netflix as an example. She writes, “"What takes the place of rules, processes, approvals, bureaucracy and permissions?" The answer: Clear, continuous communication about the context of the work to be done. Telling people, "Here's exactly where we are, and here's what we're trying to accomplish."”
Actions Speak Louder Than Words
Patty continues to share her success at Netflix empowering employees and reducing the layers of control around many decisions. But if you are not happy with that example, let’s look at The Ritz-Carlton’s $2,000 rule and how they empower their employees.
In short, the Ritz-Carlton’s $2,000 rule empowers every employee, from the lowest paid to the highest paid with the ability to make an adjustment of up to $2,000/day per guest to correct a customer experience or to delight a customer. Following the adjustment, the employee is required to write a quick explanation describing the situation and the reason for the corrective action they took.
$2,000 sounds expensive, right? Not to worry, as I understand it the average spend is less than $70.
What are the benefits? The Ritz empowers their employees to make sure customers get excellent service and/or challenging situations get corrected on the spot without having to wait for the employee to seek management approval. In short, the Ritz chooses to prioritize relationships over bureaucracy and permissions.
The Ritz policy turns a normally bad situation for the customer and employee into a positive, empowering situation for the customer and employee. Patty does this as well but takes that approach a few steps further by empowering everyone in the organization with information so they can quickly and efficiently make informed quality and relevant decisions without having to go through layers of bureaucracy.
Which leads me to one more benefit I want to share. Employees feel trusted, respected, empowered and… employees feel safe. All of these are intrinsic motivators. Employees that feel trusted and respected are more likely to take greater pride in their work and be more responsible. That’s not all. When employees feel intrinsic motivators like trust, respect, recognition and empowerment they also feel a closer relationship to the organization and will therefore be more loyal to the organization. The net result is engaged employees who (on average), will stay two to three years longer before moving on (source: Bruce Mayhew Consulting’s Millennials At Work Survey).
When employees feel safe, trusted and respected they are also more likely to speak up with creative ideas, ask important questions and add insight based on their experience. And, as Patty writes, “It also encourages people to ask questions and share ideas, which can lead to extremely valuable insights about how to improve your products, your service to your customers and the business itself.”
Responsibility is critical for any of this to work. Patty believes every individual also needs to know what is expected of them and what to expect from the people around them, Patty writes. “Expectations have to be clear.” And this goes for everyone. Patty stresses that everyone should know, “This is what you should expect from one another and absolutely expect from your management.”
Should that be difficult? I don’t think so. But it all boils down to good communication.
Communication is the largest single factor determining every relationship we have… good or bad. If we are not communicating our relationships cannot be healthy. If we are not communicating how can we expect to make S.M.A.R.T. decisions? Everyone must know, and everyone has to take responsibility for their work, but they can only do this when they are not working with blinders on (as my Dad would say).
With a small investment in our employees – perhaps an hour meeting on a weekly basis, we can begin to change the culture of the organization from traditional information-based silos to an empowering, trusting place. As I posted in a recent Tweet, "Without #Trust and #Respect work is just a place where we wait for a paycheque. As a #Leader, help every employee understand the goals of the business and how you trust and respect their individuality and their talents. Work together, grow together and... achieve your goals together." NB: I love Twitter went to 280 characters.
As a manager / leader, do you have to wait for your whole organization to adopt this before you do? I don’t think so. Do what you can for your department / your team. Keep everyone informed as much as possible. Hold weekly team meetings – share the values and vision. Get everyone on the same page. Share what you know about the mandate – the risks. Remind everyone about the values and the vision. Trust them with knowledge.
Chapter 3 of 'Powerful' is called. ‘Humans Hate Being Lied To and Being Spun.’
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