Vibhas Ratanjee on Building Agile and Engaged Organisations | Business Transformation Podcast [010]

Welcome to the Business Transformation Podcast. I’m your host, Heath Gascoigne. This is a show where I cut through all the hype and noise and get to the facts of what actually is business transformation and what is required, how to and how not to do it. I’ll be talking to industry experts and professionals to share their stories, strategies, and insights to help you start, turn around, or grow your business transformation. By the end of this podcast, we have some practical tips to use to make your business transformation a success. Whether you’re just at the start of your journey or midway through, I hope you enjoy.

(interview)

Heath: Hello, my name is Heath Gascoigne and I’m the host of the Business Transformation Podcast and this is the show for business transformators who are part business strategist, part business designers, part collaborators, and part negotiators. Business transformators have moved past just business design and includes oversight of implementation of those business designs and business transformations and includes stakeholder management, coordination, and negotiation. If you work in strategy development and implementation and work to ensure that that is aligned to the business design and technology, then you’re probably a business transformator. This is the show where we speak to industry experts and professionals to share their stories, strategies, and insights to help you start, turn around, and grow your business transformation. Welcome to the Business Transformation Podcast and in this episode, we’re talking to one of those industry experts. We are speaking to Vibhas Ratanjee, I hope I pronounced that right. So Vibhas is a senior practice expert at Gallup based in Los Angeles, California. Vibhas specializes in organization development, cultural change, M&A integration, and executive-level engagement strategies, including street space leadership and succession management. Vibhas is also an executive coach and leadership consultant to senior executives and CEOs. Vibhas works extensively in the healthcare, retail, and financial services sector. Vibhas is a well-known speaker and author and has contributed to several articles on leadership and organization development as well as new technology, how that will alter the future of work and the customer experience. His writings, research, and work have featured in several global publications including the Gallup Business Journal, Forbes, and Harvard Business Review. Vibhas is also a contributor to the American Journal of Managed Care where he writes about healthcare technology and healthcare employee experience. Vibhas also serves as advisory board member to the University of California, Riverside Executive Design Thinking program. Vibhas, thank you for your time. It’s great to have you here. Now, you have a great background in terms of both practical experience but Gallup itself is well known in its research and analysis of the market and trends. So, you know, really good to have you on board.

Vibhas: Thanks for having me, Heath. It’s a pleasure.

Heath: You’re welcome. Okay. So, you know, you’ve got a vast experience there, healthcare, which, you know, we covered that quite extensively and we’re still going because it’s still a very topical subject right now but so we can keep the agenda contained, because we can carry a lot or cover a lot because I know Gallup covers a lot of markets and market data and insights. So, for the benefit of us and the viewers, we’ll stick to, let’s say, agility, culture, and Gallup’s findings about transforming culture to achieve agility, which, if it’s possible and how do you do that, and then we’ll get us some probing questions, we’re gonna dive a little bit deeper. So, first off, you know, agility right now, I think, my personal experience is when I go into projects and programs and with clients and they talk about, “Yes, we’re agile,” and I think they’ve caught on to this name and it means different things to different people. How do you find it?

Vibhas: Absolutely. I mean, probably as many definitions of agility as people trying to define it.

Heath: Oh, yes.

Vibhas: So, it’s certainly moving away from a buzzword to actual practice but there’s a lot of confusion around what it actually means. A lot of Gallup’s work is in the area of agile culture and building an agile culture and I think that’s really important. So the way we define agility is its process and mindset and I think both of them are incredibly important. So when you think about doing agile, you know, something people talk about a lot, “I do agile,” which means they do scrum teams and you lean and so on and so forth, that’s important, that’s the process, but being agile is mindset. So when we work with organizations in developing an agile culture, we focus on both, the process and mindset. And that’s incredibly important.

Heath: It’s interesting because I think the mindset part is completely overlooked. People will go and follow a process or attend the classic agile ceremonies. They have these things called stand-ups or scrums and they turn up every morning and the intention originally was, you know, you’re gonna talk about three things, what you did yesterday, what you plan to do, and your roadblocks, and then sometimes it gets a bit out of hand and you’re telling your life story and instead of a five-minute stand-up, because you’re supposed to be standing up, everyone is sitting down and then it’s not a scrum, you know, it’s everyone telling their whole life story. But then you get people that, what you call them? Agilists, really people that, let’s say, deep in the philosophy of agile, and if you’re not doing agile by the book, maybe the 12 principles, then you’re not doing agile at all and therefore you’ve bastardize it and then people get upset because you’re not following agile. But I think if we step back to what you just said about mindset, I think first and foremost, like I tell my students is that, you know, first and foremost, agile is about a mindset. It’s about doing things actively, quickly, getting them out and iterating and getting feedback and constant feedback and update those and iterate, you know? However you do that, whether you want to do scrums or your scrums is classic scrums or it’s another type of stand-up but, first and foremost, it is, I think, the “Done is better than perfect” mindset as you get away from the perfectionist mindset that we’ll be getting away from waterfall requirements of everything is very clear gated and we cannot proceed past this point until we know we’re 100 percent with absolute clarity, but that’s great, if the world didn’t change around it, then that’s where agile comes in.

