There are significant differences between different regions that are noteworthy. In the US productivity (in per hour terms) actually grew 2.5%. This was explained by how companies in the US quicker and more drastically reduced their workforce to make the cost side of the productivity equation smaller. Productivity growth in the US is projected at 3%.

It’s interesting to contrast this to the European productivity growth that turned negative in 2009 where output per hour fell 1 percent.

“These are unusually large differences in productivity growth between the United States and Europe,” said Bart van Ark, chief economist of The Conference Board. “U.S. employers have reacted much more strongly to the recession than their European counterparts in terms of cutting jobs and hours. In 2010, both Europe and the United States will see higher productivity growth coming out of recession. However, a jobless productivity recovery is the most likely scenario in both regions.”

It’s also very interesting to see how for example the Chinese market at the same time had a productivity growth of 8.2%.

Good luck with your growth and productivity gains in 2010.

I read this blog from a recent customer of ours http://www.core3solutions.com/home/ A small niche IT -solutions provider.

As a small business in a service industry, productivity and profitability depend almost entirely on our employees performing at their full potential. The challenge is then how do you effectively manage performance? How can a small organization streamline human resources through meaningful performance reviews, aligning employee goals to organizational goals, and make informed decisions when recognizing top performers…

For them the answer is to leverage our Business Execution software.

By the way you have to check out Roxie – their Director of Entertainment

 So how do you do it?   Here’s a hint, why not simply imitate processes that they engage in during their time outside of the office?   In the very new future your company is going to have to shift to Enterprise 2.0 much like the internet shifted to Web 2.0.    Your employees are very good at sharing ideas, collaborating across functional lines, and engaging in valuable conversations with their peers.  The problem is that they’re doing this in their personal lives much more than their professional ones.   Take Facebook for instance.  In one week this year, and estimated 5 million people posted “25 Things about Me” to their profiles.  That’s literally 125 million facts that people shared in 7 days.  Were all of those items valuable?  Of course not, but what if Companies could harness that type of collaboration?  Do they even know 5 things about their People?  I’m not talking about their dog’s name, but do they know who speaks Mandarin, has a background in Investment Banking, or aspires to be a Chief Strategy Officer?   What would that type of knowledge sharing and collaboration do for team building?  Goal Setting?  Or just the overall ability to Execute?   The potential value is almost limitless, but only if companies start to realize that this level of collaboration only happens in an environment of transparency, one without the traditional barriers of silos and org charts that “compartmentalizes” their workforce.    The companies that understand Enterprise 2.0 are likely to be the “winners” in the coming decade.

According to an adviser David MacLeod to the group behind this research Department for Business, Innovation and Skills (Bis) there’s a huge loss at stake.

“This is just one example of how poor employee engagement can put the brakes on improved business performance. If leaders don’t explain where the business is going and what it’s seeking to achieve, how can people be motivated or know what they’re meant to contribute? Clear goals are a key ingredient for achieving performance and productivity – but worryingly this research suggests many employers haven’t yet grasped this for 2010.”

MacLeod further said that the financial benefit of engaging with staff is very real – if employer actions raise engagement by just 10 per cent, they could typically increase profits by up to £1,500 per employee per year.

Well I don’t know the details behind this particular study but it’s very consistent with tons of other research on the topic of the financial benefit from increasing people’s engagement levels from helping them know what to do. After all who’d argue that not knowing where the company’s heading nor not knowing what to do would make any sense at all.

Full post on the study results can be found here.

What is more important of course is to understand what drives individuals commitment or engagement levels. We know that understanding how what you do on a daily basis matters to the company and your customers is a key factor. What if you could get instant feedback on how you’re doing. I mean instant like in sports when people applaud or buh every move.

I just got back from a business trip to China and at the new airport in Beijing when going through customs you get the opportunity to provide instant feedback to the passport officer on duty. Talk about taking this seriously empowering the customer to provide instant feedback and the company in this case the government of China to take instant action to resolve any immediate issues as well constantly learn how to improve and become better.

On a side note if you’ve been through Heathrow lately I’m sure you understand and sympathize with me when I say that we all would want a way to provide feedback and help them improve as well. Happy travels!

I wanted to get his opinion on all things Engagement – What is it?  Why don’t companies understand it? What can they do about it?  He offered some great insight, even better sound bites, and a compelling argument as to why this is THE business challenge the will separate the winners from the losers during the economic recovery.

