Bigger is not better
We all know it and it’s been researched and proven many times: Increasing employee engagement has a direct and positive impact on a company’s bottom line.
Engaged employees are more productive, have less absenteeism, and create more engaged customers.
In a growing or larger organisation, this proves to be a challenge. Growing organisations seem to eventually lose the qualities that led to that growth.
In the chart below, you Gallup’s conclusions on engagement as a function of organisational size.
Gallup’s research shows that engagement is significantly higher in organisations with up to 25 employees and consistently low in larger organisations.
As a company grows, the human dimension seems to lose its weight.
How BSO grew by staying small
Eckart Wintzen already knew this risk of larger organizations. In his book “Eckart’s Notes” he describes the strategy, philosophy and concept he used to develop his software company BSO into the largest and most popular IT company in the Netherlands.
His concept was based on growth, development and cell division. When a “cell” had more than 50 employees, preparations for a cell division were set in motion. A new director was appointed from within the company, and two cells, each with about 30 employees, continued.
According to Wintzen, this model works because it gives people responsibility. In his organisation, there are no staff departments because the cells organize their business themselves. Overarching matters, such as house style and PR, are handled from a small head office.
His concept encouraged entrepreneurship, increased decision-making and adaptability, and cultivated the human dimension. He was far ahead of his time.
The human dimension is super relevant
Why is this human dimension so relevant? You already read about how engagement affects the bottom line and the impact of company size on engagement. Smaller seems to be better.
From another angle: An organisation built of highly autonomous cells can more easily adapt to changing circumstances.
This is very relevant in a world that is changing rapidly. How fast?
In 2014, Constellation Research looked at a simple metric to indicate the increased rate of change: the additions and departures in the S&P 500 Index. This index follows the 500 largest U.S. companies as measured by market capitalization. In 1958, companies had been in this index for an average of 61 years. By 1980, that number had dropped sharply to 25 years. To drop further to 18 years in 2011. Researchers estimate that three-quarters (!) of today’s companies in the S&P 500 will have disappeared from the top 500 by 2027.
There is still little research on the relationship between agility and engagement. We assume that an organisation with more engaged employees is able to recognise changing circumstances earlier and adapt to them more easily and quickly.
Fortunately, the human dimension is getting more attention. Each year, Deloitte’s Human Capital group surveys thousands of people about their engagement with work organisation. CEOs, HR managers, other executives and senior managers. They publish the results in their report “Human Capital Trends”.
In 2021 ” The social enterprise in a world disrupted ” they describe how organisations are making 5 main moves to increase their human factor:
- Focus on well-being in organizing work.
- Increasing autonomy and choice.
- Blending people and technology in “super teams”.
- Monitoring HR strategy.
- HR as an accelerator for new ways of working.
1. Focus on well-being
Decision makers have long been aware of the importance of employee well-being, but the Covid19 pandemic has further highlighted its importance. In 2020, 80% of respondents said that well-being was important to very important to the success of their organisation.
Researchers find that employers are much more concerned about welfare than employees. When asked what they hope to achieve by redesigning the way they work, well-being is not yet in the top 10 for employers. For employees, it is a top three goal.
Check out the full report for best practices on increasing well-being at the company, team and individual levels.
2. Autonomy and freedom of choice
The pandemic has made it clear that people who are given the opportunity to have more influence over the content of their tasks and the way they achieve their outcomes make a much greater contribution.
Deloitte argues that offering autonomy, responsibility and choice delivers more than the usual ‘prescribed’ approach. Organisations with employees who experience autonomy and freedom are better able to respond to changing professionals than organisations that work programmatically to train designed skills.
“The best way to unlock talent potential is to offer more autonomy and freedom of choice.”
3. Blending people & technology in “superteams”
The last few months have clearly shown how much work people can do together. “‘Super teams’ are emerging. Teams where people can get a lot done in a human way using effective technology.
A third of respondents said the use of new technology was essential to reshape work (see image).
Researchers argue that these super teams allow organisations to make work more human. Using technology to enable teams to learn, create and perform better.
4. Monitoring HR strategy
The pandemic has made it painfully clear that managing HR strategy and policy based on historical Key Performance Indicators s is severely limiting when dealing with big changes.
It means t
hat we are entering a world where it is essential that organisations use their insights not to improve old patterns of working, but to find new ways of doing things.
Here on the left you will find a series of questions that can be used to look at the potential of teams and their future ‘readiness’.
In the full report, you will also find such a questionnaire for the broader talent ecosystem, including internal mobility, supplier talent and partner talent.
5. HR as an accelerator for new ways of working
Over the past few months, HR teams have been running at full speed. Work suddenly had to be done from home as much as possible. Now that things are slowly but surely getting “back to the grind”, HR has the chance to use its new and improved position to reshape the way work is done. So that employees can make better use of their time and talent and deliver better results for the organisation.
Deloitte suggests, or rather advises HR departments to use their strengthened position to turn visions of new ways of working into actual architecture. In this way, ideas and images should be transformed into concrete steps so that organisations can flourish again.
The report provides an inspiring path from “surviving” to “thriving” via 3 clear steps.
The full Deloitte report can be found here: The social enterprise in a world disrupted