There are a lot of lessons coming out of the weekend meltdown on Wall Street that shook the financial markets around the world, but one that jumped out at me was this: When a company is struggling for its very survival, no one worries much about what happens to the workforce.
Lehman Brothers, which started melting down last week, is a good case in point. As the company’s fate teetered over the weekend, Lehman workers were at their desks waiting to hear what was going to happen. There was a lot going on, but unfortunately, no one bothered to tell—or even think about—the workforce. When the decision came, Lehman workers heard about their fate the way everyone else did: from the media.
“About 12:30 Monday morning, Lehman sent out a press release announcing its intention to seek bankruptcy protection,” The New York Times reported. “Lehman’s 25,000 employees learned of the filing through the media, with no direct communication coming from (CEO Richard) Fuld or other Lehman executives.”
It’s easy to say that the fate of Lehman’s workforce should be secondary to the fate of the company itself, and although that may be true in a narrow sense, how does it square with the typical pronouncements that most companies (including Lehman) love to mouth about people being their most important asset?
It doesn’t square, of course, but that’s partly because most companies just don’t have systems in place to deal with catastrophic issues like 9/11 or what happened on Wall Street this weekend. Not only do they never consider the possibility, they just don’t ever do much “what if?” planning on how to quickly communicate news of this sort to the company’s workforce.
And that lack of basic HR crisis planning can have all sorts of ripple effects, as the Times story noted when Lehman finally woke up and figured out that it would need some of its people aboard.
“Lehman executives scrambled on Monday to offer incentives to keep employees the bank needs to help wind down trades and sell assets,” the Times reported. “(And) Lehman is already battling to avoid ‘job abandonment,’ in which workers simply stop showing up, even though they have not been formally laid off. Some of that was clearly happening on Monday as some of Lehman’s trading floors were only about two-thirds full. A rush of résumé writing signaled the melancholy of an institution in its final days.”
In contrast to the scene in New York, Lehman’s London staff seemed to roll with things somewhat better Monday, even though workers across the pond didn’t receive any more information from top management than their American counterparts did.
“The Lehman offices in the U.K. were essentially cut adrift and put into administration [the British term for protection against creditors as a company tries to reorganize in a bankruptcy]. There was an immediate ban on trading and staff were told to clear their desks,” according to The Guardian newspaper. “It was surprisingly calm—there was a kind of blitz spirit in the sense that we were all in it together,” one banker told the newspaper. “It was made clear that there was no desire to have us hanging around.”
How does a company like Lehman get caught so far off guard? And how does a 150 year-old institution stay in business so long without any sort of structure to get information into the hands of its people clearly and quickly, especially in times of crisis?
These are all great questions that will surely be sorted out in the days to come, but one thing is clear from Wall Street’s weekend meltdown: When the worst comes, workers need to have their own crisis plans in place. No matter what business you may be in, your managers and executives are probably going to be too preoccupied to worry much about the fate of those who toil around them.
If we learned anything from watching 16 days of Summer Olympics in Beijing, it’s this (somewhat reductionist) statement: The Chinese have been around for a long time and have invented lots of important stuff. Take the philosophy of yin and yang, which says that there are connections in the world that create two mutually correlated opposites. Think hot and cold, smart and dumb, procedural and strategic, Meryl Streep and Lindsay Lohan.
I’m not sure I can define the opposite of employee engagement, but I know it when I see it. Today I see it in the stories about the workforce at troubled financial services firm Lehman Brothers.
Lehman, to put it mildly, is melting down. The venerable Wall Street firm was founded in 1850 and says that its mission is “defined by our unwavering commitment to our clients, our shareholders and each other.” But it’s clearly wavering. The credit and banking crisis has driven its stock price from $16 a share last week to around $4 today. Lehman seems to be following in the footsteps of Bear Stearns, and according to The New York Times, workers are struggling to deal with the notion that Lehman as it currently exists may not be long for this world.
“Everyone is walking around like they have just been Tasered,” said one Lehman employee, who, like many interviewed for an article in The New York Times , declined to be named because he was not authorized to talk publicly. “Everyone was always hoping we would pull through. Now, that is not really an option.”
And here’s how the yang of employee engagement looks, as described by the Times: “On Lehman’s third- and fourth-floor trading floors overlooking Broadway’s lights in Midtown Manhattan, traders continued working at their terminals, or at least were giving the appearance of doing so. At the same time, many polished their résumés and contacted recruiters.”
There’s also an object lesson here that you’ve heard before but bears repeating: Don’t invest too much of your future in your company’s stock. “[One] employee who left Lehman earlier this year lamented that he had put enough faith in the firm to retain shares—a decision he is paying for,” the Times noted. He told the Times simply: “My children’s education fund is wiped out.”
Employee engagement? There’s none of that today at Lehman Brothers, only shock, fear, some loathing and surely the clear understanding that no matter how committed you are to the company and its culture, once things go bad, none of that really matters anymore. When a company melts down, everyone in the workforce gets cooked with it.
It’s a tough concept to get your head around, at least from my perspective, mainly because it is so difficult to define and measure. I’m also skeptical of a lot of the surveys and studies pertaining to engagement because I’m not always sure of what they are measuring. Here is one that seems to be able to get past that issue by comparing engagement across generations and age groups.
According to the survey, you can summarize employee engagement with these four primary principles, or drivers, that show that workers are engaged by:
• Leaders who inspire confidence in the future.
• Managers who respect and appreciate their employees.