Vibhas: It’s interesting. I mean, there are a lot of what I call agile purists who, like you said, you know, follow the process and so on, which is great, you know? Because, you know, there is a method to their madness when you think about agility and agile working, but you can practice the best agile tactics from the playbook and yet not have a culture that supports agility. That’s possible. When you’re so focused and fixated on the process. I’ll give you some numbers. So I mentioned agility is process and mindset. So we did a big survey in the European Union and the US to try to understand, well, how many employees in an organization truly feel that their organizations, one, have the process for agility and mindset, and then what we’re really looking for is kind of those who feel both exist, you know? Both process and mindset exist. Let me give you some numbers here. We can say that those who say both exist, process and mindset, is agile, somewhat is one is there but the other is not is kind of partly agile, and then, of course, those employees who say, “Well, neither process or mindset exist,” are not agile. The number for the US is 18 percent. So 18 percent of employees feel — yeah, exactly — that their organizations are fully agile, about 59 percent feel not agile. And the number for UK, I wanna share the UK number with you for sure, it’s 13 percent, it’s even lower than the US number.

Heath: Okay, wow.

Vibhas: So if organizations are just focusing on, like I said, you know, the fundamentals of agile, which is, of course, very important, and yet not creating that ecosystem that supports fast decision making environment and I would say a culture of coaching and feedback and all that great agile purity is not worth much.

Heath: Oh, yeah. So, wow, if only a quarter of the very similar stats but UK is lower, that as organizations and then if we extrapolated that out to industry to then population, then, you know, all the singing and dancing and banging on the drum, “Agile, agile,” and then you ask them how are you feeling agile and there’s only, say, only a quarter of the people actually feel like it’s agile, then well maybe we should step back and say, “What are the benefits of being agile or agility as opposed to currently?” Well, if we look at, let’s say, the pandemic, for example, how in the last two years that that came on really fast for those who knew about it, who didn’t know about it came on really fast and then organizations needed to adapt and adapt quickly. And if you weren’t, let’s say, agile, then you couldn’t adapt quickly. Like the working from home is one that was like a novelty and now it’s like almost everyone who could and can work from home does, but if you weren’t agile and didn’t have the ability to do that, then you would be probably, for lack of a better word, dead in the water.

Vibhas: Yeah. I think those organizations who before the pandemic truly had an agile culture probably did better than those who just had it in the name of process. And with the pandemic, it’s kind of interesting because you gotta translate everything we know about agility to the virtual scenario so you think about scrums and stand-ups being done virtually and both you and I know that that doesn’t work, you know? You can’t do stand-ups virtually and have the same level of impact. I think civilizations who have that as a foundational level, a culture of agility, I think they would have probably done, you know, stand-ups virtually and still been very effective. But I do feel that for agility to really work, we need people back in the office and working there. That’s —

Heath: I’m gonna quote you on that —

Vibhas: — hopefully gonna happen.

Heath: Yeah, I’m gonna quote you on that because I think the silent victim in the middle of all this, about working from home and everyone’s excited, “Yes, I get to work from home and the freedom, I don’t need to travel,” but the thing that no one is a spokesperson for is the culture and I think what will happen is, and I’ve had a couple of people comment on some posts that I’ve done, actually, back in Australia, that the program director commented on, “We are all fully 100 percent now —” since a few years back now so it’s about maybe 10, 15 years, and he said, since I’ve worked with him, and he’s going, “We are 100 percent working from home remote, but we’re only gonna come together for a meal,” and I said, “So why don’t you just sit at your desks and on the computer and have your meals at your desk watching on the screen?” He goes, “Oh, no, we have to eat together.” So you have to be together just to have a meal, do you not see the similarities of the comradeship that you develop being in the same room and the bonds that you develop and the team work and the collaborative working and the culture, that’s where it’s developed, in the room, in the building, not this — you know, I see that the culture is the silent victim and no one’s waving the flag for culture. What’s this? The culture’s gonna get destroyed.

