Jim Smith, CEO, Enterprise Management Group (EMG)

Jim SmithJim Smith began his career managing large IT organizations for twenty years and eventually began consulting for CEOs advising on IT organizational issues and fixing multi-million dollar IT projects which were in trouble. As part of that work, Jim implemented his IT priority-setting process that put the CEO at the head of all IT priority setting. He later began providing CEOs with enterprise-wide cost reduction support exclusively through employee engagement. For twenty years Jim and his executives at Enterprise Management Group have been changing the fortunes of companies and their employees by providing a unique process whereby the CEO sponsors the employee’s engagement. Jim has also been an international speaker having given keynote presentations in Europe and the US. In one case, he presented to a combined group of IBM executives from Asia, Africa, and Europe at their education center in Lahulp, Belgium. On another occasion, IBM hosted Jim to present to their Nordic executive customers at a retreat in Nice, France.

What does employee engagement mean to you? 

We view employee engagement as a result, not necessarily a target. Many in the EE business are trying to change the level of employee engagement, viewing it as though it’s a static condition. When management does something that surprises and at the same time impresses employees, they react in equally surprising ways. We view employee engagement as a state, where something has occurred causing employees to engage so that they make the difference in the companies’ performance and they are given all the credit.

How to measure employee engagement?

We are not concerned with measuring employee engagement. Whatever it is, that’s where we begin. Measuring EE cost money and there are no universally accepted methods for measuring EE. It doesn’t make sense, what you get is a measurement, which cannot be validated, a delay in implementing change, and an invoice. No one would say his or her employee engagement level is where he or she would like it to be so improving it is always good, notwithstanding the lack of measurement. Many believe you need to measure EE, so there’s a baseline from which to measure change. That’s true if you’re only concerned with measuring the EE delta, we prefer to measure the impact on the business of employees becoming engaged, which is the reason EE came into vogue, to improve business.

What are the common causes of employee disengagement?

To answer the question of common causes, you have to address it from a high level, because every leader is different, every company is different, and every country is different. We’ve categorized our twenty-year database, and this is what we’ve arrived at: The three primary causes of disengagement are politics, culture, and silos, which are universal to all companies

There are good and bad aspects to each.  What we found over the years is that employee’s perceptions are just as impactful on engagement as the facts.  If they believe no good will come of their opinions, they won’t bother. If they see a problem in another department, silo, they will probably pass on the opportunity to offer their view; it’s not their department. Given the total lack of companies or vendors citing examples of an EE transformation occurring, it’s likely most employees have witnessed a lack of results from prior EE surveys, which then promotes further disengagement.

If you look at it from the employee’s perspective; it takes weeks to complete the survey, then the delay while the vendor does the analysis, then the EE committee pours over the results trying to figure out what they can push through the politics, culture, and silos. Then weeks to complete the approval process and planning for implementation of those approved. By this time employees have mostly forgotten the survey, and given all the filtering that has occurred the results aren’t even noticeable. The natural result is further disengagement.

What are the drivers of employee engagement in today’s fast-moving world?

The key word in this question is “fast-moving”. Reviewing the previous paragraph about the delays that cause disengagement, there’s nothing fast moving about the way employee engagement is dealt with today. That is why we work directly for the CEO. When an employee response to the CEO’s single question survey arrives, if it is accepted, usually within two to three days, the CEO adds that item to the weekly progress report and the owner has to start the change immediately. By the time the ten-week initiative completes, nearly 90% of the accepted employee suggestions are either complete or underway. The importance of the CEO’s involvement cannot be overstated. The changes are far more transformational when the politics, culture, and silos are eliminated. Moreover, when employee’s see their suggestions implemented nearly every day, they dig deeper. In one case the client reduced their expenses by $300 million, their capital plan by $200 million, inventory by $45 million, sent a few corporate bullies home, and killed or altered hundreds of policies; one hundred percent from employees responding to the CEO asking one simple question. Thus the reason we recommend every provider work only for the CEO. As you can see from this example, the ruler used to measure employee engagement was the results and not some arbitrary EE measurement.

What makes a really effective employee engagement programme? Any best practices to share.

The biggest issue is, of course, sponsorship from the CEO. The financial results have never been less than 10% of the client’s expenses, thus no need to budget for this approach. In just a few weeks the savings the employees deliver are always greater than the cost of the programme.

Also critical as mentioned above is the need to for speed. When employees see results occurring in days rather than months or not at all, they become more involved.  In one case three weeks into the ten-week initiative, we had 800 employee suggestions, the CEO announced he was canceling an executive perk the employees’ hated. Seven days later there were 4700 suggestions.

If a CEO wants to impact earnings while at the same time improving employee engagement, he or she cannot expect human resources to accomplish those goals while under the shadow of the politics, culture, and silos.

Introduction to Enterprise Management Group (EMG). I suspect as you go through this you will find that EMG does not approach employee engagement in the same way as the rest of the market. We focus on making the changes happen. Since we report to the CEO to do otherwise would be the waste of a great opportunity. HR doesn’t need to support the initiative. Also unique to EMG is that our fees are based on the actual results, which impact the income statement. If you have any questions don’t hesitate to reach out.

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