Transparency and Openness are key drivers of Employee Engagement

This is a draft excerpt from the upcoming book, What’s Your Green Goldfish? Beyond Dollars: 15 Ways to Create Employee Loyalty and Reinforce Culture

The second INCH (cont’d)

The second inch on the 9 INCH journey to the heart of your employees involves Transparency and Openness.

I recently watched a video from Dave Hitz of NetApp on what it takes to become a great workplace. He broke down 3 ways to achieve greatness: 1. Like the people you work with, 2. Do work that is meaningful and 3. Trust the management. Keying on #3, it begs the question, “How do you build trust?” Let’s look for guidance from India’s HCL Technologies and Brazil’s Semco.

Vineet Nayar, CEO of HCL Technologies touched on Trust in his bestselling book, Employees First, Customers Second. He outlines four ways that “Transparency builds Trust”:

1. Transparency ensures that every stakeholder knows the company’s vision and understand how their contribution assist the organization in achieving its goals. Working in a environment without transparency is like trying to solve a jigsaw puzzle without knowing what the finished picture is supposed to look like.
2. It ensures that every stakeholder has a deep personal commitment to the aims of the organization.
3. Gen Y members expect transparency is a given. They post their life stories in public domains; they expect nothing less in their workplaces.
4. In a knowledge economy, we want customers to be transparent with us, to share their ideas, their vision and their strategies for solving core problems. Why would customers be transparent with us if we don’t trust employees enough to be transparent with them.

The Theory of the Amsterdam Window

Vineet uses an analogy in his book of the Amsterdam Window. Having previously lived on the Herengracht (“Gentleman’s Canal”) in Amsterdam, I can attest that the windows are immense. They are a throwback to the modest Calvinist period when subtle expressions of wealth, such as being able to afford to pay the highest window tax, were favored by the rich. In the words of writer Joanna Tweedy, “Today, the centuries-old glass, beautifully imperfect, frames the olive-green waters outside and lets natural light, and the eyes of curious tourists, pour in.”

While visiting Amsterdam, Vineet asked his friend, “Why so large?” The friend mentioned all the obvious reasons like letting in light and enjoying the view of the canal, but then offered a much more interesting answer… “It keeps the house clean.” It turns out that the bigger your windows, the more glass you have, the more visible your dirt will be – to you and to everyone who visits or passes by. In Vineet’s words,

If you can see the dirt, you will be much more likely to get rid of it. A transparent house has a dramatic effect on the culture inside.

Opening the Window of Information at HCL

HCL (#809) put together an online forum for employees called U&I. Employees could ask any question to the senior team at HCL Technologies. It was an open site where everyone could see the question, the questioner, and the answer. Employees responded favorably as noted by this comment,

This is the biggest change we have seen at HCL in years. Now we have a management team that is willing to acknowledge the dirt.”

Transparency at Grupo Semco

Brazil’s Semco is a great example of a democratic open environment with minimal hierarchy. The group of companies is headed by Ricardo Semler. According to British management guru Charles Handy, “The way he works — letting his employees choose what they do, where and when they do it, and even how they get paid — is too upside-down for most managers.

The company operates as an open book. In Semler’s words,

Semco has no official structure. It has no organizational chart. There’s no business plan or company strategy, no two-year or five-year plan, no goal or mission statement, no long-term budget. The company often does not have a fixed CEO. There are no vice presidents or chief officers for information technology or operations. There are no standards or practices. There’s no human resources department. There are no career plans, no job descriptions or employee contracts. No one approves reports or expense accounts. Supervision or monitoring of workers is rare indeed… Most important, success is not measured only in profit and growth.”

Semco has a whole school of green goldfish. Here are some examples:

• All employees, including union members, have full access to all financials (#341). Access is one thing, understanding is another. To educate its employees, Semco has even created cartoons to help explain the financial data.
• Up and Down Pay (#785). Semco’s employees going through a phase in which they would rather work less and lower their pay accordingly, the company does its best to adapt.
• Employees at Semco dictate their own salary (#340). Twice a year they are given the chance to set their compensation structure.
• Semco’s employees have the flexibility to set their own hours (#834).
• Semco believes that it is important to meet people interested in working with it, even if this interest is not immediate or there are no current opportunities. This led them to create the program – Date Semco (#195). Good for prospective employees and current ones. Each get to determine whether the fit is right.
• Employees are not allowed to sit in the same place two days in a row (#462). This encourages collaboration and eliminates the need for managers to track time spent by employees at their desk.

Let’s look at another Baker’s Dozen of companies that go the extra mile to be open and transparent.