Seven questions and answers that will be sure to lead your organization to Engagement bliss, or simply scare you to death.   One thing is for sure, if your company wants better execution, then your organization better address the engagement issue now or it will address your organization later.

Take a look and let us know what you think.  I’ll make sure Brad responds to any questions that you may have.

Many books have been written about the topic of Employee Engagement.  What makes this one different?

(Answer) First, most books on Engagement tackle a piece of the subject, but do not take a holistic view providing the reader with a less than realistic view of what engagement really is.  It would be the equivalent of educating someone on small business loans and giving them the impression that they understand everything there is to know about the economy.  Second, this is not an HR book.  This is a business book for managers, leaders, and executives who want to grow their organization regardless of their function. 

Why do you think so many companies still have a problem grasping this concept?

(Answer) The entire economy has been turned upside down, the employer-employee relationship has been turned on its head, a generational shift is occurring in the workplace, technology has dramatically altered how we communicate and perceive one another, yet most of our tools, structures and research we use as well as the habits we live by come from the 80’s and 90’s.  We have yet to catch up to our current reality.  Some don’t recognize the changes, others hope things return to what they coin “normal”, and many that recognize and grasp our new reality struggle with how to act on it.

World at Work recently released a study stating that Engagement has decreased 9% worldwide and 20+% among high-performers.   Did this surprise you?   What do you think the implications are for companies trying to navigate what appears to be a slow moving economic recovery?

(Answer) No it does not surprise me about this study.  The implications are simple and straightforward.  Those that focus on engagement now will recover faster and stronger than those that do not.  Many organizations are still healthy because they never lost sight of engagement during this difficult period.  When the economy does recover, the floodgates will open at certain organizations and they will lose their intellectual capital.  But that is not the scariest part.  The scariest aspect is that that there are companies right now that do not realize the bad shape they are in with their business. They blame their ills on the economy.   My question for those organizations is…You may have the bodies, but how many souls have left the building?  Without spirit they don’t have a business. 

What do you consider the top three reasons for decreased engagement?

(Answer) Fear, Control, and Self Interest starting with senior leadership then cascading down from there.  The ingredients that create strong, productive relationships are also the same ingredients that create healthy, dynamic organizations – Trust, Transparency, Authenticity, Ownership (accountability), Creativity and Resourcefulness.  Unfortunately difficult circumstances cause many organizations, specifically senior leadership, to neglect what is important.  During difficult economic times people tend to act or make decisions based on fear, concerns, or anxiety.  All of us have fears, concerns, and anxiety but if we are able to admit when we are falling prey to them and work through those issues with others then we are able to make healthier decisions.  When stress and fear take over we look at the world in exclusive terms and in limiting ways.  We become focused on mitigating risk and lose sight of opportunity.  We decide to put in a number of controls to create predictability and political jockeying goes into overdrive because everyone wants to keep their job.  These types of behaviors not only spread and change the culture of an organization, but they hamstring the very people who can help us survive these challenges and come out of the other end.  Stress and fear can either be our jailor or our counselor.  It is our choice.  Too many leadership teams during downturns like this one choose, consciously or unconsciously, the jailor and then rationalize it to make themselves feel comfortable.

Many CEO’s still view Engagement as Soft and HR-ish.   Assuming one of them gave you 30 seconds to convince him/her that this is important, what would you say?

(Answer) First of all I would love to have more CEO’s give me 30 seconds.  Any takers?  More importantly, I would like to see a CEO convince me that it is not important.  But since you are asking the questions, here it goes…I would ask them “What factor(s) is most paramount to their success? “  Is the answer is product innovation, sales, service. My next question is going to be “How do your people impact service, sales, product innovation?” Then I would ask them “Why it is acceptable to only 11-24% of their employees proactively helping the organization toward that goal?”  Last I would ask them “What do they think the impact is?”  Seriously, we would not settle for a manufacturing plant at 70% capacity, so why would we settle with our people.   We shouldn’t. We should invest in them.  

Can you share a success story from a company that has made significant improvements in Engagement and the business impact of doing so?

