Some info from Dr. Timothy J Sharp (a.k.a. Dr. Happy), http://www.drhappy.com.au, who looks at research into happiness in the workplace.
TIM’S QUICK SUMMARY
In brief, high performing groups within the most successful organisations (1) feel valued, (2) are supported and allowed to think critically and (3) are provided with the resources and given the opportunity to seize opportunities. High performing groups also engage in more “human dialogue” (which simply means they collaborate more and communicate more effectively) and are headed by leaders who know their strengths and utilise the strengths of others.
Combining the experience and expertise available at Sharp & Co. and The Happiness Institute, we specialise in applying the powerful principles of Positive Psychology as well as Cognitive Behavioural Coaching. This includes the key principles described in this fascinating research such as helping individuals identify and utilise core strengths, communicate more effectively and appropriately, and think more optimistically. As a result, we’ve succeeded in helping organisations develop key individuals and build happy and high performing teams.
For the full report, see below:
Susan Lucia Annunzio has always believed (quite strongly, in fact) that there is a significant correlation between how a company treats its employees and its ability to sustain profitable growth. But, until recently, all she had to support her hypothesis was anecdotal evidence.
Annunzio and her team at the Hudson Highland Center for High Performance in Chicago partnered with an independent research firm to find out if they could scientifically prove that there were certain environmental conditions within work groups that drove lasting, profitable growth. The often-surprising results of the study form the basis of Annunzio’s new book, Contagious Success: Spreading High Performance throughout Your Organization.
In addition to advising top business leaders worldwide in her role as chairman and CEO of the Hudson Highland Center, Annunzio is an adjunct professor at the University of Chicago Graduate School of Business and is frequently quoted in the business press. We spoke with her recently about her study of high-performing teams and the lessons it holds for leaders who desire to unleash the hidden potential of their organizations.
Leadership Wired: Briefly describe the nuts and bolts of the study.
Susan Lucia Annunzio: We studied knowledge workersâ€”people hired to use information to drive business results. The reason we studied knowledge workers was because, in order for companies to differentiate, they have to drive innovation today. And the most likely suspects for innovation drivers are your knowledge workers because they do it themselves or they’re managing the people who do it. The knowledge workers are critical to success in today’s economy. Where do you find knowledge workers? They’d never been studied systematically or rigorously. So basically we used the Internet. We culled 5.5 million Internet subscribers to identify over 3,000 qualified knowledge workers worldwide, which is the largest number of knowledge workers ever studied at one time systematically. We were extraordinarily lucky. Our sample represented the top 10 income bracket in every country that we studied. Everyone had the equivalent of a U.S. university education, plus 40 percent had master’s degree and doctorates. Thirty percent of the Global 500 were represented, including Pfizer, Intel, J.P. Morgan, Sonyâ€”you name the big company; they were in our study. In effect, we studied the highest-paid, best-educated people from the top companies in the world.
LW: And what did you ask them?
Annunzio: The first thing we asked them was, “Are you part of a high-performing work group?” Seventy-seven percent said, “Yes, we’re part of a high-performing work group.” And then we said, “Prove it. Give us some objective evidence. From the years 2000 to 2004, did your group consistently make money and drive innovation?” Against those criteria, only 10 percent could support the claim that they were high-performing. And what we did was we looked at the biggest differences between the high-performing groups that made money and drove innovation for four years in a row vs. those groups that had no evidence whatsoever., i.e. non-performing groups.
LW: What were some of those differences?
Annunzio: We had 45 items and we did a cluster analysis around the 11 items that most differentiated between high and low performance. They fell into three buckets. The first bucket was thatpeople in high-performing groups felt valued. That was the highest differentiator of high performance around the world. We asked people, “What does that mean that you feel valued? Does it mean you get plaques and pats on the back?” No, it meant that smart people got treated like they were smart. They were told what to do, not how to do it. Their input counted. Differences of opinions were celebrated. People were put in environments where they were able to think and use their brains. High performing groups and non-performing groups worked hard and had high expectations. Hard work and high expectations only paid off, if you will, when people felt valued.
The second one was what we call optimizing critical thinking. Environments that drove high performance were able to get people to do their best thinking. In today’s world there’s a plethora of information out there. You want people in today’s world who can sort through the information, figure out what’s important and what’s not and how can you use it to drive business results. Critical thinking. We found environments that could do that were congruentâ€”actions and words matched. Leaders led by example. People had the information they needed to do their jobs. The espoused values of the company were lived. People said things to us like, “In our group, we use the values to make business decisions. When we’re not sure which way to go, the values are our key driver.” Of course, pay for performance makes environments congruent. However, high-performing groups and non-performing groups paid for performance. Pay for performance paid off when actions and words matched.
