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Rethinking Employee Engagement from the Perspective of Psychological Development
Richard Barrett
Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
2
What is Employee Engagement?
Engaged employees are enthusiastic about their work and care about the success of the organisation.
A workplace approach designed to encourage the commitment of employees to the organisation’s goals and values.
Powerful metrics that enable leaders to measure and manage cultures.
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3
Why is Employee Engagement Important?
Engaged employees bring more of their discretionary energy to their work.
Organisation’s with high levels of employee
engagement outperform organisations with low
employee engagement by a significant margin.
Powerful metrics that enable leaders to measure and manage cultures.
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4
Employee Engagement and Performance
Organisations with highly engaged employees have 3.9 the earnings per share growth rate compared with organisation with low employee engagement—Gallup
Organisations with high employee engagement are 78% more productive and 40% more profitable that those with low employee engagement—AON Hewitt
Powerful metrics that enable leaders to measure and manage cultures.
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5
S&P 500
Average Annualized Return
16.39%
Average Annualized Return
4.12%
BCWF
The Best Companies to Work For engender high levels of employee engagement and commitment, because the leaders of these organisations focus on meeting their employee’s needs.
The Top 40 Best Companies to Work For (USA)
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6
What’s the Difference?
Caring creates happier customers, who buy more and refer more often, which drives sales, resulting
in increased income.
Engaged employees care about their organisations, are more productive, give better
service, and stay in their organisations longer.
Powerful metrics that enable leaders to measure and manage cultures.
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7
Employee Engagement and Cultural Entropy
Employee engagement is highly correlated with cultural entropy.
Cultural Entropy: A measure of the conflict, friction and frustration that people experience in their day-to-day
activities that prevents an organisation from achieving peak performance.
Powerful metrics that enable leaders to measure and manage cultures.
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8
25%
35%
45%
55%
65%
75%
85%
0% 5% 10% 15% 20% 25% 30%
Cultural Entropy
Emp
loye
eEn
gage
me
nt
Research carried out in 163 organisations in Australia by Hewitt Associates and the Barrett Values Centre in 2008.
Low Entropy = High Engagement
High Entropy = Low Engagement
Employee Engagement vs. Cultural Entropy
Powerful metrics that enable leaders to measure and manage cultures.
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9
Entropy and Engagement
Cultural Entropy Most employees are ….
10% or less Highly Engaged
11% to 20% Engaged
21% to 30% Becoming Disengaged
31% to 40% Disengaged
41% or more Highly Disengaged
Powerful metrics that enable leaders to measure and manage cultures.
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10
Cultural entropy is a function of the personal entropy of the current leaders and
institutional legacy of past leaders as embedded in the structures, systems,
policies and procedures of an organisation.
Where Does Cultural Entropy Come From?
Personal entropy is the amount of fear-driven energy that a person expresses in his or her day-to-day interactions with
other people.
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11
What is Personal Entropy?
Personal entropy shows up in potentially
limiting values such as:blame, jealousy, power-seeking, status-seeking, arrogance, demanding,
internal politics, etc.
Powerful metrics that enable leaders to measure and manage cultures.
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12
What is Institutional Legacy?
The institutional legacy contribution to cultural
entropy shows up as bureaucratic procedures, hierarchical structures,
silo functioning, etc.
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13
The values that are most important to us are a reflection of the needs of the stage of psychological development we are at and the unmet needs of the stages of psychological development we have passed through but have not yet mastered.
A Values-Based Approach to Identifying Employee Needs
Our needs (what we value) have always been, and always will be the principal drivers of our behaviors and actions.
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14
Richard Barrett has made extraordinary contributions to our understanding of organisational values and culture. His frame-works for measuring culture and enabling whole system change are elegant. His reservoir of know-ledge is vast and his connection to timeless wisdom is profound.
Raj Sisodia Co-founder and co-chairman of Conscious Capitalism Inc. and Professor of Marketing at Bentley University
Everything I am talking about is in this book
Powerful metrics that enable leaders to measure and manage cultures.