(Answer) We worked with a high tech firm.  They were using a home grown survey that had too many questions, was not tied to research, and was not adding any value.  The survey was seen mainly as an HR activity.  They decided to make a change and they went with our survey the Engagement Index.  The first year that we worked with them the feedback illustrated very low levels of Engagement.  We were very clear with them about which issues were needed to be resolved in order to get an ROI from this process.  We also helped them with follow up, focus groups, and action planning.  Leadership was seen as a large portion of the issue.  There was a real lack of trust in their senior leadership.  First came a bit of shock, then regret, and then the excuses.  We helped them process the feedback and they came to the realization that not only did the organization have to make changes, but their leadership had to as well.  We have worked with them for four years now and their engagement levels have significantly improved.  There leadership is now trusted, and people believe in the mission and direction of the company.  Many employees shifted from being angry, complaining, sabotage – to pulling for the company even during difficult times.  Financials had been going south, but one year into our efforts they were able to create an 11M positive shift in profit and the engagement numbers and financial numbers have continued to go in the right direction.  They have taken the shackles off of their employee’s hands, allowed them to get back to work, and work passionately together along the way.  

Shameless Plug Time – Say anything you want here to convince readers as to why they should purchase this book.

(Answer) This is a book about business, but more importantly, it is a book about life.  The book will help you improve your relationships, team, division, organization, or strengthen customer relationships.  Any professional, manager, or executive would benefit from this read, but don’t take my word for it.  Here is what others have said:

“This will be the definitive book on employee engagement for years to come.”

“I know this sounds crazy, but this book has more to do with navigating life than improving employee loyalty, etc. I was surprised at how much I gleaned from this “business” book.”

“If you read one book on Engagement, make it this one!”

“Thoughtful. Brilliant. A genie in a bottle!”

“It will give you insight into the language and concerns of the decision-makers.”

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CEO’s continue to rate execution excellence as their top challenge. But what does “excellence in execution” actually mean? The CEO wants to turn the wheel and have the ship respond, but according to extensive research repeated year after year, only 10-15% of wheel turns get the ship moving in the intended direction. This means most ships are positioned poorly to weather a storm, and are also very likely to miss the trade winds of opportunity.

This disconnect between the captain, crew and ship is what I call the execution gap. Nobody argues there isn’t an execution gap in most companies. No one argues the execution gap isn’t costly – after all 85% of financial performance comes from execution. The big question is why? Why is there an execution gap? The basics of good business execution are thoroughly researched and described:

• Business alignment and
• People performance.

Excellence in execution requires an organization aligned around simple and clear business values. But the best practices on business alignment and people performance fly in the face of many of our deeply held but unexamined assumptions about leadership, teams and motivation.

There is a whole body of research around these deeply held but unexamined assumptions – social proof, fixed mindset, the liking effect, our oversimplified models of human behavior to name a few. Each of us has our own unique set of these assumptions, and companies are challenged to get complicated messages across such a diverse backdrop.

Excellence in execution is infrastructure, because processes and tools can incorporate and model best practices in execution to a degree and with a speed and flexibility not previously achievable for most organizations. And the results are clear. Companies that use processes and tools that incorporate execution best practices outperform their competitors.

Business execution software platforms like SuccessFactors propagate the company strategy to help the crew prioritize the one thing they need to do today from the 10,000 demands on their time. Crews who understand the priorities can apply their own wisdom and judgment – an execution best practice that increases company performance and individual motivation.

Together with social media software platforms like Spigit for internal innovation and Jive, SocialText, PBWorks, and Yammer for internal collaboration, these execution platforms create huge opportunities for companies to get their execution culture right and get it implemented. Internal collaboration and innovation tools create a dialogue within the company, allowing all crew members to inform the strategy and improve processes. Social networking communities, blogs, forums and Twitter let companies extend their culture and values beyond the organization and engage with their customers at a whole new level.

CEO’s no longer have to shout over the wind while crew members rush around trying to find and do their jobs, making their best guess as to what direction to set the sail. CEO’s can now steer an interconnected ship. The crew is connected to the CEO and to each other. The crew also has connections to the outside world that they can bring into discussions of the ship’s performance.

The execution gap is real, and is costing you money. The problem is not strategy, or analysis. “People know what to do but don’t do it”. Create a backbone for excellence in execution with tools and processes that model your values and incorporate best practices and you’ll fly across the seven seas.

I read the result from this survey from our friends at McKinsey & Co. where they found that there’s been a shift in how individual leaders lead during the past year. Respondents say that during the crisis, they have seen far more leaders focus on monitoring individual performance. This is a trail you have to walk carefully though. Leaders going micro managing and monitoring progress on activity are up for some problems.