Vibhas: I think that’s true and you know what, this shift to work from home and remote, I think it’s here to stay so we’ve got our best researchers to estimate, looked at all our data to estimate what happens, what will happen in the future, and our estimate is that there is gonna be a 37 percent reduction of in-person days. That’s gonna be there. That’s the shift that’s happening. But I think what will happen in the future is this hybrid work, where you’re actually kind of doing a three-two so you’re doing three days in the office and maybe two days working remotely and so on, or some variation of that. I think that’s welcome because, you know, so you’re saying that when you can collaborate, you maximize that.

Heath: Yeah.

Vibhas: I mean, you think about agility, you’re maximizing the time in the office, even though you’re kind of — I think about our research shows that about 5 in 10 would prefer some kind of hybrid work, which is great, you know? Hybrid work is fantastic. Because that’s where the culture, kind of translating culture and the rituals and the symbols and everything that is associated with culture to this kind of Zoom, remote is not always optimal.

Heath: Yeah, yeah.

Vibhas: So I think that hybrid agile working needs to be redefined.

Heath: Yeah. I think there’s two types of hybrid. There is like organizations who have a central head office but they also have satellite, which they may have now even brought or leased out a co-working site and instead of people commuting all the way to the head office, now they can commute to a local satellite, co-working, and then instead of working in the office and they’re not working at home, they’re working in this co-working location. Was that another version of hybrid?

Vibhas: Yeah, it certainly is. I think, clearly, you’ll see that even infrastructure and offices will change. I think there’ll be fewer cubicles and maybe for more collaborative working spaces, for instance, that’s the future. And I think that’s welcome, because, you know, already we are going away from offices to kind of open spaces and training rooms and collaboration spaces and all that. I think more effort needs to be put in there, where employees feel good about going back to work, you know? I mean, they’re calling it the returnship, not the internship, but the returnship —

Heath: Oh, returnship.

Vibhas: — how do we get the employees back. Yeah. And that thing, and at Gallup, we talk about kind of the workplace value proposition. So, a company needs to build this workplace value proposition to attract employees back to work, back to the office and give them a reason to return. And the reason to return is all the stuff that you mentioned, Heath, like collaboration, you know, that camaraderie that goes with it. You know, we need to reconnect with that human interaction and human connection. That’s obviously been missing for the past —

Heath: Yeah, yeah. That raises a good question about, we talked about culture. It’s pretty hard to define what culture is, isn’t it? What is culture? Ways of working? Where it’s like —

Vibhas: I know.

Heath: Yeah.

Vibhas: Yeah. Culture is again, some kind of intangible — like what we know about culture, we have a very easy definition of culture. We define it as the way things get done in an —

Heath: The way things get — The way we do things.

Vibhas: That’s as simple as that. It’s a very functional definition of culture, I guess, but I really think of culture as emergent. It’s ever evolving. And it’s very unique to an organization so sometimes I’ve seen organizations try to kind of define culture in very stereotypical ways, like you’re a warrior culture or you’re a servant culture. That doesn’t matter. Culture is who you are, you know? So I think that’s gonna be important. I think culture and how it gets represented as behaviors and the right behaviors is important. That’s what you need to be kind of focusing on. We talk about cultural norm at Gallup and the work we do with organizations, but the term we use is “organizational identity,” which includes —

Heath: Organizational identity.

Vibhas: Identity. So it’s not just culture, because culture sometimes tends to be very insular, like, “This is who we are,” but how are you seen by customers? How are you perceived? So that’s — The second component of organizational identity, the first is culture, and that’s brand.

Heath: Right.

Vibhas: And the third one is purpose, which is the why. So when you start thinking about culture broadly, you need to think about not just culture but brand and purpose as well. And also today when the why for an organization is becoming increasingly important.

Heath: Yeah, the purpose, purpose-driven organization, where there was some, what do we call it? Social and economic ESG? What’s the acronym?

Vibhas: Yeah, ESG. Yeah.

Heath: Yeah.

Vibhas: Again, more than a buzzword, you know? I mean, everybody’s talking about ESG right now and so on. What does it actually mean to you? And not just tokenism, like, “Hey, we are, you know, ESG is a focus and look at what we’re doing,” and so on but having the organization really, kind of every level of the organization, leaders, managers, employees together believe in that purpose, believe in the ESG purpose, and actually do more to uplift society or communities or markets and economies and so on, I think that needs to be done.