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15
Stages of Psychological Development
Stages Primary Motivations
Serving
Integrating
Self-actualising
Individuating
Differentiating
Conforming
Surviving Evo
luti
on
of
Pers
on
al C
on
scio
usn
ess
Satisfying your physiological and nutritional needs.
Satisfying your need for love, and belonging.
Satisfying your need for respect and recognition.
Satisfying your need for freedom and autonomy.
Satisfying your need to find meaning and purpose in life.
Satisfying your need to make a difference in the world.
Satisfying your need to lead a life of service to others.
Powerful metrics that enable leaders to measure and manage cultures.
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16
Stages of Psychological Development
Surviving
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Stages of Psychological Development
INFANCY 0-2 Years Old
Staying alive!
Satisfying physiological and nutritional needs
Surviving
Stage Motivation
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Stages of Psychological Development
Conforming
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Stages of Psychological Development
Conforming
Stage Motivation
CHILDHOOD 3-7 Years Old
Keeping safe and secure!
Satisfying need for love, and belonging.
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20
Stages of Psychological Development
Differentiating
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Stages of Psychological Development
Differentiating
Stage Motivation
TEENAGER8-19 Years Old
Distinguishing yourself
Satisfying need for respect and recognition.
Powerful metrics that enable leaders to measure and manage cultures.
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22
Stages of Psychological Development
Individuating
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23
Stages of Psychological Development
Individuating
Stage Motivation
YOUNG ADULT20-39 Years Old
Releasing your fears!
Satisfying need for freedom and autonomy.
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24
Stages of Psychological Development
Self-actualising
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Stages of Psychological Development
Self-actualising
Stage Motivation
ADULTHOOD40-49 Years Old
Becoming who you are!
Satisfying need to find meaning and purpose.
Powerful metrics that enable leaders to measure and manage cultures.
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26
Stages of Psychological Development
Integrating
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27
Stages of Psychological Development
Integrating
Stage Motivation
MATURE ADULT50-59 Years Old
Aligning with others!
Satisfying need to make a difference in the world.
Powerful metrics that enable leaders to measure and manage cultures.
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28
Stages of Psychological Development
Serving
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Stages of Psychological Development
Serving
Stage Motivation
SENIOR60+ Years Old
Finding fulfilment!
Satisfying your need to serve the greater good.
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30
Stages, Levels and World Views
We grow in stages of psychological development
We operate at levels of consciousness
We live inside (are embedded in) cultural world views
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31
Levels of Consciousness
All things being normal, the level of consciousness we operate from will
correspond to the stage of psychological development we have reached.
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Stages and Levels
Stages Levels of Consciousness
Serving SERVICE
Integrating MAKING A DIFFERENCE
Self-actualising INTERNAL COHESION
Individuating TRANSFORMATION
Differentiating SELF-ESTEEM
Conforming RELATIONSHIP
Surviving SURVIVAL Evo
luti
on
of
Pers
on
al C
on
scio
usn
ess
Powerful metrics that enable leaders to measure and manage cultures.
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33
What Employees Value
A safe working environment and pay and ben-efits that are sufficient to take care of family
Opportunities to work in a congenial atmos-phere where people care and respect each other
Opportunities to grow professionally with support, feedback and coaching
Opportunities and challenges by being made accountable for projects and processes
Opportunities for personal growth and develop-ment to support you in living your life purpose
Opportunities to leverage your contribution by collaborating with other like-minded individuals
Opportunities to serve others and care for the well-being of the Earth’s life support systems
Surviving
Relationship
Self-esteem
Transformation
Internal cohesion
Making a difference
Service
Levels of Consciousness
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34
Robert Kegan’s Types of Mind
Socialized Mind
Self-Authoring Mind
Self-Transforming Mind
Surviving
Relationship
Self-esteem
Transformation
Internal cohesion
Making a difference
Service
Levels of Consciousness
Powerful metrics that enable leaders to measure and manage cultures.
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35
Robert Kegan’s Types of Mind
Socialized MindFocused on meeting deficiency needs. Work is a job—a way of earning a living and caring for family. They may enjoy their work and colleagues, but are never passionate about what they do. Surviving
Relationship
Self-esteem
Levels of Consciousness
Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
36
Robert Kegan’s Types of Mind
Self-Authoring MindFocused on achievement and ambition. People operating with a self-authoring mind seek opportunities for advancement. They think of their work as career—a pathway to a better future.
