Without a doubt, ‘engaged’ employees are more productive, more creative, more loyal, and have a proven positive impact on the bottom line. But according to Michael Houlihan and Bonnie Harvey, no initiative can create them if youre getting the big things wrong.
These days we hear plenty about employee engagement. We know disengaged employees are bad for business. We know an office full of innovative, collaborative employees who feel like “owners” is the key to surviving a brutal marketplace. We may even know the statistics like Human Capital Institute’s revelations that companies with highly engaged employees enjoy profit growth at three times the rate of their competitors, and that increased engagement reduces turnover—one of the largest hidden costs in business—by 87 percent.
So, yes: We know. Why then is it so incredibly tough to move beyond the “buzzword” phase and truly transform enthusiasm fakers, paycheck collectors, and clock watchers into employees who truly feel like they have a stake in your company’s success?
“Frankly, it’s because in many cases employees really don’t have a stake,” says Michael Houlihan, coauthor along with Bonnie Harvey of The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand (Evolve Publishing, 2013, ISBN: 978-0-988-22454-4, $15.95). “Too many companies try to paste ‘engagement’ initiatives on a foundation that’s fundamentally flawed. It won’t work. True engagement is a natural, organic extension of a company’s culture, and people can’t be cajoled, tricked, or bribed into feeling it. There just aren’t any shortcuts.”
Houlihan speaks from experience. He and Harvey are the founders of Barefoot Cellars, the company that transformed the image of American wine from staid and unimaginative to fun, lighthearted, and hip. When they started their company in the laundry room of a rented Sonoma County farmhouse, they knew almost nothing about winemaking, the wine business, or leading a company. The Barefoot Spirit, a New York Times bestseller, tells their California-style rags-to-riches story in a compelling and colorful fashion and reveals just what it takes to succeed as an entrepreneur.
“Michael and I learned early on that our growth and success depended on our employees: how hard they worked, the ideas they had, how committed they were when times got tough, the types of relationships they formed with customers, and so much more,” Harvey comments. “Keeping our employees inspired and happy, and honestly acknowledging how much we appreciated their loyalty and efforts, were some of our top priorities as business owners.”
Here, Houlihan and Harvey share 11 tactics to help business owners create and increase employee engagement in their organizations. (Warning: They may require some major overhauling.)
First, ask yourself: Would I work for me? Before you can make much progress in increasing employee engagement, you need an accurate understanding of what it’s like to work at your company right now. Houlihan recommends asking yourself the following questions and answering honestly—even if it’s uncomfortable:
• Do I treat my employees’ labor as a commodity? Do I try to figure out how little they will work for? Or do I see my people as an asset, rewarding them for performance and acknowledging their achievements?
• Do I acknowledge producers publicly, or am I afraid they will ask for a raise?
• Do I think that giving time off will cause me to increase or lose production?
• Do I see medical and retirement benefits as a cost or as an investment in long-term stability?
“If you’re fooling yourself about what it’s like to work at your company, you won’t make much progress in increasing engagement,” Houlihan points out. “You need to make sure that you aren’t falsely blaming outside factors for low morale, low productivity, low enthusiasm, and high turnover if you’re really to blame. Take your temperature in this area on a regular basis.”
Hire smart. Some job seekers are looking for just that: a job. A way to fill their days and pay their bills. Others are looking for something more: a career. Career seekers don’t just desire a paycheck; they’re looking for purpose, fulfillment, education, and advancement within your company. For that reason, they are much more likely to engage with your company (and stay engaged) as long as you provide them proper incentive.
“A good rule of thumb is to avoid hiring solely based on someone’s technical skill set,” Harvey advises. “You can always teach that. Instead, hire people with foundational qualities you can build on: integrity, enthusiasm, a willingness to learn, a sense of humor, and a sincere interest in your business, to name a few. A good way to test this is to give job candidates a verbal run-down of the position, your company’s challenges, and your expectations for the position. Then, have the candidate send you a one-page summary on a deadline. This will tell you volumes.”
Go overboard with orientation. After bringing new employees on board, don’t stop with job-specific orientation training and a quick tour of the office. Make sure that each person understands how the money gets into their paycheck, who the customer is, and the process by which those customers are provided with goods and services. Show employees how your various divisions of labor provide the specialties necessary to your company and how each person fits into the big picture.
“When everyone clearly understands what’s going on both inside and outside of their own areas of responsibility, they’ll be more invested in the overall organization,” Houlihan explains. “At Barefoot, we spent hours making sure each member of our staff understood the ‘whys’ of what we were asking them to do. This extra time and energy spent in big-picture education paid off handsomely with fewer mistakes, fewer misunderstandings, and more efficiency.”
Share the wealth (as long as people are helping create it, that is). No worker is going to turn down a generous paycheck. And yes, a higher-than-average salary will often prevent employees from jumping ship and going over to the competition. But employees who stay with you solely for the sake of money are merely mercenaries, points out Harvey. To create true engagement, she says, you must tie money, employees’ personal success, and the future of your company inextricably together.