Heath: Yeah, not, what is it? It’s like back in 2000, it was the vaporware of technology that you could tell a story but it did nothing, it didn’t even exist. So, you know, I think it’s like, yeah, some organizations might have this thing about values and it is espoused values versus enacted values. “We say this, however, we do not do that.” Yeah, maybe the intention was there but the execution is a little bit lacking, for better word, or maybe that was just for marketing that they talked about it but they had no intention of doing it.

Vibhas: The values question is an interesting one. So, if you think about an organization with values like respect, integrity, teamwork, and excellence, you think about this organization, you think that’s a wonderful organization, they value teamwork and so on. These were the values of Enron. You remember Enron?

Heath: Oh, yes, Enron. Yes, the big Enron, yeah, yeah.

Vibhas: So it doesn’t matter what buzzwords you put in your value definitions. In fact, our research says that a quarter of employees, about 23 percent, only 23 percent can strongly agree that they can apply their organization’s value to the work they do. So, you can keep talking about values, but unless you actually translate them into behaviors and guidelines and guiding principles, it’s just a bunch of words on the wall in your corporate headquarters, right?

Heath: Yeah. So, someone, probably an advisory consultancy came in and said, “This is going to be really good for you and so you should do this,” however, and then they left and then it was up to the CMT, the senior management team to come up with, “What does that mean and how do we implement it?” and then it kind of fell apart.

Vibhas: Yeah, I think values needs to be something that everybody understands. And one of the things in my work with values and helping organizations define values, I do not work just with the leadership team because that’s the narrowest way you can define leadership, what they call the retreat, right? Like, the leaders come into a room, lock the door, and come out, “These are our values,” but really a participative approach. So like ask employees what they value the most. Ask employees about high point experiences they’ve had. Ask employees why they joined the organization in the first place. They’ll tell you what they value the most. So that kind of participative approach is really important. Otherwise, it’s just the senior leaders kind of sitting in their ivory towers and telling people what you should believe in, you know?

Heath: Yeah, the guys upstairs. Yeah, the guys upstairs who got together as executives, they had a retreat and brainstormed a few ideas that were probably given to them by the consultants that facilitated that thing. Yeah, okay. So there seems to be, both with agile and maybe values and maybe culture, that there is, probably exactly that there, people talk about it but the execution isn’t as good. If it’s, you know, 17 or 15 percent of staff in organizations think that they, one, can do and are doing agile, going, “No, you’re not really,” so where’s the opportunity there? If businesses could be, what are they doing well and what are they not doing?

Vibhas: You know, organizations need to kind of look internally and understand where the barriers are, not just the process of agility, like we talk about the culture of agility. And, typically, you need to kind of first determine kind of the from to the to, you know, like what is your from-to? Where are you today and where are you trying to go? I think —

Heath: Yeah, current state and future state, yep.

Vibhas: The current state and the future state in consulting lingo, but, you know, something it’s as simple as that. Typically, when you go into an organization, we do what’s called a culture audit of sorts, you know, like kind of go in and really truly understand how culture has lived on the ground and not just at the top levels, you know? You’ve gotta go really deep into the organization.

Heath: Yeah, the operations.

Vibhas: The operations, I think that’s important. And from there, you’ll actually see that culture is multidimensional and there’s both good and bad culture, you know? For example, I’ll give you an example. One organization that I’ve recently worked with, it was very clear that they have a very relationship-driven culture, relationship orientation. The good parts of the culture, of course, are, you know, when you think about agility, people working together, people having great camaraderie and, you know, a very familial culture and so on. But the same cultural attribute like relationship also has the dark side, you know? Like who you know matters the most. There’s groupism, there’s herd mentality, you know? So when you think about agility and you’re trying to go in and you start putting just the process, first you need to understand whether the organization is ready to receive an agile culture. Then you gotta start looking at that dichotomous multi-layered approach of culture. And the mistake a lot of executives make is, “Let’s fix culture. Let’s go and let’s do this,” and all of that. It’s not easy. It’s not easy to fix culture —

Heath: Yeah, yeah.

Vibhas: — you’ve existed like that for years, you can’t just come in and start doing something different.

Heath: So there’s the old saying about culture eats strategy for breakfast. You might have the best strategy, even the most money to execute that strategy, but if your culture doesn’t support it, then good luck to you, like that is literally dead in the water.

Vibhas: I agree. Culture eats strategy for breakfast and culture eats process for lunch, something like that. I think that’s the thing, you know? Starting with that deep understanding of who you are is going to be so important before you start putting any kind of process in place.