Transformation
Internal cohesion
Levels of Consciousness
Powerful metrics that enable leaders to measure and manage cultures.
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37
Robert Kegan’s Types of Mind
Self-Transforming MindFocused on leading a values and purpose-driven life. People operating with a self-transforming mind see their work as a vocation. They want to leave a legacy and be of service to the world.
Making a difference
Service
Levels of Consciousness
Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
38
Building a Values-driven Organisation
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39
Building a Values-driven OrganisationStart with a Values-Survey
PERSONAL VALUESWhich of the following values and behaviours most reflect who you are? Pick ten.
CURRENT CULTUREWhich of the following values/behaviours most reflect how your organisation currently operates? Pick ten.
DESIRED CULTUREWhich of the following values/behaviours most reflect how you would like your organisation to operate? Pick ten.
Placement of Values by Level (100 employees)
Top Ten Values
1. tradition (L) (59)
2. diversity (54)
3. control (L) (53)
4. goals orientation (46)
5. knowledge (43)
6. creativity (42)
7. productivity (37)
8. image (L) (36)
9. profit (36)
10. open communication (31)
10
42 5
7
9
6
8
3
110
Current Culture
Service
Making a difference
Internal Cohesion
Transformation
Self-esteem
Relationship
Survival
11%
1
2
3
4
5
6
7
Cultural Entropy
Placement of Values by Level (100 employees)
Current Culture
Service
Making a difference
Internal Cohesion
Transformation
Self-esteem
Relationship
Survival
Highly Aligned Team of 16 People
commitment 12 5(I)
continuous improvement 10 4(O)
employee fulfilment 10 6(O)
balance (home/work) 9 4(O)
customer satisfaction 9 2(O)
making a difference 9 6(S)
financial stability 8 1(O)
humour/ fun 8 5(O)
teamwork 8 4(R)
accountability 9 4(R)
commitment 8 5(I)
continuous improvement 8 4(O)
employee fulfilment 8 6(O)
humour/ fun 8 5(O)
shared vision 8 5(O)
customer collaboration 7 6(O)
customer satisfaction 6 2(O)
financial stability 6 1(O)
teamwork 6 4(R)
Values Plot August 6, 2012Copyright 2012 Barrett Values Centre
I = IndividualR = Relationship
Black Underline = PV & CCOrange = PV, CC & DC
Orange = CC & DCBlue = PV & DC
P = PositiveL = Potentially Limiting (white circle)
O = OrganisationalS = Societal
Matches
PV - CC 4CC - DC 7PV - DC 1
Health Index(PL)
PV - 9-0CC - 9-0DC-10-0
making a difference 10 6(S)
family 9 2(R)
commitment 8 5(I)
humour/ fun 8 5(I)
balance (home/work) 6 4(I)
continuous learning 6 4(I)
integrity 6 5(I)
accountability 5 4(R)
creativity 5 5(I)
Level Personal Values (PV) Current Culture Values (CC) Desired Culture Values (DC)
7
6
5
4
3
2
1
IRS (P)=6-2-1 IRS (L)=0-0-0 IROS (P)=1-1-6-1 IROS (L)=0-0-0-0 IROS (P)=1-2-7-0 IROS (L)=0-0-0-0
Highly Aligned Team of 16 People
CTS = 53-22-25Entropy = 0%
CTS = 50-26-24
Entropy = 2%
Personal Values
CTS = 51-29-20
Entropy = 0%
Current Culture Values
Desired Culture Values
C
T
S 2
1
3
4
5
6
7
0%
0%
0%
6%
12%
7%
22%
32%
13%
8%
0% 20% 40% 60%
1
2
3
4
5
6
7
0%
1%
1%
6%
8%
8%
26%
28%
19%
3%
0% 20% 40% 60%
1
2
3
4
5
6
7
0%
0%
0%
5%
5%
10%
29%
27%
22%
2%
0% 20% 40% 60%
1
2
3
4
5
6
7
21%
54%
25%
22%
54%
24%
24%
56%
