Engage

The good news according to Paul Krugman is that the recession may end this year. The bad news is that it’s effects are liable to linger for five years. When we’re done cheering that we’ve pulled ourselves back from the brink, we find that doing business in this economy is still one tough slog and it’s not likely to get any easier soon.

The question that’s repeatedly asked is how can managers keep employees engaged in times like these. The answer is to get employees engaged.

A crisis like this puts everything on the table. In good times, all of us are eager to protect the status quo, but in bad times, we’re all looking for a change. When times are really bad, we don’t have to be encouraged to move out of our comfort zones because they no longer exist. The bolder the action, the better.

GM is finally getting rid of the car lines they should’ve ditched decades ago. They’re now able to change the terms of the union contract, shutter inefficient plants, and rationalize their dealer network. But these are not bold actions. They’re just ways to cut expenses mandated by a lack of cash and their new owners, the taxpayers.

Bold action would be to completely rethink their business from strategy through implementation. But the first thing that needs to be rethought is the relationship with their people. GM can no longer afford to squander their resources, and there is no resource more valuable then the minds and hearts of the employees. Hierarchy, autocratic decision-making. and pointless bureaucracy are now luxuries beyond the company’s means. Everyone must be involved in turning the company around.

It should start with an aspirational vision for the future and a viable competitive strategy to ensure there will be a future. This is rightfully the province of top management, but coming up with the best way to implement the strategy is everybody’s job. With the strategy as their guide and within their areas of responsibility, all employees should be involved in joint problem solving and planning sessions to come up with the best way of conducting their business. The people doing the work have a wealth of ideas about how to do it better. All that’s needed is a simple process to involve them.

This kind of involvement not only pays huge dividends for the business, it’s just what people need in times of crisis. When we’re engaged, we don’t have time to sit around bemoaning our fate.  When we contribute, we have control over our destiny and feel less stress. When we’re the ones coming up with new ways of doing our jobs, we’re highly motivated to make them work.

It’s not difficult get employees engaged. Now more than ever, they’re eager to participate, and every manager has the tools necessary to make it happen. All they need to do is make it clear what’s at stake and ask for suggestions. There may be some stumbles at first, but managers will soon learn how to guide employees toward practical ideas that they’re able to implement.

The biggest challenge will be for managers to move from a controlling mode into a supportive one. If they genuinely believe in the need for their employees to be engaged, they’ll intuitively know how to bring it about. If they act with integrity and conviction, employees will even forgive a few missteps here and there.

It’s alway been a good idea to involve employees. For the foreseeable future, it’ll be a necessity.

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The Most Valuable Asset

Last week I traveled with my nine and ten year old daughters to visit a school we’ve been considering for next fall.  With two flights, we were in the less than friendly skies and at airports for almost eight hours.  By the time we reached our hotel, we were not in the best of spirits.

This is a hotel we stay at frequently.  It has a long and storied history, represented by pictures in the dining room of past guests, including Shirley Temple and Winston Churchill.  For decades, it boasted a legendary Sunday brunch that was a must for occasions like Easter and Mother’s Day.  But the brunch was no longer and several years ago the hotel was bought by another chain.

We checked in, rode the elevator to our floor, and dragged our luggage down a long hallway to the last room.  When I inserted the key card, the light on the door flashed red. I tried again and again with no greater success.  So we dragged our luggage back down the hallway, took the elevator down to the lobby and walked back to the front desk.

I explained what had happened, and was promptly asked if I had inserted the key card the right way. The conversation went down hill from there.  By the end of it, my prefrontal cortex was working overtime to control my anger-generating amygdala.  My innocent daughters looked up at me and asked why the woman behind the counter was so mean.

As we went back to the elevator, a bellman walked up to us and immediately started apologizing.  He asked if he could ride up with us, and once in the elevator, he again apologized.  I told him that we had often stayed at the hotel and nothing like this had ever happened under the previous management.  He said that the new management had kept most of the old employees, but also had hired some new ones and we were unfortunate enough to have encountered one of them.

This man was masterful at making us feel better and at almost overcoming the bad taste in our mouths from the treatment we had received.  For the rest of our stay, he made us feel at home, and so did the rest of the staff.  It felt just like old times.

If it had not been for the bellman and his obvious love for the hotel, this would have been our last stay.  It isn’t hard to calculate the incremental profit that would’ve been lost, and given how often we stay at this hotel, it adds up to a significant amount over the course of the year.