Open by Design

A visionary corporation, W.L. Gore (#46) is built from a blueprint that its founder refers to as a “lattice” (as opposed to a “ladder”). There is no visible hierarchy at Gore — and no job titles. In fact, there are no bosses. Instead, there are leaders who achieve their positions by gaining followers. Business goals are established by consensus. Gore’s internal “structure” was put into place in 1958 by cofounder Bill Gore, an ex-DuPont exec who believed that leaders should be chosen by the people who follow them. (Source: Fast Company)

If you join Marina Maher Communications (#749), don’t expect a title on your business card. “In our 28-and-a-half years, we’ve never put titles on business cards,” said Maree Prendergast, managing director-human resources and talent. “We always thought that limits people.” In fact, its philosophy is “good ideas come from everywhere,” said Marina Maher, founder of the PR agency. (Source: AdAge.com)

Rule #1 of 5 Core Values: Open Company, No Bullshit. Atlassian (#47) embraces transparency wherever at all practical, and sometimes where impractical. All information, both internal and external, is public by default. “We are not afraid of being honest with ourselves, our staff and our customers.” (Source: Atlassian.com)

Feedback Plus (#59) has an open ledger policy for employees. They can read the company’s financial statements any time they wish. Their compensation is based upon their work team’s and company’s performance vs. the annual goals and action plans they’ve collectively developed. Of course it may not be feasible for every company to have an open ledger policy, but it is important that, whatever the size of the organization, each employee knows where they are going and how they’re supposed to get there. (Source: CareerCast.com)

Employees at Catalyst Studios (#288) say Founder Jason Rysavy’s focus on finding like-minded colleagues and challenging work is what makes the firm a fun place to work. “My job and the job of the leadership here is to make sure the projects we’re bringing in are satisfying for people to work on.” The firm looks for challenging, unique projects in need of solutions, Rysavy said. “We tend to get these bastard-child projects that no one knows how to deal with, and we help figure it out.” Over time, the firm has learned to turn down work that won’t excite the agency’s passionate problem-solvers. “The more you say no to the stuff that is clearly not a good fit for the people we have, the more the good stuff comes along,” Rysavy said. “We made a lot of money early on, but we did a lot of stuff that didn’t get us anywhere.” Delivering a product that clients and users can enjoy and that was satisfying to build is a reward beyond the “smoke and mirrors” that other agencies use to keep their employees happy, Creative Director Bryce Howitson said. (Source: Minneapolis / St. Paul Business Journal)

Talent Plus + (#799) holds monthly business update meetings. Management shares financials with all employees in the spirit of transparency.

“Customer First News,” an audio webcast that provides Symantec (#806) employees with updates on their NPS performance, actions being taken to address performance gaps and business results achieved. Symantec engages employees across the business in delivering this message, showing that customer experience is owned by every employee. (Source: Satmetrix.com)

An Open Door

At Flour Bakery + Cafe (#136), none of the bakery manager offices have doors, and all have anonymous suggestion boxes. “We try to create all sorts of ways to get feedback from the staff,” says General Manager Aaron Constable. (Source: boston.com)

Rand Corporation (#208) offers an open door policy at all levels of the organization. Anyone can make an appointment to meet with the CEO, Executive VP or any of the other VP staff. The company leadership host small group lunch meetings with open Q&A as well as coffee get togethers for office quadrants for open Q&A. (Source: Los Angeles Business Journal)

Openness One Step at a Time

AnswerLab’s (#510) CEO schedules Walk & Talks with every employee. These one-on-one check-ins provide employees with an individual opportunity to share any concerns or brilliant ideas they have with the CEO directly. Why it’s great: Combining wellness with one-on-ones helps achieve two important objectives simultaneously. Meeting outside the office and getting physical helps eliminate the nerves and intimidation employees might normally experience when connecting with higher-ups. (Source: GreatPlaceToWork.com)

Team One (#748) has a “management by walking” practice and team camaraderie help maintain the culture at the communications company. (Source: AdAge.com)

Doug Conant, former CEO of Campbell Soup Company (#248) took purposeful steps to being visible and promotion good health at Campbell’s. Ten thousand steps per day to be exact in order to stay connected to employees. (Source: HBR)

Everyone at the Max Borges Agency (#714) has the ability to discuss anything with anyone at the agency, where its “do not knock” policy is taken seriously. Taking that one step further, the company recently sponsored a four week in-office communications course that was taught during regular business hours. It was based on a book titled “People Styles At Work,” and its purpose was to enhance everyone’s ability to effectively communicate with co-workers, clients and family. (Source: PR News Online)

Overtime Extra

The DRP Group (#433) recognizes long hours working on videos, events, print and digital productions. “If the client pays for overtime, the team member will get 50% of what is charged,” it has ruled, allowing some staff to make 30% extra. (Source: The Sunday Times)