20%
Notice how evenly matched the
distributions are
Entropy Level = Highly Engaged
Banking Sector
Level 7
Level 6
Level 5
Level 4
Level 3
Level 2
Level 1
Personal Values Current Culture Values Desired Culture Values
IRS (P)= 6-4-0 | IRS (L)= 0-0-0 IROS (P)= 2-2-5-1 | IROS (L)= 0-0-0-0 IROS (P)= 3-3-4-0 | IROS (L)= 0-0-0-0
Matches
PV - CC 2CC - DC 6PV - DC 4
Health Index (PL)
PV: 10-0CC: 10-0DC: 10-0
1. accountability 8576 4(R)
2. honesty 6133 5(I)
3. commitment 5221 5(I)
4. respect 4420 2(R)
5. family 4057 2(R)
6. integrity 4023 5(I)
7. caring 3568 2(R)
8. balance (home/work) 3526 4(I)
9. responsibility 3279 4(I)
10. efficiency 3085 3(I)
1. accountability 5464 4(R)
2. client-driven 4571 6(O)
3. client satisfaction 3486 2(O)
4. brand reputation 2740 3(O)
5. achievement 2491 3(I)
6. teamwork 2408 4(R)
7. environmentalawareness
2372 6(S)
8. commitment 2263 5(I)
9. being the best 2218 3(O)
10. cost-consciousness 2187 3(O)
1. accountability 6987 4(R)
2. balance (home/work) 4183 4(O)
3. client-driven 3864 6(O)
4. client satisfaction 3742 2(O)
5. employee recognition 3297 2(R)
6. honesty 3053 5(I)
7. commitment 2953 5(I)
8. achievement 2809 3(I)
9. teamwork 2744 4(R)
10. employee satisfaction 2687 2(O)
Values Plot Copyright 2011 Barrett Values Centre April 2011
Black Underline = PV & CC Orange = CC & DC P = Positive L = Potentially Limiting I = Individual O = Organizational
Orange = PV, CC & DC Blue = PV & DC (white circle) R = Relationship S = Societal
Banking Sector Organisation with 27,000 Employees
1%
0%
1%
5%
16%
16%
26%
4%
7%
24%
0% 20% 40%
1
2
3
4
5
6
7
3%
3%
5%
5%
11%
20%
13%
14%
6%
20%
0% 20% 40%
1
2
3
4
5
6
7
1%
0%
0%
5%
15%
16%
21%
12%
5%
25%
0% 20% 40%
1
2
3
4
5
6
7
Banking Sector
Values Distribution Copyright 2011 Barrett Values Centre April 2011
CTS = 37-24-39Entropy = 2%
CTS = 33-20-47
Entropy = 11%
CTS = 38-25-37Entropy = 1%
Personal Values
Current Culture Values
Desired Culture Values
11%
50%
39%
20%
33%
47%
17%
46%
37%
C
T
S
Entropy Level = Engaged
Banking Sector Organisation with 27,000 Employees
Less evenly matched
distributions
Shift in culture towards personal consciousness
Small Company
Personal Values
Large Company
Personal Values
Family Respect FamilyCaring Efficiency
CommitmentIntegrityHumour/fun CreativityAccountabilityBalance (home/work)Continuous learning
Making a difference
IntegrityHonestyCommitmentAccountabilityBalance (home/work)Responsibility
Different Personal Values
0%
0%
0%
6%
12%
7%
22%
32%
13%
8%
0% 20% 40% 60%
1
2
3
4
5
6
7
21%
54%
25%
1%
0%
1%
5%
16%
16%
26%
4%
7%
24%
0% 20% 40%
1
2
3
4
5
6
7
11%
50%
39%
Small Company
Desired Culture
Values
0%
0%
0%
5%
5%
10%
29%
27%
22%
2%
0% 20% 40% 60%
1
2
3
4
5
6
7
24%
56%
20%
1%
0%
0%
5%
15%
16%
21%
12%
5%
25%
0% 20% 40%
1
2
3
4
5
6
7
17%
46%
37%
Large Company
Desired Culture
Values
Client satisfactionEmployee satisfactionEmployee recognitionAchievement
Customer satisfactionFinancial stability
AccountabilityBalance (home/workHonestyCommitmentTeamwork
Client-drivenCustomer collaborationEmployee fulfilment
AccountabilityCommitment Continuous improvementHumour/funShared visionTeamwork
Different Desired Cultures
Banking Sector
Level 7
Level 6
Level 5
Level 4
Level 3
Level 2
Level 1
Personal Values Current Culture Values Desired Culture Values
