by Pete Tosh
Founder, The Focus Group

The Best Organizational Metrics are Cash Flow, Customer Satisfaction, and Employee Engagement.

– Jack Welch, former CEO of General Electric


Jack Welch

Jack Welch, former GE CEO
Source: Wikimedia Commons

Recently, Jack Welch re-published an article in LinkedIn Pulse that identifies his three most important measures of organizational health: cash flow, customer satisfaction, and employee engagement. Welch puts employee engagement first in the list, stating “It goes without saying that no company, small or large, can win over the long run without energized employees who believe in the mission and understand how to achieve it.”

Of the three metrics,  employee engagement – since it is impacted daily by every supervisors and managers – offers the potential of faster improvement than the other two measures. Recent research provides useful insight into the drivers behind employee engagement – as well as the practical, engagement initiatives from which all organizations can benefit. These initiatives are interrelated – serving as catalysts for one another.

Here are Three Key Initiatives to drive Employee Engagement:

Initiative #1:  Selecting Talented Supervisors & Managers

Selection of managers and supervisors is a most critical element. Research shows that only two people in ten have the talent needed to be an effective manager. And, all too frequently organizations make poor hiring decisions in selecting managers who lack the necessary managerial talents.

Supervisors and managers have a heavy (65% according to the research) influence on the degree of engagement of their teams. Since only a third of the employees in the U.S. are engaged, it appears that a high percentage of  managers are not creating work environments that energize employees. Possibly it’s because only 35% of U.S. managers are engaged themselves. Employees with highly engaged managers are 50% more likely to be engaged than employees supervised by disengaged managers. And organizations with unengaged managers find it very challenging to overcome that obstacle and increase the engagement level of their front line employees.

Talented and engaged managers attract, retain, and maximize the performance of their front line employees each day. And they do so by clarifying their expectations, coaching, building relationships, holding all team members accountable, and making un-biased decisions based on employee performance. These managerial actions result in enhanced discretionary effort, productivity, quality, employee retention, and even improved safety performance. Retaining & energizing employees costs pennies compared to the dollars involved in replacing them.

Initiative #2: Focusing on Employees’ Strengths

Employees are more likely to perform to their potential when they work for a manager who regularly helps them develop their unique capabilities. Managers can best assist employees in reaching their potential by focusing on employees’ capabilities vs. their weaknesses. Each of us have a unique blend of skills – enabling us to perform better at some activities than others. And it’s human nature to enjoy doing the things that we do well . It energizes us to want to achieve at an even higher level. Think about the positive emotions you experience when you are doing something that you do well.

Over 60% of the employees who say their manager focuses on their strengths are engaged, compared with employees who say their manager focuses on weaknesses. Weaknesses should not be overlooked, but coaching employees to enhance their natural skill sets generates significantly greater performance than trying to improve their deficiencies.

Initiative #3: Measuring Employee Engagement

In his article, Jack Welch points out the difference between measuring employee engagement and satisfaction. Our old employee satisfaction surveys were largely missing the mark. Unlike employee satisfaction surveys, engagement surveys can identify the reasons for employees’ attitudes and behaviors as well as the opportunities available for improving business results. The level of employee engagement within an organization is a much better predictor of organizational performance than the degree of employee satisfaction. Employees place greater value on a supervisor who cares about them and their development than on the short term incentives frequently measured in employee satisfaction surveys.

Many organizations are using these three initiatives to maximize the performance of their human capital – and generate greater growth and revenue. And Jack Welch’s other two metrics – customer satisfaction & cash flow – are also very likely to be positively impacted when any organization increases its degree of employee engagement.

GearsGeorgia Employers’ Association provides a comprehensive, research-based  Employee Engagement Survey for our members. The cost of of the survey is extremely affordable, $17/employee for member companies (with a 75 employee minimum).  It’s a very low risk investment, especially in relation to the potential returns from increased engagement.  We’d enjoy discussing the options available for implementing the survey and any of these initiatives in your organization.

Learn more about Employee Engagement and GEA’s Employee Engagement Survey.