Heath: Okay, so I missed it, I’m writing a lot of notes here, so what eats for breakfast? Process —

Vibhas: I’d say — this quote is kind of attributed to Peter Drucker, right? And I don’t know whether he actually said this but there’s a lot of stuff that said he actually did. But, anyway, culture eats strategy for breakfast, I think culture eats process for lunch is what I’m trying to say.

Heath: Yeah, process, lunch, yeah. You know, and you talk about — I like to look at big organizations as, let’s say, spearheads or indicators of where the market may want to go, as leading indicators, like Google. Google, they just bought up billion-dollar building here in London, in Kings Cross, for their staff. So, I remember not too long ago that it was both Apple — well, three, Apple, Facebook, and Google were saying that there’s no requirement for their staff to return to the office. And now it’s, “We just bought a billion dollar building to bring our staff.” It’s like, wait a minute, that’s not working from home, that’s sending a very clear signal that everyone’s coming back in the office. So what have you learned from maybe this last two years, you’ve got the ability to capture a lot of data, data for a lot of things, both your organization and the world, maybe you’ve got some leading indicators yourself, and that’s a big signal to say, “Hey, we’re moving back in the office. Maybe this hybrid model isn’t as good as all cracked up, you know, touted to be, especially now we’ve spent a significant investment to bring everyone back into an office.”

Vibhas: Yeah, no, I see that as a welcome sign. I see that as a welcome sign that there’s still, you know, a lot of interest in working from office at least some of the time. And I think that’s important, because although we talked about work from home being something that is really — created a lot of difference for people. And it has. It has to me as well, you know, as you can see, I’m speaking to you from home, not the office. But at the same time, our research is -0- it’s interesting, there’s this is well-being-engagement paradox that you talk about. What’s happened with remote workers is their overall engagement has gone up. When I say engagement, I mean employee engagement so how you feel about the work you do. That’s gone up. But well-being has not necessarily gone up. Well-being has actually gone down. So what’s happening is that high levels of stress, even when you think about working from home, do we exist? I think that balance between well-being and engagement, connection with work, connection with your life and, you know, when we define well-being, we don’t only talk about physical well-being because that’s typically what people talk about, we think about other elements of well-being as well. We wrote a book called Well-being at Work that we published recently and now there’s other elements of well-being —

Heath: Well-being at Work, okay, we’ll put the link in the show notes.

Vibhas: Sure.

Heath: So there’s two parts there — wellness and engagement, and wellness being —

Vibhas: Yeah. Well-being and engagement, but well-being is multidimensional, like there’s social well-being, there’s community well-being, there’s financial well-being, there’s career well-being. All these elements together comprise well-being.

Heath: Okay, the engagement —

Vibhas: That’s the key.

Heath: So engagement being what? How well they’re engaging with the organization that they were disconnected? They feel like they’re part of the team, maybe isn’t respected. valued.

Vibhas: Yeah.

Heath: Okay, you know, I think, and I was just speaking to a client about the effort they went through for the lockdown. There were some people in the last two years that have never stepped into the office, new starters and they’ve never stepped into the office in two years because they didn’t need to, but the way they did the onboarding was sending out their laptop and it was open, it was like an unboxing experience of getting a new Apple and everything felt like that you were really well welcomed, there was — and even they were saying that they had a budget for monitors and chairs that they could go buy and shop where they wanted to, you know, make their time at home in their home office more enjoyable. And then all the connectivity to the different apps and all the messaging was like, you know, no problems and they said the effort they went through and they had ongoing like weekly well-being calls, even a group and individual, so, whoa, you guys were way out, and they got gift bags, I think they said. I said wow, yeah, so the engagement was very strong. And then think there is, which they were talking to me because they needed a transformation there, no, they’re fine and they can’t transform because the culture is so strong that they, you know, they liked the way they work now. So, whoa, okay, so now you’ve almost created your own beast. Now you want to change the beast, you can’t. So, yeah, interesting.

Vibhas: Yeah, yeah. I think that — I like that idea about well-being and onboarding people in the virtual environment. I think about it as three-two, like three days, the hybrid working environment, I’d say onboarding, I think it needs to be in person, you know? If it can be, with all the, you know, kind of the safe health and safety standards upheld and I see a lot of organizations doing that. So in fact, can you imagine when you kind of come in to work, you’re onboarded, there’s a conversation with your manager, and so on and as part of the conversation is the conversation about your well-being, about working remotely and, you know, who do you have connections with? What other resources are available to you? Can you phone a friend if you need to, you know? Who is that friend? That kind of thing. So it’s almost like setting up that human connection. Because I think a lot of employers over the last two years have been onboarded via this computer screen and I think that there’s a disconnection to everything. There’s a disconnection to the purpose of the organization. There’s a disconnection with your work, with your manager, and so on. Human connections matter. Some way there, when we go back, and we will go back to the workplace, it has to be in that hybrid model where, as I mentioned, maximize moments at work in the office where you have great resources, great managers, great coaches who are helping you, and then you take all that energy when you work the two or three days from home.

