By Alyssa Hurst
Employee empowerment takes on a whole new meaning for Marc Stoffel, CEO of Germany-based Haufe-umantis AG. In 2013, Haufe’s 260 employees voted anonymously from their laptops to choose Stoffel as the company’s CEO for the next year. Since then, elections have taken place on an annual basis. Employees have a say in who holds each senior leadership position, as well as major initiatives within the company. While the degree of employee empowerment at Haufe-umantis is unusual, shifting demographics, technology-enabled transparency and a fierce battle for talent have led to a significant power shift in the workplace. As employees find their voices, experts say employers must listen.
A new generation’s demands
“Empowerment is really very powerful in the minds of employees, and it’s particularly impactful for the millennial generation,” says Alan Kaplan, founder and CEO of Kaplan Partners. “That generation has grown up with a different kind of self-worth and a desire to contribute, versus growing up in the more hierarchical world that their parents grew up in.”
It’s this generation that is driving a shift toward empowerment in the workplace, say Kaplan and Susan Hahn, founder and president of Swan Consulting Group Inc. “You’re getting to know not just what [employees] are doing, but how they are thinking and who they are as human beings. That’s another really big part, and another thing millennials really want,” says Hahn. “They want to have fun.”
But empowering employees isn’t just about making sure they feel warm and fuzzy at work. Ultimately, it’s about talent — retention, attraction and development. “If you want to not just attract, but keep millennials and high performers in general, you have to have a mindset that’s more empowering, that enables your up-and-coming talent to take on more responsibility. This generation wants to get stuff done. They want to do good work. They don’t want to be babysat. Give me meaningful stuff, help me learn, help me grow,” says Kaplan.
Of course, tech-savvy millennials are able to factor company culture into their employment decisions, thanks to websites like Glassdoor, which allows employees to read reviews from former or current employees of a company before even submitting a resume. “If you’re going to work for some company, you’re going to talk to your friends that might work there, you’re going to go on Glassdoor and other places to see what people who work there are saying,” says Kaplan. “My generation would eventually get around to referencing that employer, but the first place they go wouldn’t be to leverage social media.”
Social media has created a strong ripple in the talent pool in other ways too, as job seekers see their social feeds filled with stories of workplaces that go above and beyond for employees. “I think once you start having examples of companies where employees have a voice and a stake in the outcome, it becomes contagious,” says Ada Jo Mann, co-founder and president of Innovation Partners International. “It’s one of those things where there is no going back.”
Mann says empowering employees can also have a real influence on a company’s interactions with customers, which ultimately affects overall performance: “When there is a culture of appreciation and inclusion, it spills out into the relationship you have with your customers, and they can tell. They are appreciative of it,” she says. “The organizations I’ve worked with see that sea change in culture, and the effects of that are seen across the board in employee satisfaction, in customer satisfaction and in the bottom line.”
Kaplan agrees: “Better-run companies see the close linkage between business capital strategies and human capital strategies. If you want to be successful in an organization, they have to be aligned.”
Implementing effective empowerment
That doesn’t mean all CEOs should start planning campaign rallies for CEO Election 2017. In fact, employee empowerment is a concept with hundreds of definitions that can play out differently in each company. While one company may decide that democratic elections are a meaningful way to engage employees, another may opt for monthly town hall meetings, and another still may decide that continuous feedback is the way to go.
The key, says Hahn, is to focus on trust and engagement. With trust in place, she says, leaders can feel confident that they’re doling out power to employees who fundamentally get the company’s mission, vision and values.
Once the right employees are in place, Kaplan says, “it’s really about giving employees the ability and the opportunity to make decisions and solve problems for their constituents, customers and peers … as opposed to everything having to flow through the chain of command.” And, when you give employees the power to make decisions and get things done, Hahn says “you have to be okay if they fall down. … There is some level of risk allowance.”
According to Hahn, the most important and successful method of empowering employees is “A&L,” or asking and listening. “The most important thing is that [employees] know they are being listened to,” she says. “If the CEO or leadership is pondering input, [employees] should know that. If a decision is made to take the input, [employees] should know that. … All of that leads to a sense of ‘I’ll keep thinking and I’ll keep submitting my thoughts and ideas.’ Even if they are not going to go with your idea, they listened.”
One of the greatest tools for empowerment, says Hahn, is recognition. “I think a lot of organizations don’t realize how far a pat on the back — the ‘Yay! Way to go!’ — can go for your individuals, your small groups, your teams, your divisions,” she says. “That can go further in terms of maintaining motivation, drive, desire for feedback and favorable impressions. It’s not always about the money.”
For Mann, empowerment starts with the strengths-based approach to change that she teaches, Appreciative Inquiry (AI). The AI process often culminates in what is called the AI Summit. During the summit, the company’s stakeholders, including customers, employees and leaders, get together to create a way forward. “You have upper-level managers working in teams with junior staff, and everyone’s voice is equal. Once you start a dialog across an organization, there’s no going back,” says Mann. “When you open up the conversations to all voices, people feel quite empowered and have much more of a stake in the success of the enterprise than they do when they just come to work and do their job.”
Middle management plays a major role in the way empowerment is implemented, and whether it is successful, says Kaplan. “I think the weak link in empowering employees or providing an enhanced level of freedom in terms of work structure [is often] the supervisor, the middle manager, who either isn’t well trained in how to manage people in a different kind of organizational structure, or comes from a place in their background where they are just not good at it,” he says. The solution, according to Kaplan, is training. With the proper training, managers can set the right expectations and make sure that, even in an empowered setting, there are appropriate boundaries to ensure performance.
