Building the Strength-Based Organization

February, 2003

THE GALLUP organization

2001 The Gallup organization

Customer Engagement Items:

I can't imagine a world without X company. X company provides the perfect service for people like me.
X company always treats me with respect. I feel proud to be a customer of X company. If a problem arises, I can always count on X company to reach a fair and satisfactory resolution. X company always treats me fairly. X company always delivers on what they promise. X company provides a service I can always trust.

THE GALLUP organization

2001 The Gallup organization

Airline customer engagement

(Before Sept. 11)
70% 60% 50% 40% 30% 20% 10% 0%
Southwest Delta US Airways American Northwest United
2001 The Gallup organization

-21%

-69%

-98%

-79%

-65%

-95%

Actively disengaged Not engaged Engaged Fully engaged

THE GALLUP organization

Mass retail customer engagement

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Amazon Best Buy Target Wal-Mart Circuit City
2001 The Gallup organization

+122%

-37%

-13%

+4%

-55%

Actively disengaged Not engaged Engaged Fully engaged

THE GALLUP organization

Customer Engagement Hierarchy

Cant imagine a world without Perfect company for people like me Treats me with respect Feel proud to be a customer Fair resolution of any problems Always treats me fairly Always delivers on promise Name I can always trust

Passion Pride Integrity

People

Process
Confidence

THE GALLUP organization

2001 The Gallup organization

The Q12 Items

I know what is expected of me at work. I have the materials and equipment I need to do my work right. At work, I have the opportunity to do what I do best every day. In the last seven days, I have received recognition or praise for doing good work. My supervisor, or someone at work, seems to care about me as a person. There is someone at work who encourages my development. At work, my opinions seem to count. The mission/purpose of my company makes me feel my job is important. My associates (fellow employees) are committed to doing quality work. I have a best friend at work. In the last six months, someone at work has talked to me about my progress. This last year, I have had opportunities at work to learn and grow.

TM

THE GALLUP organization

2001 The Gallup organization

TM 12 Q

Meta-Analysis: 2000

36 companies from 21 industries 7939 business units 198,514 employees 5 business outcomes

Turnover/retention Customer Safety Productivity Profitability

THE GALLUP organization

2001 The Gallup organization

TM 12 Q

Meta-Analysis: 2000

Business Units in the Top Quartile (compared to Bottom Quartile) according to their Grand Mean score are:

50% more likely to be above the median in Retention 56% more likely to be above the median in Customer Loyalty 50% more likely to be above the median in Safety outcomes 38% more likely to be above the median Productivity 27% more likely to be above the median Profitability

70% more likely to be above the median in Total Performance

THE GALLUP organization
2001 The Gallup organization

1997-2001

We have posed the items to 3 million employees in 350 companies.

We have also posed the items to nationally representative samples of the working population in the U.S., UK, Germany and Japan.
TM 12 Q

TM 12 Q

THE GALLUP organization

2001 The Gallup organization

TM 12 Q

Finding #1:

Over 70% of U.S. employees are not engaged at work.

THE GALLUP organization

2001 The Gallup organization

A comparison of employee engagement across countries.

(Source: Random samples of the working populations over 18 yrs of age.)

100%

17 29
80%

16

Engaged

60%

63
40%

72 69

Not Engaged

55

20%

16
0%
US

20
UK

15
Germany

19
Japan

Actively Disengaged
2001 The Gallup organization

THE GALLUP organization

TM 12 Q

Finding #2:

All organizations cultures are surprisingly inconsistent.

THE GALLUP organization

2001 The Gallup organization

A Comparison of All Workgroups within one company: 2000 - 2001

5 4.8 4.6 4.4 4.2 4 3.8 3.6 3.4 3.2 3 2.8 2.6 2.6 2.8 3

2001 Workgroup GrandMean

Advance

Decline

3.2

3.4

3.6

3.8

4.2

4.4

4.6

4.8

2000 Workgroup GrandMean

THE GALLUP organization

2001 The Gallup organization

TM 12 Q

Finding #3:

The longer employees stay with an organization the less engaged they become.

THE GALLUP organization

2001 The Gallup organization

The longer employees stay the less engaged they become.

(Source: Gallup dB, 700,000 employees from the last two years.)
100%

27
80%

22

20

Engaged

38

60%

55
40%

56

57

Not Engaged

50

20%

12
0%
Less than 6 mos

18
6 mos3 yrs

22
3 yrs10 yrs

23
More than 10 yrs

Actively Disengaged

THE GALLUP organization

2001 The Gallup organization

What is the best way to increase one persons performance?