IRS (P)= 6-4-0 | IRS (L)= 0-0-0 IROS (P)= 2-2-5-1 | IROS (L)= 0-0-0-0 IROS (P)= 3-3-4-0 | IROS (L)= 0-0-0-0
Matches
PV - CC 2CC - DC 6PV - DC 4
Health Index (PL)
PV: 10-0CC: 10-0DC: 10-0
1. accountability 8576 4(R)
2. honesty 6133 5(I)
3. commitment 5221 5(I)
4. respect 4420 2(R)
5. family 4057 2(R)
6. integrity 4023 5(I)
7. caring 3568 2(R)
8. balance (home/work) 3526 4(I)
9. responsibility 3279 4(I)
10. efficiency 3085 3(I)
1. accountability 5464 4(R)
2. client-driven 4571 6(O)
3. client satisfaction 3486 2(O)
4. brand reputation 2740 3(O)
5. achievement 2491 3(I)
6. teamwork 2408 4(R)
7. environmentalawareness
2372 6(S)
8. commitment 2263 5(I)
9. being the best 2218 3(O)
10. cost-consciousness 2187 3(O)
1. accountability 6987 4(R)
2. balance (home/work) 4183 4(O)
3. client-driven 3864 6(O)
4. client satisfaction 3742 2(O)
5. employee recognition 3297 2(R)
6. honesty 3053 5(I)
7. commitment 2953 5(I)
8. achievement 2809 3(I)
9. teamwork 2744 4(R)
10. employee satisfaction 2687 2(O)
Values Plot Copyright 2011 Barrett Values Centre April 2011
Black Underline = PV & CC Orange = CC & DC P = Positive L = Potentially Limiting I = Individual O = Organizational
Orange = PV, CC & DC Blue = PV & DC (white circle) R = Relationship S = Societal
Banking Sector (18,000)
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49
Cultural Entropy Evolution
Cultural entropy reduction from 25% to 10% led to improved performance through increased employee engagement, increased revenues, improved productivity, and increase in share price.
25%
19%
17%
14%13% 13%
11% 10%
0%
5%
10%
15%
20%
25%
30%
2005 2006 2007 2008 2009 2010 2011 2012
Cutlural Entropy
Powerful metrics that enable leaders to measure and manage cultures.
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50
Evolution of Number of Survey Participants
8%
25%
38%
51%
67%
73%77%
75%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2005 2006 2007 2008 2009 2010 2011 2012
Percentage of employees voluntarily participating in the values assessment grew significantly each year as people realized that the leaders of the organisation were paying attention to the results of the assessment.
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Revenue Evolution
0%
5%
10%
15%
20%
25%
30%
0
5000
10000
15000
20000
25000
30000
35000
2005 2006 2007 2008 2009 2010 2011 2012
Revenue Cultural Entropy
Annual revenue
increases as cultural
entropy falls.
Global Economic Meltdown
0%
5%
10%
15%
20%
25%
30%
0
200
400
600
800
1000
1200
2005 2006 2007 2008 2009 2010 2011 2012
Revenue per Capita Cultural Entropy
Revenue per capita
increases as cultural
entropy falls.
Productivity Evolution
Global Economic Meltdown
0%
5%
10%
15%
20%
25%
30%
0
5000
10000
15000
20000
2005 2006 2007 2008 2009 2010 2011 2012
Share Price Cutlural Entropy
Share price (cents)
increases as cultural entropy
falls.
Share Price Evolution
Global Economic Meltdown
Powerful metrics that enable leaders to measure and manage cultures.
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54
For More Information
www.valuescentre.com
www.richardbarrett.net
To get a copy of this presentation go to:
http://www.slideshare.net/BarrettValues
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