Heath: Remote, yeah.

Vibhas: That balance is gonna be important.

Heath: Yeah, yeah. Well, that reminds me of when I did my MBA back in Australia, the Executive MBA, and so what happened in that final year is that we would spend a week and a half four times a year together on site on the campus and these workshops were almost 24 hours, it was the crack of dawn to almost the crack of dawn in the morning and we did that for a week, a week and a half, and then we went back to our different cities where we are in the country and we worked remotely, but because we built that bond of just, you know, so that cracking through the work but being put to work, that we had built that strong teamwork ethic that, you know, it was almost like, when we were remote, it was almost like we were in the room all together because we built that intensive friendship and collaboration because we were there together. So I think there is a good element of that, the hybrid, some time in office, some out. But I wanna talk to you about, you know, because for those that don’t want to come back to the office, what is the latest thing? You talked about the returnship but what is the other one? The great resignation?

Vibhas: Yeah. Yeah. I mean, I think the great resignation, obviously people have talked about it quite a bit. It’s gotten a lot of press. And we think that it’s not really the great resignation as much as the great discontent.

Heath: Yeah.

Vibhas: That’s the one to kind of talk about, because, you know, and I talked about employee engagement and a recent polling shows that, in the US, about one in three are engaged, employees are engaged. That’s a pretty low number. And, incidentally, that’s a number that hasn’t changed, largely unchanged for the past 10 years. We’ve been polling this for quite a long time.

Heath: Oh, wow.

Vibhas: So imagine all these changes that have happened, you know, all the technological changes with this one number we’ve not been able to move, about 16 percent of US employees are actively disengaged.

Heath: Actively disengaged.

Vibhas: Actively disengaged is the label sometimes that’s used and, you know, I mean, there’s an acronym we use for the actively disengaged sometimes and that is CAVE dwellers, where CAVE stands for “constantly against virtually everything.”

Heath: Constantly against virtually everything.

Vibhas: Everything, so whatever your engaged employees are building, you know, there’s a lot of destruction that’s happening with actively disengaged employees. By that, I don’t mean that actively disengaged employees don’t want to be engaged or that they’re bad employees. They’re not. They’ve not been engaged. You know, employees walk into work neutral. It’s the organization, the culture, and everything else and the manager that makes them either engaged, not engaged, or actively disengaged.

Heath: I think I may have experienced that. Would you call it a culture or is it like — is it a phenomenon?

Vibhas: Yeah, active disengagement, yeah.

Heath: Yeah, I think I’ve seen that in some of the transformation projects that I’ve being called into.

Vibhas: Sure.

Heath: Well, that’s where I should start but fix because they are, you know, behind budget and time and then you get some staff members there that, you know, let’s say continuously against virtually everything and I think maybe that’s a symptom of really strong culture, that, you know, if it’s one person, maybe it’s an anomaly, it’s one-off, but if it is systematical, it’s, you know, widespread across the organization, you go, “Well, no, is that maybe a misdiagnosed strong culture but the culture is maybe misaligned or, for whatever reason, the future, the purpose isn’t aligned with the culture.”

Vibhas: That’s true. And if I were to tell you kind of our biggest discovery over the last few years, it is that, when you talk about employee engagement, 70 percent of the variance in employee engagement is because of the manager.

Heath: Oh, the manager.

Vibhas: Yeah, that’s a huge number. So, you can do whatever you want around process and systems and leadership and all of that, but if you don’t have great managers, think about it from an agility point of view, you know, you’re the scrum master or your manager, if that person is not somebody who he might be an expert on agility and, you know, all of the stuff that you’ve mentioned, you know, the process and lean and waterfall and all of that, but if he cannot clarify expectations, if he cannot provide resources, if he cannot recognize, coach them, encourage their development, people will leave, you know? What level of agility are you talking about when you have terrible managers running your agility programs?

