Keeping Your People Engaged in Tough Times

Harvard Business Review

April 17, 2009


by Marshall Goldsmith

Marshall: I hear this concern every where I travel these days. Who doesn’t? My friend Joe Wheeler, Executive Director of The Service Profit Chain Institute, recently co-authored a book with Harvard Business School Professors James L. Heskett and W. Earl Sasser, Jr. entitled The Ownership Quotient, Putting The Service Profit Chain to Work for Unbeatable Competitive Advantage. I asked him for his perspective on this question. Here’s his take:

Joe: Managers across the country are facing tough decisions as they try to manage their cost base against diminishing demand. In many cases, this affects labor costs and the potential for layoffs, furloughs, or other cutbacks. These disruptions can have a nasty impact on employee morale and commitment.

In our book, we studied the practices of organizations like Wegmans Food Markets, ING Direct, and Harrah’s Entertainment … organizations we characterize as “service profit chain leaders.” They achieve a large percentage of ‘owners’ in their employee base … employees that are highly engaged and demonstrate an ‘ownership’ mentality. These employees recommend new employees to the organization, and participate in efforts to improve current products, services, and processes. This engagement inevitably leads to greater success for the company, and is of significant benefit especially during tough times.

Here are three things you can do to maintain and foster an ownership culture:

1. Communicate, Communicate, Communicate

Of course you’re busy searching for business to keep the organization afloat. But employees with an ownership mentality want to know what is happening in their company. Set aside time regularly to provide your employee-owners with information that will help them understand their short-term job prospects. Just as important, provide them with specific plans for using the next 18 to 24 months to reposition the organization for the next decade.

There is a lot of anxiety and uncertainty in many organizations today. In some cases, it interferes with quality and productivity. Merely recognizing employee concerns can help alleviate them. Relatively inexpensive employee counseling can become memorable at times like these. These actions, coupled with incentives that elicit new ideas for improving operations can send important positive messages at a time of stress. They can foster “ownership” behaviors … loyalty, high productivity, and referrals of others as potential employees … that enhance the lifetime value of members of the organization.

2. Appeal to the Better Nature of Your Employee-Owners

The current economic crisis provides the national government with the basis for establishing a citizenry characterized by volunteerism. It provides you with the “burning platform” necessary to enlist everyone in transforming your organization to win the competitive battles of the future. It’s a great time to engage employee-owners in coming up with ideas to deal with the downturn. This doesn’t have to involve an elaborate “program,” just an organized appeal.

It may involve juicing up an already existent effort. For example, at Baptist Health Care, an organization regularly cited as one of the best places to work, managers lead discussions on subjects such as survey results and solicit ideas for ways to improve customer service as part of an ongoing Listening and Learning program. The resulting “customer snapshot reports” compile all employee observations and ideas for general distribution.

3. Upgrade Talent: Avoid the Freeze

Winners like to work with winners; losers like to work with winners; but winners don’t like to work with losers. Who are the losers? Ironically, many times it’s not those who are performing at a sub-par level; they often can be coached and supported in ways that help them improve their productivity. More frequently, it’s those who violate the norms of the organization and can’t manage by the values shared by others. In the context of the organization and its culture, they are regarded as “jerks” by their colleagues … jerks who are tolerated because of the ability to “make the numbers.” But most often, the “losers” are simply those who are not inspired and excited about the business, who go about performing the necessary but not the extra.

Now is the time to let go of the losers, thereby raising the average level of talent in the organization. That doesn’t mean a freeze on hiring, however. Instead, it may be a great time to take advantage of a depressed talent market by making a few strategic hires of long-sought candidates from competitors or other organizations.

Marshall: Thank you Joe! This is great advice. To learn more about The Ownership Quotient visit or email Joe here.