An executive at a Fortune 1,000 company recently kicked off a summit for several hundred of the company’s content strategists, project managers and digital marketers with a story about an experience he had only days before at his neighborhood Starbucks. The executive was enough of a regular at the store that he knew the store manager’s name and swapped pleasantries with him on most visits.
On this particular day, the store manager greeted the executive warmly and asked if he wanted his usual order. He then inquired about the executive’s teenage daughter and how her college search was going. The executive, a Midwesterner, shared that he had recently traveled to California with his daughter to look at schools. When it was time to pay, the store manager said that morning’s coffee was on him.
The executive thanked the store manager, and then asked if he could get a selfie with him. He explained that he was going to speak at a large gathering of his company’s employees and he wanted to share this story of a person who was thoroughly engaged in his work and how that impacted the customer experience.
Days later, as the executive wrapped up his kickoff address, several hundred content strategists, project managers and digital marketers were shown the selfie with the Starbucks manager on the conference hall’s large projection screen.
Managers at every level across all industries crave engagement like that of the Starbucks manager. They understand its positive effects on productivity, innovation, attendance and retention. They get it, but they don’t always know how to get it.
In August, Gallup reported the percentage of “engaged” workers in the U.S. — those who are involved in, enthusiastic about and committed to their work and workplace — is 34 percent. That ties the highest level since Gallup began reporting the national figure in 2000. (The percentage of engaged workers was also 34 percent in March 2016.)
There was more so-called good news from the Gallup survey. The percentage of workers who are “actively disengaged” — workers who are unhappy and unproductive at work and liable to spread negativity to coworkers — is at its lowest level (13 percent), making the current ratio of engaged to actively disengaged employees 2.6-to-1 — the highest ever in Gallup tracking. The findings are based on a random sample of 30,628 full- and part-time U.S. employees working for an employer from January to June 2018.
“The remaining 53 percent of workers are in the ‘not engaged’ category. They may be generally satisfied but are not cognitively and emotionally connected to their work and workplace,” the Gallup report states. “They will usually show up to work and do the minimum required but will quickly leave their company for a slightly better offer.”
And these numbers were up from past Gallup surveys. Over nearly two decades, the annual percentage of engaged U.S. workers has ranged from a low of 26 percent in 2000 and 2005 to the recent six-month high of 34 percent. On average, 30 percent of employees have been engaged at work during the past 18 years.
The percentage of actively disengaged workers has ranged from a high of 20 percent in 2007 and 2008, immediately before and during the heart of the recent U.S. recession, to the current low of 13 percent. On average, 17 percent of U.S. workers have been actively disengaged over the 18 years of tracking.
Purpose at work
“It’s a sad reflection on how broken our work environments and company structures often are,” says David Heinemeier Hansson, cofounder of the web application company Basecamp and coauthor, along with his Basecamp cofounder Jason Fried, of the book “It Doesn’t Have to Be Crazy at Work.” Heinemeier Hansson says the Gallup numbers pair well with a statistic he took from anthropologist David Graeber’s 2018 book “Bull**** Jobs”: 37 percent of people who responded to one survey said their job did not make a “meaningful contribution” to the world.
Many of the managers, sales coaches and consultants who responded to a query we posted while researching this story said purposeful work is the only way to drive engagement. One of those was Michael Stahl, executive vice president and chief marketing officer at HealthMarkets, an independent agency that sells health insurance, Medicare, life and supplemental insurance products nationwide. Stahl says he joined the Dallas-based company six years ago and built a telesales team of nearly 100 people to complement the company’s independent rep field sales team of more than 3,000.
Stahl says he is careful to couch his team’s performance in terms of the number of customers they help instead of the revenue the company generates. Some may see that as a distinction without a difference, but Stahl isn’t one of those.
“People here believe they have interesting work to do every day, and they believe in the mission of the company,” he says. “If you believe the work you’re doing has a greater purpose, that has a motivating factor and it helps with your happiness in your job.”
If the company stopped there, it may be just talk, Stahl admits. However, HealthMarkets supports its mission of focusing on helping customers find the best insurance products by “tilting” pay for its salespeople toward fixed compensation rather than commission. Also, every sale is compensated the same even though some carriers may provide HealthMarkets a higher commission than others. “I want to make sure our agents are unbiased in providing information to consumers,” Stahl explains.