Heath: Okay, so do you see — that’s interesting. So those — just quick, you might have missed that, there was 70% of the reason for staff leaving is because of the manager. And then you said there’s a lesson there for organizations about leadership, maybe managers rather, and then there’s the difference of leaders and managers, you know, you talk about, you know, is there a difference between leaders and managers, it’s almost like say the boss and a leader, you see that little acronym or the meme, which got a difference, you got to like the guy’s pulling a cart and the guy at the back with the whip and say, “He’s the manager,” and then the leader, he’s at the very front and he’s pulling everyone. That’s the leader. And then you go, okay, so if you’ve got a bad manager, how do you develop a — you know, what do you need to do that manager to develop a good manager out of them? Or are you trying to develop a leader?

Vibhas: Yeah, no, and I’m of the view that managers should be leaders too because this old-fashioned notion of leadership, you know, is that the people on the top and all that. I wrote an article on this and the title of the article was “Leadership Development Needs to be Democratized,” you know? Because sometimes when you think about leadership development, it’s like are these elite leaders in the organization, usually the headquarters, they’ll have to go through this accelerated leadership program and all that. Your managers, especially those in the frontlines, you know, operational managers, fantastic managers who actually are dealing with your customers, they need leadership skills as well. I really feel that managerial skills, things like coaching, things like setting expectations, all these are essential competencies, if you may, but there are managers who are naturally talented at being managers, and I’m sure you’ve known and had managers, Heath, you always remember them, made a huge difference in my life. At the same time, you remember managers who you wish you never had crossed paths with them, you know? So I feel that — and great managers are rare. So when you find great managers, hang on to them, you know? With this great resignation, the first thing I’d say is, if 70 percent of the variance is employee engagement, hang on to your great managers. For the others, they have some kind of conditional talent, provide them with training, provide them with some resources around how to coach and how to carry meaningful conversations, that kind of stuff.

Heath: So that’s like the difference between is a leader born or made.

Vibhas: We think that a lot of this talent is kind of innate, you know? There’s a difference between talent, skills, and knowledge. You know, I can teach you how to be a good manager, I can give you a few skills, I can have you read a great book on great managers and all of that, but there are some people who have that innate talent to be managers. If they don’t get the opportunities to be managers, then that’s an issue and instead, you have people who should not have been managers, I don’t consider myself as a good manager, you know, and I was a manager previously, and a terrible manager at that, and I’m much better as an individual contributor so it’s about, you know, placing people in the area of their best talent too.

Heath: So I think the key word there, what I try and push, is competency, is, you know, part of that competency is, you know, knowledge, skills, and behavior, being able to apply that knowledge in the right situation to the right degree to get the right outcome, as opposed to, you know, like I said, talking to a young fella just earlier today who has gone all the way through to almost PhD and never worked a day in his life. I said, “You’re almost an academic without any theoretical experience.” But, yeah, the competency is, you know, that comes back to behavior. You need to be able to understand their environment and to use your skill and knowledge in that particular way.

Vibhas: Yeah, it’s interesting, you know, you mentioned the great resignation. And it’s kind of, I don’t know whether it’s a global phenomenon, it’s certainly in the US and maybe in the UK as well, but I very strongly feel that the biggest thing you can do is focus on your managers. I give you another book. It’s called It’s the Manager, as simple as that.

Heath: Oh, really? It’s the Manager.

Vibhas: It’s the Manager. It’s a rather short book, and we wrote a book a long time ago, New York Times bestseller, called First Break All the Rules, and you know —

Heath: First Break All the Rules.

Vibhas: First Break All the Rules a while ago. We talked about all of this stuff, you know, a long time ago and as I said, for the last 10 years, engagement has largely been unchanged —

Heath: Unchanged, yeah.

Vibhas: — manager will be kind of, yeah, coming back and saying this. So it was interesting that we found out in our research that it takes more than 20 percent of a pay raise to lure you away from a manager who does a really good job of engaging you. If the manager’s doing a great job of engaging you, it will take you 20 percent or more pay raise to actually take them away. With managers who are creating active disengagement, it takes next to nothing to poach the employees. So when you think about retaining your talent, right?

Heath: Yeah.

Vibhas: It’s, again, the manager is going to be so important that you have to support your managers and you care for them and so on, because the managers are dealing with enough already with remote working and priorities changing all the time, supporting managers and equipping them is going to be your great resignation strategy, if you will.

Heath: Okay, that’s a great tip there. Okay. So I think that’s, yeah, that’s a good one, especially when, as an organization generally, as in BAU, is to look after your managers, support your managers, make sure they’ve got everything they need to, you know, deliver on what they need to but those also in transformation and change is that the managers is a key part of keeping and retaining that staff or maybe also attracting, and so it could be the opportunity there, like I just did an HR transformation and the big issue they were dealing with was servicing the HR division, servicing the line managers and not being able to give them the support that they needed to support their guys. And so they’re talking about how to develop the guys in a team to be managers. So, you know, I don’t think it’s well, widely, maybe your research is gonna highlight a bit more to the general public how the organizations need to focus more on managers. That’s 20 percent increase in pay raise to get someone away versus you actively disengaged them, they’re just gonna walk. Whoa.