“Most compensation plans are based on an hourly rate, which is paying for attendance, not necessarily production,” points out Harvey. “And production is what you really want, because that’s where profits come from. For that reason, Barefoot offered our employees bonuses for sales, cost reductions, customer retention, and more. If someone helped us grow our profits, he or she got to take home more of them. Sure, we were sometimes chastised for ‘overpaying’ salespeople (some made more money than we, the owners, did!), but when we looked at the efficiencies of scale, the value of stability, and the increase in sales, we knew we were doing the right thing.
“Sharing the wealth allows you to reduce turnover, attract go-getters, and motivate people to produce even more,” she states. “Best of all, increased profit is ‘found money’—it really costs you nothing. With this compensation system, non-producers can’t afford to work for you, and producers can’t afford to leave.”
Give more days off. For obvious reasons, employees feel very positively toward an employer who says, “Hey, you know what? Why don’t you take a day off? You deserve it. And it won’t come out of your vacation or sick days.” Not so obvious, but equally true, is that these unworked hours won’t mean a loss of productivity and revenue.
“At Barefoot, we decided to give employees a Friday off during each month that didn’t already have a built-in three-day weekend,” Houlihan shares. “We found that these ‘Barefoot Days,’ as we called them, didn’t hurt productivity at all. Our folks regularly put in extra hours to finish their work before the weekend. They didn’t want to take their unfinished projects with them, or worse, worry about them while they were on holiday. And when they returned, they were recharged, refreshed, and ready to get back to work.
“Barefoot Days benefitted the company for two additional reasons,” Houlihan continues. “First, the cadence that the new holidays gave to the year also relieved much of the long-haul tension that builds between the official holidays. Now the work periods were never more than six weeks without a break. Attitudes and morale improved accordingly. Secondly, and perhaps most importantly, Barefoot Days created major employee engagement. Our people loved working for a company that told them to take more vacation, and as a result, they tended to be incredibly loyal and hardworking.”
Be a mentoring matchmaker. King Arthur had Merlin. Harry Potter had Professor Dumbledore. And Luke Skywalker had Obi-Wan Kenobi. While your business operates in the real world instead of in the fictional realm, you can still learn a valuable lesson from these famous pairs: Mentoring works. When a new employee comes on board, try to match him up with a more experienced worker (preferably in the same department or division) who can advise, teach, challenge, and encourage him.
“Mentoring relationships boost employee engagement in multiple ways,” explains Harvey. “When rookies are taken under the wings of respected veterans, they learn more quickly, make fewer mistakes, and have tangible evidence that their employer cares about their success on a personal level. And on the other hand, asking experienced employees to guide new hires shows these veterans that you notice and value their expertise.
“Overall, mentoring relationships guarantee that valuable institutional knowledge is passed on while knitting your team more closely together,” she adds. “It’s a win-win!”
Say “thank you.” In a recent Gallup survey, 57 percent of disengaged employees said they felt ignored at work. Well, isn’t that what employees want—to not be micromanaged, and to be left alone to do their jobs in peace without commentary from management? you ask. Not exactly. While nobody wants to hear a constant stream of criticism or anxiously delivered “suggestions” from the boss, workers do want to know that they’re doing well. According toone New York Times commentator, “regular praise…would go a long way toward getting the checked-out to check back in.” And Houlihan agrees.
“When your employees work hard on your company’s behalf, they deserve your thanks and appreciation,” he states. “Don’t take it for granted when your employees put in extra hours, land a coveted client, or turn out an incredibly well-thought-out proposal, for example. Make sure they know that you have noticed their efforts.
“A great way to build team spirit is to send out written acknowledgments or make an announcement when a person does something that positively affects business,” he adds. “At Barefoot, we did this on each employee’s anniversary. Not only does saying ‘thank you’ as publicly as possible give individual employees the warm fuzzies, it causes the whole team to gain more respect for their coworkers.”
Allow them to make mistakes. In many companies, employees avoid making mistakes at all costs. After all, who wants to be called into the boss’s office for a harsh lecture, or even worse, be chastised publicly in the middle of a staff meeting? Yes, responding harshly to employees’ mistakes might cause them to occur less frequently, but only because it stifles the spirit of creativity, innovation, and growth that inspires people to take the risks that can lead to mistakes. (Hint: That’s a bad thing.)
“Employees who are afraid of doing something wrong will never live up to their full potentials or take any unnecessary risks—including the kind that pay off big,” Harvey comments. “They’ll also feel like children who dread displeasing a parent, instead of valued partners in their company’s success. Your employees shouldn’t be afraid to make or report mistakes (unless, of course, they involve bad behavior or an inability to perform, which should not be overlooked).”