THE GALLUP organization

2001 The Gallup organization

This is how the worlds best managers answer:

Focus on each employees strengths,

manage around his/her weaknesses

THE GALLUP organization

2001 The Gallup organization

Most organizations are built around exactly the opposite answer:

Maintain each employees strengths, work on fixing his/her weaknesses.

THE GALLUP organization

2001 The Gallup organization

To test how widespread this answer is, Gallup asked this question around the world: Which do you think will help you improve the most? Knowing your Strengths or Knowing your weaknesses?
Percent knowing your Strengths
100% 80% 60% 41% 40% 20% 0% 38% 38% 29% 24% 24%

U.S.

UK

Canada

France

Japan

China

THE GALLUP organization

2001 The Gallup organization

In most organizations the Weakness-Prevention method looks like this:

Develop the performance by rating the person

Define the required competencies Rate the person on these competencies Identify which competencies the person lacks Encourage/train the person to improve in these areas Rate the person next year Select/Promote people who do better on the required competencies THE GALLUP organization
2001 The Gallup organization

The Weakness-Prevention method is founded on three assumptions:

The best in a role all display the same behaviors.

All these behaviors can be learned.

All these behaviors should be learned, because weaknessfixing leads to success.

THE GALLUP organization

2001 The Gallup organization

The Weakness -Prevention method The assumptions of is founded on three assumptions: the worlds best managers
The best in a role all create the same outcomes, using different The best in a role all display the same behaviors. behaviors. Some behaviors can be learned. Many prove very hard to learn. All behaviors can be learned. (Talent vs. Skills & Knowledge)

Weakness-fixing prevents failure. Strengths-building leads to All these behaviors should be learned, because weaknesssuccess. fixing leads to success.

THE GALLUP organization

2001 The Gallup organization

The Strengths-based organization will look like this:

Develop the performance by rating the person

Rate the performance, develop the person

Define the required competencies Rate the person on these competencies Identify which competencies the person lacks Encourage/train the person to improve in these areas Rate the person next year Select/Promote people who do better on the required competencies THE GALLUP organization

Define the required performance outcomes Rate the person on these performance outcomes Identify the persons talents and non-talents Help the person strengthen his talents and manage his weaknesses Rate the outcomes next year Select/Promote people who possess the talents necessary for the role
2001 The Gallup organization

Four Disciplines to build a Strengths-Based Organization

Discipline 1: Discipline 2:

Hold all employees accountable for their local performance metrics.

Teach all employees to identify, deploy and develop their strengths, and the strengths of their DRs.

Discipline 3:

Discipline 4:

Align all performance management systems around identifying, deploying and developing strengths

Design and build each role to create world class performers in the role.

2001 The Gallup Organization

Four Disciplines to build a strengths-based organization

Discipline 1:
Hold all employees accountable for their local performance metrics
Business results

Discipline 2:
Teach all employees how to identify, deploy and develop their strengths.
Instill a common language to distinguish the teachables from the unteachables. Reveal each persons strongest and weakest talents

Discipline 4:
Design and build each role to create world-class performers in the role.
Identify the talents common to the best. Build a ladder that leads from good, to great to world-class. Incent employees to climb these rungs. Capture the best in the role describing what they do differently.

Employee Engagement
Customer engagement

Teach each employee how to strengthen these talents, and the talents of their DRs.

Discipline 3:
Align all performance management systems around strengths
Performance measurement Performance appraisal

Employee development
Succession planning

A 250 bed hospital (n=700)

100%

23
80%

33 71

60%

51
40%

49

20%

26
0%

23 18 6

1999 2001 - Top 10% (out of over 200 hospitals) in 2000 productivity. - Increased their physician sat. scores by 30 percentile points. - #1 in their division in patient satisfaction scores. 2001 The Gallup organization THE GALLUP organization

A comparison of the impact of Strengths and Competencies over a 4 year period.

Strengths:3 hospitals 100 80 Competencies:5 hospitals

Percentile in Q12 dB

60 40 20 0 1998 1999 2000 2001

THE GALLUP organization

2001 The Gallup organization

Building the Strength-Based Organization

February, 2003

THE GALLUP organization

2001 The Gallup organization