The third one wasseizing opportunities. This particular bucket had the most items in the survey that differentiated between high performance. We’ve been able to codify our results on a web-enabled survey and we’ve been able to benchmark companies against our findings, and we have found that low scores in this area are real indicators when companies are stuck or they can’t execute their strategy. Or the reverseâ€”when some groups and companies are doing really, really well, these scores seem to really matter. What we found was that strategic planning is happening around the world. High-performing groups and non-performing groups had plans, they stuck to their plans and they measured their plans against goals. What differentiated them was, strategic planning was useful when people were put in learning environments where they could actually try new things, they could experiment, they saw failure as part of the process, and they took calculated risks. In these situations, groups were much more able to not only anticipate change, but they were able to adapt quickly to change. In non-performing groups, we found that they could sometimes anticipate change in the economic environment, but because this learning environment wasn’t rewarded or encouraged, they weren’t able to adapt quickly to change. Consequently, they weren’t able to drive innovation and make money for their company.
LW: On the flip side of all that, what did you find is the No. 1 inhibitor of high performance? How can it be overcome?
Annunzio: The flip side of anything is usually the other side of the mirror. What we found wasthe No. 1 killer of high performance around the world was short-term focus. We asked those people in the non-performing groups, “During the years 2000-2004, you couldn’t consistently drive results, but was there ever a time you did? Was there ever a time when your group made money and drove innovation for your company?” Thirty percent of those in the survey said, “Yes, we used to be.” We asked them what happened. Short-term focus. We had story after story where people said the following: “Our group was high performing and then they cut our budget, cut our resources, cut our staff and raised our target, and we couldn’t keep it up.”
There’s a popular saying in business today that you can get more with less. Our study begs the question that all you get with less is less. Long term. If you’re interested in the short-termâ€”if you want to sell your company and you want to get the profits up so that you look more attractive for acquisition, that’s one thing. But if you’re really trying to have a long-term strategy, destroying this environment where people could think doesn’t work because the second killer of high performance was micromanagement, and that’s telling people what to do and how to do it.
We have a difficult economic environment to compete in today. Companies are forced to think quarter to quarter. What’s not happening is enough engagement of the smart people that companies are hiring to figure out the best way to increase shareholder value. Because making the quarterly number might not be it. Of the 3,000 people we surveyed on the Internet, we talked to 600 by phone. We had people in real angst over the fact that they knew they were doing things to make a quarterly number that could get them the bonus that they were supposed to get, but they felt were actually hurting the company and didn’t feel that anybody wanted to hear that.
LW: What’s the way to overcome that?
Annunzio: I think it’smore human dialogue. Most companies today, at least 60 percent of their operating budget is on the cost of human capital. We have to really take a hard look at are we getting a return on that cost of human capital if we aren’t putting employees in environments where they can think. Managers tend to go to employees and say things like, “We’ve got to make this number and we’re going to do it by cutting this, this and that.” Instead of, “We’ve got to make this number, how are we going to do it? What do you suggest? What are the alternatives?” That way when an employee says, “We can’t make that number because if we make that number, this is going to happen,” we have to say, “Well, what do you suggest? How should we manage it?” And get employees to think more.
What we found in high-performing groups was that there was what we calledrespectful communication. There were a lot of questions and not a lot of answers. Someone in a high-performing group might say something like, “You know that idea you just came up withâ€”was that weird? I mean, you are off the wall. But you’re really smart, and if you think that would work, could you help me understand why?” Where in a non-performing group, we saw the kind of communication where someone would go, “That’s really a dumb idea and it’s never going to work because …” Although we know many of the things I’m telling you other books have said, the difference is that we have shown in our study that the prevalence of these attributesâ€”treating smart people like they were smart, having actions and words match and creating learning environments, correlated to driving innovation and making money during the most difficult economic time that we’ve had in recent history. So they’re not nice-to-have things; they’re must-haves.
LW: What is the leader’s role in driving high performance?
Annunzio: The leader’s role is to enable that environment. We could not find (contrary to conventional wisdom) a singular definition of leader. We couldn’t say that these were the leadership competencies of the 21st century. We wanted to. But what we found instead was that people in high-performing groups had different leaders with different kinds of personalities and different styles, but what they shared in common was an understanding of the environment that drove results. However, they have
different ways of enabling it.