What makes this hotel work is it’s story.  It’s a bit worn and there are newer and nicer hotels near by, and ones that are less expensive.  But there’s no other hotel where people are quick to call you by name, where your waiter has been there forty years, and where the feeling of pride is palpable. Almost the entire staff lives the story of this landmark.

But not the entire staff.  I suspect being a desk clerk is not an easy job.  After seven or eight hours, I’m sure customers become quite annoying.  But being a bellman or a waiter isn’t an easy job either, yet the story they lived overcame any annoyance they might have felt.  Our bellman had only started his job a year or so before the hotel changed hands.  One suspects the difference between his attitude and that of the desk clerk was management.

The role of management should be to convey the story that takes people beyond feeling annoyed.  When the new chain bought the hotel, they also acquired this intangible story that made the hotel what it was.  Apparently, they failed to realize what they had bought. Their new employee was never told the story.

All the standard lessons are here: the importance of customer service, the cost of the weakest link in the chain, and the need to attend to details.  But there’s also another lesson and it’s about the story that takes people beyond themselves.  Although it doesn’t show up on the balance sheet, it may just be the most valuable asset of any business.

Several days after we had checked in to the hotel, my wife went for a run.  When she returned, she stopped at the front desk for another key card.  Sweaty and exhausted, she rode the elevator to our floor, walked the length of the hallway to our room and inserted her key card.  It didn’t work.

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In Praise of Stories

My friend Charles lives on an island in the Caribbean.  He works at a resort taking care of the beach and the pool.  In blistering sun and dressed in a company issued uniform, he labors twelve hours a day, seven days a week for five dollars an hour.  Most of this princely wage was sent to his mother in Haiti until her death a couple of years ago.

What has always struck me most about Charles is a smile that goes from ear to ear and never leaves his face, no matter how hot it gets or how demanding the guests. Charles is a happy man.

Once day he told me the story of his life.  His father left when he was an infant and his mother struggled to raise him in the horrifying poverty that is Haiti.  When he was nineteen, he boarded a 25 foot wooden sloop with 125 others to attempt to reach the island that is now his home. Three miles off shore, they were spotted by the Coast Guard and Charles dove in the shark infested water with others to swim to shore. Not everyone made it. Once ashore, he lived the life of an illegal immigrant, hiding out in the bush and depending on the handouts of others to stay alive.  ”I was the skinniest,” he told me, “so people took pity on me.”  He found what work he could and learned English from watching cartoons on television. His work ethic was so strong that eventually he was hired full time by the resort.

For almost ten years, he has toiled away.  When his mother died, he started saving a little money and was eventually able to purchase a residency permit, so that he no longer had to live in fear of being deported.  He met a girl, got married, and had a child. Even though he still worked for the same minimum wage, he was living a dream.

Charles wanted to buy a house for his new family and he found one in a low income housing development. It didn’t bother him that it was downwind from the dump and was constantly enshrouded in toxic smoke from the burning trash. In partnership with the developer, the local bank was willing to lend him the money to buy it. He brought the loan note to me and asked what I thought. The loan officer told him he had to sign it right away or he would lose his chance. Even a year after the housing crisis has devastated the global economy, it was the classic subprime mortgage.  The interest rate was exorbitant, the payments more than he could afford, and the rate reset in three years. But the house was part of Charles’ dream.

As it happens, I know the developer.  He’s a former Bear Stearns hedge fund manager that built the development as an investment. He has a lavish vacation home on the island that sits on the water, far from the dump and far from his housing development. He uses it a few weeks a year.

In today’s New York Times, David Brooks writes about several studies on what constitutes a successful CEO.  It is not people skills or education, but a dogged persistence to execute and an attention to detail.  They don’t read novels and are rather dull.  Brooks worries that the new administration will impose a revolution in values on the corporate world.  ”That is the insidious way that other nations have lost their competitive edge,” he writes.

Novels are stories and many cognitive scientists believe that stories are the way our minds naturally work.  Reading novels makes us more attuned to the stories people tell themselves, and help us to appreciate the humanity of others. They broaden our thinking and increase our  awareness of how our actions affect others, both now and in the future.

Perhaps if more CEOs read novels, there would’ve been more forethought and less interest in short term profit.  Perhaps the financial crisis that has damaged all of us, CEOs and minimum wage resort workers alike, could’ve been avoided.  Perhaps then Charles wouldn’t be coerced into a decision that would spell the end of his dream.

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