CEOs are six times more likely than employees to believe they work in a company where people are inspired. Instead, employees see themselves as coerced (84%) or motivated (12%) by “carrots and sticks,” rather than a commitment to mission and purpose (4%). Are CEOs just deceiving themselves… or employees deceiving their CEOs?
How important is a values base for a company? For all of us, it can collectively mean the difference between salubrious and a toxic environment. For the company and its shareowners it can mean outperformance according to The HOW Report, a study of more than 5,000 full-time employees, commissioned by LRN and independently conducted by the Boston Research Group, in collaboration with Research Data Technology and The Center for Effective Organizations at the University of Southern California.
Key findings include the following:
- Self-Governance is rare in corporate America. And those most responsible for implementing culture specific initiatives—C-suite executives and human resource professionals — are much more likely to observe that their organizations are self-governing than the overwhelming majority of their co-workers.
- There are tangible elements of culture that can be measured and acted upon to create a distinct competitive advantage in the 21st Century marketplace.
- Organizations that exhibit self-governing behavior experience significantly fewer risks associated with employee misconduct.
- Organizations that exhibit self-governing behavior are significantly more likely to see higher levels of innovation, employee loyalty and greater customer satisfaction.
- When viewed systemically, the four primary outcomes of a self-governing organization — less employee misconduct and greater innovation, employee loyalty and customer satisfaction — work synergistically to deliver superior financial performance.
- Employees in self-governing organizations are three times more likely to report that there is no retaliation in their organizations than are employees in companies that rely on rules and policing, top-down, command-and-control leadership and coercion, and 1.5 times more likely than employees in companies that rely on hierarchy, structure, control processes, performance-based rewards, and punishments to motivate people.
- In self governing organizations, 94% agree that employees report unethical behavior when they see it, compared to 62% in what the study characterizes as “informed acquiescence” companies and 26% in “blind obedience” companies.
- Organizations that exhibit self-governing behavior are significantly more likely to achieve higher levels of innovation, employee loyalty, and greater customer satisfaction, particularly when compared to rules-based, coercive organizations.
- Employees who work at self-governing organizations are as much as five times more likely to observe that good ideas will get adopted.
- Values-based behaviors result in almost nine times the level of observed customer satisfaction.
The best companies are mission-based and take advantage of the brains of all employees, shareowners and other stakeholders. Why do so many CEOs see their employees as mission driven when so many CEOs themselves seem driven by the need for higher and higher pay and more and more power? Maybe if more CEOs were actually driven by their company’s mission, employees would be as well. I’m sure LRN can help with that, for those interested. Other sources of similar advice include Trust Enablement and SafeguardReputation at the Business Integrity Alliance.