Investing in Emotional Economics

1 October 2008

Are you too busy to have important conversations with your people? Anthony Landale examines how Skandia is making motivational conversations a priority for managers and the business.

Too many managers are much too busy. This may be an understandable response to the immense pressure they are under but it’s unacceptable. Why? Because the biggest single factor in delivering improved performance lies in a manager paying more attention to the relationships they have with their direct reports; and when managers are too busy they start to compromise the time, energy and attention they give to their people.

Some people have started to call this ‘emotional economics’. The whole tenor of such an argument may have hard rationalists spitting teeth but here’s the truth: there is money to be made in emotion, and leading businesses are waking up to the fact.

The rationale for emotional economics make sense. Performance levels rise when people are engaged with their work and when they care about what they are doing. That’s what has made Dan Goleman, author of Emotional Intelligence, so relevant. His conclusions that human competencies such as self-awareness, self-discipline, persistence and empathy are of greater consequence in determining the effectiveness of leaders than cold analysis and intellect have massive implications for individuals and organisations alike.

Motivation soars

Investment and pension company Skandia has been testing how much of a difference it makes when managers pay more attention to this human dimension of their role, and especially to the motivational conversations they have. The results are impressive. After a year-long programme, Skandia has seen on average a 50% average increase in motivation when managers started to focus specifically on engaging its people.

"Performance levels rise when people are engaged with their work and when they care about what they are doing."

The pilot that Skandia has been running is based around the implementation of a programme entitled ‘100 Watt Coaching’ run by psychologist Sukhwant Bal, MD of Tools for Leading Change.

The premise of the programme is that when managers are trained to have direct conversations about issues that are important to their people, their performance will consequently improve. To measure this progress, the programme measured people’s motivation at the start of the initiative and then again after 100, 200 and 300 days.

Carla Ginn is an organisation development consultant with Skandia and has been responsible for monitoring and measuring progress on the pilot. "We broke down the overall figures into four sub-sections: commitment, energy, competence and confidence, and there has been a significant increase in each area with a particularly marked increase of 61% in competence and a 56% increase in energy."

The tracking element of this programme is certainly going to be of interest to all companies which want to ensure that investment in people leads to measurable business payback. This is a factor that Bal has built into his programmes as he believes that it is essential that managers buy into this people dimension wholeheartedly.

"Too often consultancies go into organisations, do some great work and then leave," he says. "But when they leave they typically take their knowledge and their insights with them. This is deeply frustrating to the companies they have been working with. To address this it’s become my mission to provide practical and accessible psychological tools for managers around which they can construct powerful conversations with their team members. These tools have to be of immediate benefit and once they’ve been trained managers need to be able to continue to use these tools without the need for more expert help."

Bal’s approach requires managers to have a meeting for 20min every week with their people focusing on their motivation – and while they might agree in principle that this is a good idea they might also wonder where on earth they are going to get the time to have such conversations. Ginn suggests that in a high performance culture such as Skandia there is little choice. Time may be short but a manager’s capability to coach his or her people for improved performance and motivation is where future growth lies.

"Managers who’ve been on this programme know that our business depends to a great extent on the motivation of staff to perform their roles," she says. "That’s where managers can make the difference, by tapping into people’s engagement. The way they do this is by having a series of truthful conversations that help people to connect with what they are trying to achieve. The manager also commits to support the individual in their work and will provide further coaching and development along the way. In this manner the individual gets excited about their own future, brings more energy to work and moves up the performance curve.

"What’s been important for us to recognise in this process is that the focus isn’t on the manager setting hugely ambitious goals, it’s on ensuring that there is some emotional connection from the person between their target or goal. That’s what helps the individual concerned own both their performance and their own motivation."

Shaping the future

Ian Vincent is one of the Skandia customer services managers who participated in the pilot programme. According to Vincent a big part of his learning has been in having conversations with his people that are based around their agenda rather than his.

"My managers have always known that they need their people to be motivated but in the past they probably weren’t focussing their conversations in a way that helped achieve this. The new focus gives them a structure that encourages them to ask people what makes them tick, what inspires them and what support they need going forward. They’ve invested a lot of time in becoming black belts in this approach and the results show it’s worth it. In a very busy environment our volumes of business have increased, staff are being more productive and when I look at the measures I can see that motivation in my team is much higher."

So why don’t managers have these sorts of conversations as a matter of course? Are they really that difficult?

In her book Fierce Conversation, author Susan Scott suggests that people feel there is a risk in having such ‘real’ conversations. This perceived risk is that "I will be known. I will be seen. I will be changed" and it leads to people avoiding one of the most fruitful areas of human interaction.

"Time may be short but a manager's capability to coach his or her people for improved performance and motivation is where future growth lies."

Bal’s approach addresses this by giving people both the training and the frameworks for having such conversations. "The emphasis is on helping managers and their staff get to the truth fast," he says.

According to Bal this may mean a manager opening up to his people, talking about the relationship they have together, questioning the level of competence to deliver the goals being asked or even enquiring into the confidence that the employee has in working outside his/her comfort zone. "Instead of really getting to know their people, too many managers will focus on telling people what to do because it seems easier. But what’s really important for managers is to get to know the agenda of the person in front of them. It’s in what we call ‘lightbulb’ conversations that managers can find out about their people."

Lorren Wyatt, HR director of Skandia UK, is a strong advocate of this approach. "People engage when they get the opportunity to talk about themselves and it’s absolutely relevant that our managers should help their staff to identify any barriers that may be getting in the way of their performance. What I particularly like about the 100 Watt Coaching approach is that it has installed a different sort of conversation that helps people to make speedy changes to their performance.

"Our aim at Skandia is to become a top 100 employer and I believe that this programme will help us to achieve that," he says. "In all the Skandia teams that have adopted this approach we can see the indicators going in the direction we want. Absence and attrition rates are going down and productivity and motivation are going up. People want more of it and when I have the FD knocking on my door wanting his team to go through this training I know that we have discovered something that meets both the people agenda and delivers benefit to the bottom line."

Answering the critics

Some people will never buy into the idea that conversations can make such a difference. There will always be those who prefer to tell and direct rather than engage and empower. But alongside the few refuseniks it appears there are many more that have already started building new relationships and are discovering that with a clear set of tools and a bit of training they can transform their teams.

As Bal concludes, the motivating factor for him in this work is in getting people to turn up to work feel inspired.

"Managers may need to be brave and have more truthful conversations with their people about how they work together – but they will soon find it makes an extraordinary difference. After all what manager wouldn’t want his or her people showing up at work with more confidence, a renewed sense of purpose and more motivation?"