What we found isleaders in high performing groups seem to be very aware of what their strengths were – what they brought to the table and what they didn’t. They seemed to have a strong intellectual understanding of who they were, and they built groups that complemented their weaknesses. I use the analogy in the book that high-performance groups play like team sports – they pass the ball. They don’t expect everybody to be good at everything. The leader pretty much accepts their imperfections. Now, I’m not saying that leaders shouldn’t develop and that there aren’t leadership competencies that make people better leaders. What I am saying is you can have all the competencies in the world, but you better be sure that you’re not just measuring the leadership style, but does that leadership style create an environment that drives high performance, i.e. environments that make money and drive innovation over time? If it doesn’t, all you’re doing is creating a higher-functioning human being.
LW: Your study found that the easiest, most efficient way to increase the overall performance of a company is to increase the performance of those groups already at the top. How can this be done?
Annunzio: That’s a great question – I’m glad you asked it. First of all, companies get this when it comes to customers. Most good companies are saying, “Who are our best customers and how can we increase the wallet share of our best customers? Why go after the ones that we’re not getting much from?” I’m saying the same things. Who are your best groups? In our study, the average mean score of high performing groups around the world was a seven. That means there’s room to grow. That means that
there’s something getting in the way of them being a 10. So if, at a seven, they’re making money and driving innovation, what would happen if they were an eight or a nine? Because the best groups in our study – the highest of the high performing – had average scores of nine or 10.
LW: How do you get the groups to have a nine or 10?
Annunzio: Well, one of the findings in our study was that the leader of the group protected the group so the group could do their work. Positively, high-performing groups tended to have a better relationship with the company than non-performing groups – they got the resources they needed. So the protecting is positive in that they fight for the budget, fight for the resources, talk to the right people at the right times, get the right training. However, in qualitative interviews, when we talked to people on the phone, we found that this protection was also combating unintentional interferenceâ€”that the company sometimes created interference for the high- performing groups, though policies and procedures, that made it more difficult for them to do their job. So a lot of the leader’s time was being spent actually trying to go around the company instead of work with the company.
A great deal of my time is spent in some room with a group of senior leaders who are running some big organization. And I haven’t met the senior leadership team who is ever sitting in a meeting talking about how we can create a policy or procedure that is going
to create interference for our best groups. And yet we found this in our study. So it’s unintentional. It’s not happening on purpose. So imagine if the senior leaders of a company tried to find their best-performing groups, and took representatives from those groups and put them in a room. And they said, “Is there anything the company is doing that is getting in the way of you doing your best work, prohibiting your ability to get results? Is there anything you need from the company that could help you do better?” What if you just had that conversation? What if you offered amnesty so that nobody would get fired? Now of course, some of the people aren’t going to believe you, but a third of the people might believe you.
A company that we were dealing with had been No. 1 in the S&P in its industry. When we met them, they were sixth and falling. We identified their high-performing groups by not only looking at financial results but also whether they had the environment that drove high performance, and we got 100 people from around the world in a room. The CEO started the meeting by saying that they were No. 1 and they were falling, and this wasn’t the time to not say what you were really thinking. They wanted to know what the company was doing to get in their way, and what could they do to make it better. They had a four-hour conversation – no holds barred – where people really let it all out. We then had a day where we put them in breakout sessions and we basically asked the people in attendance who identified the problems what the company should do about them. The smart people that they hired identified the problems and identified the fixes.
As a result of that meeting, they eliminated 456 lines of unnecessary paperwork. They had 90 global initiatives that they were working on when the meeting started, and they reduced it down to 30. They developed three global contacts that they hadn’t thought of
prior to the meeting and, three months later, brought $20 million of new revenue to the bottom line. Just because they asked the smart people they were already paying what was broken and how to fix it. My personal tenet is that I haven’t met the company whose own people don’t know how to fix it. They’re just afraid to tell because they might be fired. There’s something wrong with that. As a consultant, I believe my role is to help a company find its own best internal resources and facilitate conversation so that they can work together to get where they want to go.
LW: Looking back, is there anything that really impresses you about the results of your study?
Annunzio: I’ve been in business a long time – I’ve been a consultant for 20 years – and the Holy Grail of business hasn’t changed. As much as the world has changed, “sustainable, profitable growth” has always been the Holy Grail. And I have always believed that how you treat your people is the most important part of achieving that Holy Grail. What I’m most proud of is that our study quantifiably proved that how you treat your people is imperative if you want to make money that lasts. It’s not a
nice-to-have. It’s not touchy-feely girl stuff. We have correlated making money and driving innovation with smart people being treated like they’re smart. You can ignore that finding; you can say how you treat your people doesn’t matter, but when that happened in our study, making money and innovation went away.
— Interview by Lois Flowers, Maximum Impact consulting editor
To find out more, or to organise a meeting to chat about our coaching programs, please feel free to contact me via email or using one of the numbers listed below.
Dr. Timothy J Sharp
(a.k.a. Dr. Happy)