As the respondents in this survey also notices it’s really about inspiring others and defining expectations and rewards. We talk about this as a manager’s duty to monitor and measure performance but really manage potential. Helping individuals on the right track to get all their inherit talent to propel the business forward. The more you use your talent potential the more output and the more it grows. No one really signed up for doing only part of what they can anyway. Anyway hopefully we got some good coming out of this current storm are the same ones they say will help their companies thrive in the future. The right people want to get it done so help them with that or get out of their way. If they don’t then yes you change that or you get them out of their way.

Note to managers: Employees need a lot more feedback about their performance. According to a new study by Leadership IQ, 51% of employees don’t know whether their performance is where it should be. That’s pretty shocking, so I’ll say it again: We asked 3,611 workers across 291 companies to respond to a series of survey questions, including the question “I know whether my job performance is where it should be.” The results? 51% Disagreed while only 21% Agreed (27% were in the middle).
How is it possible that half of employees don’t know whether their performance is where it should be? Well, the other questions in our study provide some clues.

We asked employees about the amount of interaction they have with their boss, and a whopping 66% of employees said that they have too little interaction with their boss. Only 18% said they have just the right amount and even fewer (16%) said they have too much interaction with their boss.

Alright, so you might be tempted to think that you should walk the hallways giving your employees pats on the back to make them feel better. But not so fast. This study revealed that employees don’t just want warm-and-fuzzy interactions. While 67% of employees say they get too little positive feedback, 51% also say they get too little constructive criticism from their boss. That’s right: Employees are desperate for information about their performance—good, bad or otherwise.

Employees want to know how to improve and grow; they want to perform their best. Ultimately, employees know that the economic stakes are high, competition is intensifying, and that jobs (and even companies) are at risk. Smart employees know that as their performance improves, so too does their future (including bonuses, job security, choice assignments, and more). And thus they want lots of information about how to optimize their performance.

While we’ve been talking about the Quantity of feedback that employees get, this study also revealed just how poor the Quality of feedback can be. Employees not only said that they’re not getting enough feedback, they also said that the feedback they do get isn’t terribly effective. In our study, 53% of employees said that when their boss does praise excellent performance, the feedback does not provide enough useful information to help them repeat it. And 65% of employees say that when their boss criticizes poor performance, they don’t provide enough useful information to help employees correct the issue.

As we outline in our upcoming book “Hundred Percenters: Challenge Your Employees to Give It Their All and They’ll Give You Even More,” employees need information about their performance that is Timely, Specific and Candid (i.e. they need a little TSC). This means employees need real-time feedback that catches issues before they balloon and opportunities before they get missed. They need feedback that tells them exactly what to do more and less of, and they need that information truthfully.

Too many leaders delay feedback because they’re trying to figure out how to spin it, sugarcoat it, or bury it. For example, may managers try to squeeze a negative performance critique or correction between layers of positive reinforcement. In our upcoming book, we call this the Compliment Sandwich, and it doesn’t work. It’s like trying to tell your kid to get off drugs while praising him or her for mowing the lawn last Saturday. It’s a crazy mixed message that gets zero results.

A professional athlete can get dozens of bits of feedback during a practice or game. A student gets constant feedback throughout the day. But it’s not uncommon for a typical employee to go months without any meaningful feedback about their performance. We say we need our employees to perform at higher levels than ever before to help turn the economy around, but how are they supposed to perform when they’re not getting nearly enough feedback about what they’re doing right (which needs to be repeated) and wrong (which needs to be eliminated)?

One final note: Not only do employees need lots of great feedback to improve their performance, they also need it to stay engaged in their jobs. According to our study, employees who said they didn’t get enough feedback were 43% less likely to recommend their company to others as a great organization to work for.

As a business leader your job right now is to make sure that as the economy recovers (though we hear and see different outlooks on how fast and how soon), you are making the most out of it. Sit on your butt and take for granted that you’ll just grab a good, and maybe disproportionate, share of the increased demand, and you’re in for a big surprise. In a recession the strong survive and come out stronger. Customers are even more demanding and competition is stiffer. Especially from those looking to grow at your expense.

Whatever your plan for incremental business accelerating your growth with the recovering economy, there’s one thing you really need to make sure happens within the organization. In lieu of the weather and the economy, you really can do something about how you execute on your strategy. Your job is to make sure that you drive commitment and targeted action to what matters most: the execution of your strategy in this recovering economy.

We invite you to share your stories and ideas for maximizing your recovery in this economy here on the business execution blog