She adds: “At Barefoot, our approach to mistakes was to say, ‘Congratulations! You found a new way to screw up, and that’s a good thing. We didn’t know that this could happen, but now that it has, we can keep it from happening again.’ Then we would brainstorm what went wrong and make technical adjustments. ‘Celebrating’ mistakes in this way not only helped us to make real progress and lasting improvements; it also used a potentially divisive situation to bind employees closer to our goals and mission.”
Observe some simple office courtesies. For example, saying, “Have that report to me by the end of the day,” can have a very different effect on your employee than the similar, “Would you please have that report to me by the end of the day?” By using only three extra words, you have transformed an order to a subordinate into a request of a valued colleague—and your employee’s attitude about working for your company is likely to reflect the difference.
“Yes, of course there will be times when you’ll need to assert your authority as your company’s leader,” Houlihan acknowledges. “But by and large, remember that your employees want to be treated as respected professionals instead of taken-for-granted underlings. With a little time and consideration, you can earn your team’s respect and good opinion.
“Specifically, follow these simple courtesies:
• Use your manners. Say please and thank you.
• Keep employees apprised of progress when the ball is in your court. Don’t make them come to you to ask about the status of a project.
• Do what you say you’ll do (e.g., meet the deadlines you set). You may be the boss, but you shouldn’t be above the ‘law.’
• Sometimes your employees will know more about a certain aspect of business than you do. Don’t slow up progress by pretending to know it all—ask for an explanation.
• Respect employees’ personal workspaces. Yes, your name might be on the office’s deed or lease, but it’s still polite to knock instead of barging unannounced into someone’s office, for example!
• Be considerate of employees’ personal needs, but don’t pry into their personal lives.
• Consider other people’s schedules. Whenever possible, ask, ‘Does this meeting time/call/ appointment etc. work for you?’ before putting it on the calendar.”
Tap into your values. According to Gallup, only 41 percent of employees say that they know what their companies stand for. If that’s the case in your organization, you’re missing a golden opportunity to add meaning to your employees’ work. While employees will (and often do) work solely for financial reasons, they’ll feel more motivated and more loyal to your company when they also have a social reason to do their jobs.
“This is a concept that we applied to Barefoot from the start, and to great success,” Harvey recalls. “From our earliest days, we made it clear to our team and to our customers that we wanted to use any growth and success Barefoot Wine might experience to help worthy causes. These centered around local parks, civil rights, and environmentalism, which Michael and I had felt strongly about long before creating our company. Even when we didn’t have cash to spare, we still donated bottles of wine, as well as our time, to events that various nonprofit organizations held in our community.
“Far from being unwilling to participate in these ‘non-work-related’ activities and efforts, our employees pitched in wholeheartedly and looked forward to working with our partner nonprofits,” Harvey continues. “They loved being associated with an organization that was actively working to make their community a better place.”
Have heart. Your attitude and outlook will affect those of your employees. If you come to work each day excited about what your company does, optimistic about its future, and happy to spend time with your team, there’s a good chance your employees will feel the same way. On the flip side, if you’re a grumbling, grouchy, pessimistic Scrooge, your employees probably won’t be able to jump ship soon enough.
“The type of attitude that creates employee engagement—which Bonnie and I call ‘heart’—isn’t something you can fake,” Houlihan warns. “Instead, it’s something you have to find within yourself. Heart is what drives you. It’s the way you look at the world around you. Heart is about your belief in your own eventual success, regardless of the odds, the naysayers, or the time it takes. It’s the tenacity that keeps you going. Heart is having a sense of humor in the face of hardship and not taking yourself too seriously. It is about being true to your core values. In a nutshell, heart is what makes you feel good about what you do—and helps your employees to feel good about what they do, too.”
“So remember, contrary to many popular notions, creating employee engagement is not about taking your people out to lunch or scheduling team-building activities,” Harvey concludes. “It’s about connecting them to your organization’s values, inspiring them to work toward its goals, giving them the tools they need, and treating them as valued team members. And, of course, recognizing them for a job well done.”
About the Authors:
Michael Houlihan and Bonnie Harvey, authors of the New York Times bestseller The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand, started the Barefoot Wine brand in their laundry room in 1986, made it a nationwide bestseller, and successfully sold the brand to E&J Gallo in 2005. Starting with virtually no money and no wine industry experience, they employed innovative ideas to overcome obstacles and create new markets.
They were pioneers in what they termed “worthy cause marketing” and performance-based compensation. They held a comprehensive view of customer service, resulting in the National Hot Brand Award for outstanding sales growth in 2003 and 2004.
They now share their experience and innovative approach to business as consultants, authors, speakers, mentors, and workshop leaders. Their book, The Barefoot Spirit, chronicles the history and lessons learned building the popular Barefoot Wine brand.
About the Book:
The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand (Evolve Publishing, 2013, ISBN: 978-0-988-22454-4, $15.95) is a New York Timesbestselling business book and is available at bookstores nationwide and from major online booksellers.