It starts at the top
Though the idea of employee empowerment isn’t new, in some ways, it is becoming the new normal. “It’s not a new concept, but it’s becoming table stakes. If you’re not focusing on empowerment and culture, it doesn’t mean you can’t be successful, but it may mean that in some areas, you may have more challenges,” says Kaplan.
This new normal is driven by a changing workplace demographic, says Hahn, but not in the way we have come to think of it. Not only are millennials moving in, but baby boomers, who often make up company leadership and tend toward more hierarchical organizational structures, are moving out. That doesn’t mean baby boomers can’t make an impactful change in their organization. “It’s a willingness to step out of a comfort zone, no matter what our age is,” says Hahn.
Above all, successful employee empowerment takes a commitment from the company’s leadership, whatever generation they belong to. “Even though I, as a former Peace Corps volunteer, believe in grassroots movements, [employee empowerment] doesn’t really work as [one],” says Mann. “You really need to start at the top.”
She cites one example of a company that was working to implement organizational change without involving the CEO in the planning process. “Once it got to a place where the organization had designed a roadmap for change, suddenly the CEO got freaked out because he realized the power shift was happening without him, and he shut down the process,” says Mann.
“You can’t effect meaningful change … without leadership from the top and without people seeing the CEO and senior team modeling the kind of behaviors and thinking they want to inculcate through the organization,” says Kaplan.
We asked CEOs how they empower their employees, why it’s important to them, and what the payoff has been.
Honest Tea, Inc.
Employees have a sense that their actions have an impact, and they have control over the choices they get to make. They are not an automaton. They are not just following orders. The key to that is that when they succeed, they benefit directly from that success. The last part of it is that they have to have transparency and a line of sight to understand those results. What we have done is create a model where salespeople have their own [profit and loss statement]. The beauty of that is that when it comes time to look at bonuses, they know exactly where they stand. They control the levers. They are empowered to take a risk, and if the risk fails, they don’t benefit.
Founder and CEO
In the jobs I held before I started Imagine, one of the biggest problems I noticed was the lack of ability for employees to make a real change in their organization. They go to work, are told what to do and are not given any type of opportunity to introduce better ways of doing things. From the beginning of our company, I wanted to make sure that the type of “that’s the way we’ve always done it” behavior is never an issue here. Upon hiring and throughout their time at Imagine, I let the team know that, while I may have to make final decisions, I certainly do not know everything. I rely on each member of our team for their perspective on the way we move forward, and it’s that open line of communication that allows them to be free with their ideas.
Corporate Advisory Solutions, LLC
My partner and I take the approach of over-communication. In a small company, it is critical that people feel as if they are not being micromanaged, and that they are able to perform their duties with flexibility. … They want to feel like if they need to work from home or if they need to define deadlines, they have the ability to push back. Instead of us as the employer saying “no, no, no,” we try to have constructive discussions about it to get them motivated. … I feel like as we have been allowing our team to drive things rather than us dictating things, I’ve seen more responsiveness, more communication and more openness about issues that they are having.
Expert Technology Associates
It might sound routine and mundane, but our meetings are truly collaborative. People are popping up with ideas and being recognized for that. … The encouragement for that behavior to continue all the time is, what did we do with it — did we show we listened, did we follow up, did we make something happen or at least conclude? Taking action is what leads [employees] to continue to offer up their thoughts. It’s the kind of place I want to be a part of. … The truth of it is, if you hire the right people, they want to make decisions and they want to be trusted thinkers in the organization. You just have to give them the playbook — here’s our direction and why.
International Chairman, Managing Director
Stanton Chase International
What we’ve tried to do is have less structure. … There is open communication and everyone knows that no matter who you are, the phone lines are open. … If someone comes to us with an initiative or an idea, we are so likely to say yes. … We have kept it more unstructured, with less process, and hopefully then, you get this groundswell. And when you have this history of saying yes, then people feel engaged and they feel empowered, and then they can be unleashed. There is a feeling that some of the best things come from the bottom, and that has led to a variety of things. It’s led to new service lines for us, new product lines, new solutions that we’ve taken to customers. It has improved some ways we do business internally, and the way we collaborate and the way we share.
One of the things we do that has worked out really well for us is “ROWE” — results-only work environment. You can work however you want, wherever you want, as long as you get your outcome done. That empowers [employees] to figure out how they do that. … It really provides teamwork and it empowers people. … Seven years ago, we lost our way, where we hired some people and there were some managers who weren’t good managers. There was more of a focus on production and revenue. We have a term in our office called energy vampires, and we had some people who were sucking the energy. So four years ago, we said, we are going to focus on culture, we are going to focus on how to make this a great place to work and we are going to focus on empowering our people.
ProSource360 Consulting Services Inc.
You empower the employee to use their creativity to perform, and not be pigeonholed into what one of their supervisors believes. It starts at the top. We talk about it because it doesn’t happen by accident. We talk about it with our HR department, our senior management and leadership. I started with an open-door policy. I don’t think people are afraid to talk to me about anything or to bring ideas. … One of the biggest things we’ve seen as far as returns has been repeat business. If you have happy employees, you often have happy clients. People who want to do the work, tend to do a better job, and our clients see it.
EVP of Strategy
We practice structured flexibility, which is a concept we borrowed from the military. There, they call it “Commander’s Intent.” It basically allows leadership to point to an objective and it empowers the team to figure out a way to accomplish that objective. There are a lot of reasons for this. The main reason is that a micromanaged workplace is not scalable. Micromanaging also sucks the life and creativity from the workplace and stifles innovation.