Open and Secure

“National Instruments (#763) puts their employees first. When other employers lay off in droves, NI hangs on, relying on cash they have consistently put away for the inevitable economic recession.” – National Instruments Digital Hardware Engineer. (Source: Glassdoor)

David Martin Agency (#298) “We are different from other companies in our industry as we are salaried. By removing the commission-based compensation usually found in this industry, it allows all of us to enjoy the success of the individual performances. We celebrate our successes by announcing company-wide. We share financial bonuses across all employees. Our philosophy is that sharing successes make our jobs even better!” (Source: Minneapolis / St. Paul Business Journal)

Standing Up for Employees

Bad customers beware. ING Direct (#38) stands up to protect their employees. The bank has an operating strategy based on a strong, effective culture is selective of prospective customers. It also requires the periodic “firing” of customers, as pointed out in our examples of companies like ING Direct, where thousands are fired every month. This strategy is especially important when customers “abuse” employees or make unreasonable demands on them. (Source: Earl Sasser and James Heskett)

The rapidly growing Belvedere Trading (#165) gives both traders and its information technology staff opportunities to share ideas and take on new roles. “We want for every employee to feel an ownership in the firm, that they’re going to have an impact on what we do,” says Thomas Hutchinson, Belvedere Trading’s president. It’s a flat structure,” he adds. “No matter where they come from, ideas are taken with a serious attitude.” Reflecting that flat structure, everyone in the firm, including interns, receives a bonus twice a year, which ranges from 5% to 200% of the employee’s salary. (Source: Chicago Real Estate Daily)

Keeping It on the Level

Hilcorp’s (#368) annual bonus is universal. There is a single set of targets and every employee is rewarded with the same percentage of his or her salary. The company shells out a maximum 60 percent bonus each year and has averaged 35 percent during the past five years. (Source: The Houston Chronicle)

If Integrated Project Management Company (#547) exceeds its monthly profit targets, all employees receive the same bonus amount, regardless of position.

Making Employees Owners

“Publix (#91) is an extraordinary company to work for. I’ve been here 36 years, my husband has been with Publix for 38 years, and my children have worked here as well. We love it because the people are warm and friendly, like our extended family; and because we own a part of the company. Mr. George, our founder, cared enough about associates to make all of us part owners.” (Source: Publix.com)

Wenck Associates (#312) is a 100 percent ESOP-owned company, backed by robust contributions to the plan and has enjoyed healthy growth to the value of the company stock. The ESOP program and contributions provided are differentiators that helps attract and retain members. From a financial performance standpoint, we have an open book policy and share financial information with employees monthly and at events throughout the year. Wenck provides a “self-directed training account” program, which allows employees to obtain additional development and training throughout the year to further their education and chase their dreams. There are many opportunities to grow, to be flexible, to have a balanced life and the result is, employees turning around and doing great things. (Source: Minneapolis / St. Paul Business Journal)

Shares went to all 82 staff at Mount Anvil (#408), allocated according to length of service, starting at £5,000. For Killian Hurley, the chief executive and co-founder, it was “the right thing to do”. “There are lots of good companies, but we want to be excellent and to do that, you need engaged, positive people delivering excellent customer service. The share incentive is one of the little steps we can control; we are delighted to do it.” (Source: The Sunday Times)

THE EGALITARIAN ETHOS of this wholly employee-owned architecture practice Make (#424) is reflected in an annual profit share for all 111 staff. Everyone is a partner, and all feel fairly treated. It stands to reason that as owners, the staff insist on equitable pay. (Source: The Sunday Times)

Today’s Lagniappe (a little something extra thrown in for good measure) – Semco has an interesting program. You don’t need to wait until you’re old to enjoy your retirement. The idea is that you can take advantage of it once a week, from any age. The “Retire a little bit” project (#190) was created based on a life-cycle analysis. In any analysis that we undertake, we will see that we have money when we don’t have time to enjoy it, time when we no longer have financial certainty and the ability to enjoy nature and sports when we no longer have the health to do so. The program allows the person to do what they plan to do when they retire, once a week, like an art course, play sports in the afternoon or simply spend the day with their kids. The employee will have the option to not work one day a week, replacing this day in the future, after they retire, with a proportional salary. (Source: Semco.com)

Here’s a YouTube interview with Semco’s CEO Ricardo Semler:

All of the examples in this post were taken from the Green Goldfish Project. The Project is a quest to find 1,001 examples of marketing lagniappe for employees. Green goldfish are the little signature extras given to employees. They help differentiate a company, reinforce culture, increase retention and drive positive WoM. The book, “What’s Your Green Goldfish?” will be published on March 29, 2013.