Another who responded to our query, Jeffery Anderson, chief sales officer at Spring Venture Group, a health and life insurance sales company, comments, “As an organization, it is vital to communicate ‘the why’ behind what you do as a company. People need and want to have a reason to come to work every day and give it their all. As a leader, you must make clear why (individually and as a team) and how the actions of every employee contribute to the success of the overall organization. Your people need to know they are a part of something bigger than themselves — that they have an important role and their contributions are valued.”
A commissionless environment
Heinemeier Hansson and Fried have taken things a giant step further at Basecamp. The company has no full-time salespeople (“We say everyone who works at Basecamp is a salesperson,” says Heinemeier Hansson). It does not pay commissions or bonuses, opting instead to set base salaries within the top 10 percent of pay for San Francisco benchmarks for each position. It has no quarterly or annual goals. In its early stages, the company had no job titles, but they changed that so workers could see a clear path to the next stage of their career.
“I understand there is an ingrained culture around how sales compensation works, but there have been plenty of companies that have decided that having people work on commission leads to certain outcomes that aren’t necessarily best for the company in the long term,” Heinemeier Hansson says.
The classic commission-based pay structure, where a high-performing salesperson’s income is limitless, is not something the Basecamp founders believe in. “That unlimited potential fosters the ‘Boiler Room’ mentality — highly disruptive and cutthroat,” Heinemeier Hansson says, referring to the 2000 movie depicting a testosterone-heavy brokerage firm that ultimately implodes. “Theft and craziness come from ‘sky is the limit.’ Some people respond to that well, but the negative impact it has on the culture of a company is underappreciated.
“We wanted to remove all of the notions of intrinsic motivation and focus on letting people do great work, because that’s motivating enough. The strongest motivator that I’ve found is to allow people the freedom and the space to do great work. Good people show up every day wanting to do great work. That only stops being true once a company beats that out of them.”
Does it work? Launched in 2004 originally under the name 37signals, the Chicago-based project management software as a service (SaaS) provider has become a household name with a cult following among businesses and developers. Heinemeier Hansson says average tenure at Basecamp is over five years versus an industry average of 18 months.
‘Soft and fuzzy’ gets it done
If that all sounds soft and fuzzy, it’s because soft and fuzzy works, says Bill Eckstrom, president of EcSell Institute, a business management consultancy based in Lincoln, Nebraska. EcSell Institute has measured the correlation between sales management coaching and sales goal attainment and the results are too impactful to ignore, Eckstrom says.
The company has a series of “Through the Eyes of the Sales Rep” surveys. One survey of more than 600 reps focused on the differences found between reps who report very strong agreement that their manager motivates them to higher sales performance against the reps’ responses for all other manager types. It found the five most impactful sales manager behaviors that motivate reps to greater sales performance are:
- Getting to know reps on a personal level
- Modeling how to productively handle stress
- Giving feedback on sales skills that results in increased sales
- Discovering and utilizing their rep’s best skills and abilities
- Caring about reps individually
EcSell Institute’s studies show that the stronger a sale rep agrees with the statement, “My manager cares about me as a person, not just a sales producer,” the higher that rep performs.
“The hard part is that sometimes, salespeople will tell you they want a manager who gets out of their way and lets them sell,” says Eckstrom’s colleague, Sarah Wirth, vice president of client services. “In fact, in one EcSell survey, reps ranked their manager’s ability to coach as seventh out of 10 characteristics. One year later, after their managers had completed training that helped them become better leaders, coaching jumped to the top spot in importance. “Once they’ve experienced it, they value it most,” Wirth says.
Building skills builds relationships
A sales team’s connection to a manager has a profound impact on the team’s success or failure, agrees Jeffery Anderson of Spring Venture Group. One of the most impactful ways that a manager can show genuine interest in each rep is to inquire about their long-term goals and assist them in getting regular training and building their skills.
“It’s important to recognize that development and mentoring of a team is an ongoing process and the only way a company becomes truly great,” says Anderson. “Unfortunately, too many organizations let their sales teams operate with a mercenary mindset. Too often, managers do daily check-ins on production numbers and never go beyond that quota to focus on personal and professional career development. That is a huge mistake. Sales is one of the most rewarding careers you can have, but only if you have an engaged management team that is dedicated to fostering a coaching culture.”