• Exciting work that employees know how to do.
• Employers who display a genuine responsibility to employees and communities.
Kenexa has also come up with the Kenexa Employee Engagement Index, which comprises “four key components—pride, satisfaction, advocacy and retention,” according to a Kenexa press release. “Employee engagement, therefore, is not strictly happiness, excitement or the willingness to work long hours. Engaged employees align with their organization’s goals and are personally vested in the outcomes.”
This employee engagement index, or EEI, is “57 percent across all surveyed countries … [and the] EEI score for India, the top-ranked country, is almost twice that of Japan’s, the lowest-ranked country,” according to Kenexa. There’s also this additional bit of perspective: “In general, EEI scores for North American employees are higher than EEI scores for European workers—the Netherlands is the exception. Outside of India, other Asian and Middle Eastern countries score lower on the EEI. As economies strengthen in other low-ranking countries like Russia and China, EEI scores could increase in future surveys.”
“Organizations can make changes to align with these critical drivers,” says Jack Wiley, executive director at the Kenexa Research Institute. “Doing so makes good business sense because it not only improves employee engagement but also drives higher quality and customer satisfaction, revenue growth, and the company’s profitability. Time and time again we see that an engaged workforce delivers superior business results.”
It’s hard to dig into this survey, since you need to jump through a few online hoops to actually buy it, but many of the findings that Kenexa touts in the press release are not exactly breakthroughs. For example, “according to the WorkTrends data, if employees are confident in their senior leaders and the future of their employer, their EEI scores are four to five times higher than those of employees who lack this confidence. Confidence levels correlate with fast-growing economies—India, Mexico and Australia all have experienced recent economic growth and their employee engagement index scores are among the highest.”
It’s not a news flash that employees who are confident in their organization’s senior leadership and future are a lot more engaged, but the interesting thing to me is how much more engaged they are. If you can find a way to turn that into a greater ROI, you have something tangible. That might help take employee engagement out of the shadows as some hard-to-figure measure, and instead make it a real, honest-to-God business metric that managers can comfortably use and understand.
Back in 2006, we published a Workforce Management article that squarely focused on the job-related perils of social networking. “Web sites such as MySpace.com and Facebook can contain details about candidates that make employers think twice about hiring them,” staff writer Ed Frauenheim wrote. “The Web pages people create there sometimes include racy photos and videos, images of drinking or other compromising information.”
I’ve always been worried about having too much personal information online. Although I use LinkedIn—and that’s probably due to my age —I’m not into some of the larger social networking sites like MySpace or Facebook. And as beneficial as I find LinkedIn, I also know I need to be careful about how much detail about myself I want on the Internet for everyone to see.
You may not worry about such things, or you may share my concerns, but either way, a new nationwide survey of employers by CareerBuilder.com should make you think again about the uses of social networking. According to the survey, 22 percent of hiring managers are using social networking sites to research job candidates, up from 11 percent in 2006. In addition, 9 percent of hiring professionals say that although they aren’t currently using social networking sites to screen employees, they plan to start doing so. In other words, almost a third of recruiting and staffing professionals are using or plan to use social networking sites to check up on potential hires.
And, there’s more to the CareerBuilder survey that hiring managers revealed:
• Some 40 percent of candidates posted inappropriate or provocative information about themselves on their social networking site.
• Nearly 30 percent revealed they had poor communication skills.
• Some 28 percent bad-mouthed their previous company or a fellow employee, while 27 percent lied about their qualifications.
• About 20 percent shared confidential information from a previous employer or linked themselves to criminal behavior.
That’s the bad news, but there are some positives that hiring managers reported as well:
• Nearly 50 percent found that a candidate’s background supported their qualifications for the job.
• Forty percent said that the candidate was a good fit for the company’s culture.
• Some 36 percent said that a candidate’s site presented a professional image.
• Twenty-four percent said the candidate’s profile was creative.
Yes, there are pluses to social networking, but also some perils for job seekers. And, it goes back to something I used to tell first-time computer users years ago: Always be careful what you write and post online, because no matter what it is, the last person you want to see it is likely to find it at the most inopportune time.
HSM, a company that puts on interesting conferences like the World Business Forum, has been branching out into more personal events called “intensive seminars.” These are events where you can spend a day or two in a smallish group (100 people or so) listening to and rubbing shoulders with people like Jack Welch and Tom Peters for anywhere from $4,500 to $10,000.
I’ve always questioned the value of pricey programs like these because I don’t know how much more someone like Jack Welch is going to tell you in a group of 100 people that you just can’t get from reading his books or reading (or listening to the podcast of) his BusinessWeek column. But despite my skepticism over the cost-benefit ratio of these “intensive seminars,” I don’t doubt for a moment the quality of speakers like Welch and Peters, because they have long records of notable accomplishment.
HSM wanted nearly $5,000 per person for a one-day session with the former Disney CEO where participants “will have the opportunity to work with one of the world’s most creative icons on how to successfully foster creativity and implement innovation in your organization.”
I don’t believe anyone can read DisneyWar and not come away wondering how Eisner kept his job running Disney for as long as he did. Forget his unbridled ego and over-the-top narcissism; what shocked me were the way he ran through executives and subordinates, his total disregard for people and talent, and his terrible decision-making skills. This was a man who sold off all the rights to the Disney-produced hit The Sixth Sense with Bruce Willis; who passed on TV staples like CSI and Survivor; who belittled Lost even as it garnered great ratings on Disney-owned ABC.
= Member Only
