Talk Among Yourselves

Assessing a company’s fitness by profitiability alone has been likened to driving forward using only the rear-view mirror. Financial measures tell senior executives a great deal about past performance but reveal less about the ability to succeed in the future.

Management reporting systems tend to emphasise the achievement of short-term financial targets. This explains why, when a company experiences a sudden drop in profits, even senior managers are often taken by surprise. Yet more often than not the factors that have contributed to the company’s plight – such as lack of management development, procedures that stifle initiative, or functions that are poorly integrated – have been apparent to employees lower down the responsibility chain for many years.

Often the first response of a board that has run into difficulties is to call in help from outside. But while management consultants may boast an array of skills, they lack personal experience of the client’s culture and an accurate grasp of what happens on the ground. As a consequence, the reports that highly paid professionals produce sometimes contain recommendations that are theoretically well-founded, but not specific enough to be of practical benefit.

To capitalise on their analytical strengths, external consultants need access to the insight that people working within the organisation possess. One way to achieve this knowledge transfer is to use market research techniques to encourage employees to make their views known.

Employees who deal with the public know full well when a company is letting its customers down. Blue Sky Consulting managing consultant Elke Anderson says: “It’s the frontline people who see that customers are not benefiting from expensive technologies because the users haven’t been trained, or because the company is still using processes that were invented 14 years before.” However, if the same employees were given carte blanche to express their opinions about why the organisation is failing, they might lack the words – or not trust their employers sufficiently – to communicate the full force of their observations.

Research professionals have developed a battery of tools for overcoming the anxieties that inhibit people from voicing their inner thoughts. In a business setting, these approaches can encourage employees to disclose difficulties to an external observer that they would never normally discuss with their managers.

Techniques that allow participants to project their views onto a third party are useful tactics to deploy when employees and management are failing to communicate effectively. An example of this is a study that the SF Group conducted for a high street bank, which was running an ill-conceived programme to involve customers in interviews with bank employees.

SF Group managing director Susie Fisher, who is also a spokeswoman for the Association for Qualitative Research, says: “The customer service people knew that the project had no appeal for their clients, but they were not feeding this back to the programme designers. The turning point came when we gave them a cartoon strip and asked them to describe what the customers in the picture were thinking.”

Cultural studies

Oblique research methods like this can also be used to give senior managers insight into the negative aspects of workplace culture, such as the incidence of racial or sexual prejudice. Another technique that works well is to ask an employee to adopt the persona of a senior or junior colleague and say what they think is going through the person’s mind. When deployed effectively, this approach enables companies to become better focused by highlighting sources of misunderstanding that could otherwise result in a loss of strategic clarity.

Charles Fair, a consultant at international HR consultancy Watson Wyatt Partners, says: “A lot of problems boil down to interpretation and emphasis. When you dig below the surface, it’s not uncommon to discover that quite fundamental concepts – such as willingness to take risks, or employee empowerment – mean one thing to the chief executive and something else to the senior management team.”

While large organisations will go to great lengths to find out whether their culture supports the chief executive’s vision, smaller companies rarely engage in internal research. In the start-up phase, this is not a problem because everyone is pulling in the same direction. However, as the payroll expands this sense of community tends to recede.

Carlson Marketing Group director of employee strategies Mark Norquist says: “What often happens is that companies start to recruit people who are younger and better qualified than the middle managers to whom they report.”

It is at this point, Norquist argues, that smaller companies should undertake some basic internal research to identify sources of tension. He says: “The critical information that you want to get is whether people feel empowered, whether they trust their managers and co-workers and whether they feel that they have the potential to advance their careers.”

Worth the candle

Good research does not come cheap, but with careful management it can be affordable, even for small companies. One option is to employ a small agency, rather than one of the major consultancies which charge considerably higher fees. Nevertheless, the key requirement for companies – irrespective of size – is not to minimise cost, but to maximise the payback from research by focusing on the factors that drive profitability.

MORI head of HR practice Susan Walker illustrates how many companies waste their resources by struggling to achieve internal targets that are commercially irrelevant: “We asked a group of engineers and their customers what they considered to be the most important service priority. The engineers said getting a proposal back to the customer as quickly as possible. But the customers said that what they valued was a thoughtful response.”

Situations such as this arise when companies fail to integrate their internal and external research programmes. This even happens in companies that claim to be “customer-centric”. This is because marketers own the customer data, HR conducts employee research, and operational managers track internal performance measures. Fair says: “Companies need to listen to what their customer data is telling them and operate research that extends across the business.”

Companies that integrate their research acquire a better understanding of how cultural factors, such as employee motivation, empowerment and management style, correlate with customer satisfaction and business success. Ideally the research needs to be conducted at branch and team level, so that the groups and individuals who excel can be identified.

When external and internal performance indicators are compared routinely, the company can begin to spot the characteristics that distinguish high-achieving employees from their peers, and learn more about the factors that motivate such people. This, in turn, provides guidance on the attitudes and personal qualities that the organisation should nurture through its recruitment and employee development programmes.

Act on the information

Internal research is only of benefit if the learning that it generates leads to changes in behaviour. The difficulty here is that, while enlightened employers have taken on board the need to consult, the process of consultation allows the research participant to assume a passive role. This encourages employees involved in internal research to think like critics and to look to senior colleagues to bring about change, instead of pushing them to identify the improvements that they themselves could make. To overcome this deficiency, argues Walker, companies need to go beyond listening and involve employees in designing and implementing solutions.

This shift towards a model in which employees and line managers use research to disentangle and resolve organisational problems will also require researchers to become less passive. One trend, which many research professionals expect to see, is the wider use of employee group discussions as a follow-up to the initial analysis.

Charles Fair illustrates the benefit that this could bring by referring to a project undertaken for a consumer electronics company. In this instance, directors were concerned that the company’s ability to innovate was being impeded by the failure of its national subsidiaries to share information with each other.

In the first phase of the project, Watson Wyatt talked to employees to try to find out why information was not being shared. In the second phase the consultants helped the company run a series of two-day conferences that brought employees together from across the company. This led to the creation of several informal collaborative networks, providing the basis for sustained information sharing.

When companies fail to satisfy their customers, or to match their competitors, it is usually on account of weaknesses such as poor management skills, lack of employee development, or inter-departmental rivalry. All these failings originate deep within the organisation’s structure or culture, and they are often apparent to many within the business. However, to be of value this knowledge has to be brought together and combined with what is known about customers from external research.

When this is done in a structured way, the links between, for instance, an authoritarian management style and a lack of product innovation, or an unresponsive service culture and inflexible work procedures become obvious. What is then needed is to support and provide incentives for people at all levels of the business to work out and enact the changes that their own insights suggest.