One of the most commonly stated reasons that employees become disengaged is because they don’t feel they are getting enough learning and growth opportunities, agrees Halelly Azulay, CEO of TalentGrow, a consultant company focused on developing leaders and teams. Azulay says companies can create development opportunities on a shoestring budget by thinking outside of the classroom. “Mentoring, special projects or teams, and social learning opportunities are just three examples of ways that employers can create non-training, low-budget development opportunities for all employees.”
Of course, that requires companies provide ample opportunity for their managers to increase their skill sets through training as well. (See our Nov/Dec 2018 cover story, “Minding the Training Gap: What’s Behind the Dearth of Sales Management Training?”) Azulay says it is imperative that companies abandon the practice
of promoting sales stars to management and letting them sink or swim without any training.
Here again, Azulay says, training does not necessarily need to be formal all of the time. “There are a lot of ways to grow leadership skills outside the training classroom, such as using a volunteering role outside of the company to grow leadership skills, pairing up with a mentor or even serving as a mentor before they’re promoted so they can hone their leadership skills and be more ready for the promotion.”
Engagement begets engagement
Just as helping reps acquire skills and advance their careers increases job engagement, helping managers grow has the same effect. In other words, a manager who is engaged in his or her career is more likely to instill that feeling among those being supervised.
Sales managers who are engaged want to know more about the aspirations of those they manage, as well as the challenges they face. Bill Catlette and Richard Hadden, authors of “Contented Cows Give Better Milk,” refer to it as “sitting on the footlocker.” They get down in the trenches and share the experiences of those they manage.
Michael Stahl of HealthMarkets, who characterizes his management style as “entrepreneurial,” says, “Our core management team works at being strategic and high-level, and we can navigate at that level. But we also have to take out the trash. Someone has to get in the muck and actually get stuff done. We work regularly alongside our team.”
Indeed, it is only by working alongside the team that managers can generate ideas for improvement, whether those are for individual workers or the team as a whole. Zack Taylor, who runs sales and marketing for Life Insurance 420, a life insurance agency dedicated to helping marijuana users navigate the vast number of life insurance carriers, says this sort of hands-on management fosters creativity from the management side of the equation.
“I had a manager who often asked me, ‘How can I help?’ The answer in my head was always, ‘I have no idea. How can you?’ I didn’t respond
so snarky, but it was an unfair question to ask, and I never had a good answer. Instead, he should have approached me with his own ideas on how he could help.”
The high cost of disengagement
The bottom line is that disengaged workers are too costly to ignore, whether that’s at the sale rep level or in management. Studies by the EcSell Institute show the difference between managers who are able to motivate their teams and managers who aren’t falls anywhere between $2.5 million and $4 million in annual revenue.
“Unengaged workers will not perform to their full potential, and they will be looking for any opportunity to jump ship and find a position
that better aligns with their personal goals and aspirations,” says Mark C. Perna, generational and performance expert, and author of “Answering Why: Unleashing Passion, Purpose and Performance in Younger Generations. “Quality will most likely suffer — and innovation certainly will — as these workers will choose not to invest any more of their time, creativity and intelligence in their work than they absolutely have to.”
What’s more, Perna points out, unmotivated workers don’t function in a vacuum. They can be a huge drain on company morale as their “do the bare minimum” attitude influences their coworkers.
According to Gallup, organizations that are the best in engaging their employees achieve earnings-per-share growth that is more than four times that of their competitors. Compared with business units in the bottom quartile, those in the top quartile of engagement realize substantially better customer engagement, higher productivity, better retention, fewer accidents, and 21 percent higher profitability. Engaged workers also report better health outcomes.
Heinemeier Hansson and Fried, who are adamant about creating a “calm company” that eschews work weeks longer than 40 hours, emphasize the importance of managers protecting their workers’ time so they can accomplish what’s necessary and avoid what is not.
“We don’t believe in busyness at Basecamp. We believe in effectiveness. How little can we do? How much can we cut out? Instead of adding to-dos, we add to-don’ts,” they write. “Being productive is about occupying your time — filling your schedule to the brim and getting as much done as you can. Being effective is about finding more of your time unoccupied and open for other things besides work. Time for leisure, time for family and friends. Or time for doing absolutely nothing.”
It just may be that clearing your workers’ schedules to do nothing is the surefire way to get them to accomplish a lot more.