Vibhas: Right.

Heath: And there’s a lot of money on staff turnover that gets wasted from hiring, onboarding, induction, and then they don’t like the manager, then they’re gonna leave and then repeat process.

Vibhas: Yeah, and, again, in the book, we talked about the analysis we did and this massive database to understand the difference between engagement and outcomes. If you are in a team that’s highly engaged, the chances that you’ll have higher profitability, higher customer engagement, so you’re not just engage the employees for the sake of being engaged but you’re also translating that to your customers, lower turnover. So, you name the kind of outcome that’s important for a leader, we can show you that engagement, if you’re an engaged team, that you can deliver on that. But the key point there is, again, as a manager, of course, but you know, our engagement science and what we’ve developed over the years, there are kind of 12 conditions that you need to be able to be fully engaged in, you know, things like recognition and development. An interesting one is a best friend, a best friend at work, which becomes all the more important, you know, if there’s somebody who watches your back. So, elements like these are critical to engage. But these elements are local, which means at the level of a team, you can actually drive that. So think about an agile team and imagine in that agile team, you’re teaching them the best process and all of that, but you’re also doing all these things, you know, giving them a best friend and recognizing them for the good work they’re doing, giving them the resources, aligning of the mission, so agility and engagement both need to work together in an organization trying to be agile and not just the process.

Heath: Okay, so engagement with agility and then you’ve got 12 points there to being engaged, part of that being recognition, development, support, being the best friend and align which — and to the outcome of aligning to the activities to the mission. You know, I see that with everything you talk about locally in small teams, this is like grassroots, where you have developed that at the grassroots and it takes hold and then it grows and ferments and grows throughout the organization. Okay, you know, prior to this call, I’ll be honest, I’ve seen, you know, my exposure to engagement has really been on change management side when I’m on these projects and it’s an activity that happens because of the project. But when outside of that project, I hear the speech of engagement and I think it is, prior to this, was more a, yeah, dispels values, “We want to do and we say we do but in practice, we don’t do.” But I can see now that engagement is probably, my personal view maybe because I wasn’t paying attention, it’s like you buy a car that you, you know, a rare car, next thing you know, because you’ve bought it, every other car is that same car, I will probably now see a lot of engagement. But in saying that, I think maybe now and for the listeners about, you know, agility, engagement and agility, you gotta have them both together, can’t just — I say disrespect but need to acknowledge engagement. And if you get that right, there’s benefits in many ways, probably both top line and bottom line if you’re, you know, a finance guy and interested in profit and revenue, but also maybe even business owners about keeping good staff and one that’s not going to cost you for high turnover. So, yeah, a lots of benefits. And a couple of books you mentioned. I think there was three in total that I’ll put those in the show notes. It’s the Manager, I think it’s one of those books that you can tell what it’s going to be like by reading the title. So, there’s All About the Manager, isn’t it? And then First Break All the Rules and there was one other one.

Vibhas: Well-Being at Work.

Heath: Well-Being at Work, okay. All right. So I’ll put — is that your book, the Well-Being at Work?

Vibhas: All these are Gallup books.

Heath: Okay. So you would have been a contributor —

Vibhas: Yes, absolutely.

Heath: Okay. All right, I know that you’ve got a hard stop so we’ll wrap it up there but thank you very much, Vibhas. It was amazing. You’ve been the first guest that has come from — has both practical and also the research of Gallup background that can speak to the stats, okay, this is not theory, this is actually pulled out from this is what the market is doing. So some interesting ones there, the UK is losing to the US on a couple of things. But the big indicator that I think what we say we’re doing, we’re not doing, so there’s a few lessons here I think for the organization and transformations around about management, pay attention to them, look after them and that will help your business.

Vibhas: Thank you so much for having me on the podcast. Appreciate it.

Heath: My pleasure.

(outro)

What is business transformation? This is a two-part answer. The first part is what is business transformation, and then when is the change the organization goes through deemed a transformation? Firstly, the definition. Business transformation is where business changes the way it does business. That is, it changes how it creates and delivers its products and services, its CVP, its customer value proposition to its customers. It doesn’t necessarily change what it does, but it changes how it does it.