Bridging the Connection Gap Building Stronger Relationships with

Bridging the Connection Gap: Building Stronger Relationships with Employees

Agenda § Research findings and insights § Practical application – case study § Discussion and Q&A

Overview § Consumer confidence continues to hover around historically low levels § Renewed concern that a “double dip” recession is looming § Unemployment stands at 9. 1 percent, virtually unchanged from a year ago; 6 million people have been unemployed more than 27 months § Those employed at their current company at least one year are still optimistic about and feel connected to their company § There is a strong sense employers are not reciprocating § There is a gap driven by perceived poor performance by the CEO and executive team

Employee Engagement at a Glance Employee Confidence 81. 4 Employee Connection 83. 5 Employer Connection 63. 3 Change from 2009 -2. 9 -3. 2 -2. 6

Employee Confidence 81. 4 Employee Confidence = % right direction & % expect to be better + about the same Why do employees feel confident about the direction of their company? Significant elements Beta The executive team in my company supports and lives our values. . 390 My company’s executive team clearly explains the direction the company is heading. . 366 My company’s executive team shares positive and negative news openly. . 323 My supervisor responds to my feedback. . 107 r 2 =. 256

Employee Connection 83. 5 Employee Connection = loyal to company & personally motivated to help company succeed Why do employees feel connected to their company? Significant elements Beta The executive team in my company supports and lives our values. . 218 In my company, I am comfortable sharing information and ideas. . 172 My company’s executive team exemplifies authentic, open and honest communication. . 149 I have all the information that is necessary for me to do my job. . 138 r 2 =. 315

Employer Connection What are employees seeking from their company? Employer Connection 63. 3 Employer Connection = company values its employees and is loyal to employees Significant elements Beta The executive team in my company supports and lives our values. . 282 My company’s executive team exemplifies authentic, open and honest communication. . 189 In my company, I am comfortable sharing information and ideas. . 156 My company’s executive team clearly explains the reasons behind decisions. . 156 My company’s values are clearly aligned with our business strategy. . 094 I have all the information that is necessary for me to do my job. . 094 r 2 =. 661

The Connection Gap Employee Connection 83. 5 Employer Connection 63. 3 The Gap 20. 2 What explains the gap? Significant elements Beta The executive team in my company supports and lives our values. -. 287 My company’s executive team exemplifies authentic, open and honest communication. -. 208 I receive consistent information from all the leaders in my company. -. 144 r 2 =. 337

CEO Performance Rating What impacts this rating? Fair 15% Good 62% Poor 17% Don’t know or refused 6% Significant elements Beta My company’s executive team exemplifies authentic, open and honest communications. . 266 My company’s executive team clearly explains the reasons behind decisions. . 235 My company’s executive team clearly explains the direction the company is heading. . 208 r 2 =. 442

Supervisor Performance Rating What drives this rating? Good 72% Fair 11% Poor 14% Don’t know or refused 3% Significant elements Beta My supervisor provides clear direction and priorities for our work group. . 516 My supervisor responds to my feedback. . 295 r 2 =. 592

The Performance Gap Supervisor Good Job 72% CEO Good Job 62% Supervisor. CEO Job Rating Gap 10 This is a significant gap between CEO and supervisor College graduates, $150 K+ earners, and management employees all rate CEO and supervisor equally positively Big rating gap among those with some college education or less as supervisors are rated much more positively

Company Values 2010 2009 Mean My company has a set of clearly defined values that drives all of our behavior 58% 19% 77% 7. 5 My company’s values are clearly aligned with our business strategy 55% 19% 74% 7. 3 7. 7 Note the significantly lower agreement between 2009 and 2010 on the executive team supporting and living corporate values. Biggest gaps in agreement occur between: • Management and non-management • Union and non-union • College educated and high school or The executive team in my company supports and lives our values 45% 21% 66% less education 6. 8 7. 4 [n=495] The executive team in my company communicates regularly about our company values [n=495] • $150 K+ earners and those earning less than $100 K 47% Strongly Agree 21% 68% Agree 6. 8 6. 9 Indicates significant difference from 2009 There is also directionally less agreement that the company’s values are aligned with the business strategy

Communication Importance & Performance My supervisor provides clear direction and priorities for our work group Opportunity My company's executive team clearly explains the direction the company is heading Importance My company's executive team shares positive and negative news openly Performance My company's executive team clearly explains the reasons behind decisions My supervisor takes the time to listen to the opinions and ideas of others My supervisor responds to my feedback My company's executive team exemplifies authentic, open and honest communication I receive consistent information from all the leaders in my company Core strengths I have all the information that is necessary for me to do my job In my company, I am comfortable sharing information and ideas

Implications for Senior Management • • • Share the vision Be an ambassador Encourage feedback Take care of immediate supervisors Live the company values

Setting the Scene – The Rust Belt • $9 B manufacturer of consumer durable goods • Largest employer in a mid-size town • Increasing global competition • Transforming operations and labor contracts • Performance plummets: – Line sabotage – Single digit First Time Yield – Double digit increase in Lost Time Incidents – Only 19% of employees feel “the company is moving in the right direction”

Start With Listening What We Heard – Separate Realities “I’m trying to keep the doors open. We’re lucky to have jobs. Why won’t you just do what I say? ” “Nothing improves, no matter how hard I work. I’m surrounded by numbers – I don’t know what they mean. I just know that I’m screwing up. ”

Application: Share the Vision Leaders Provide Context & Framing It’s time to get back to the basics—safety and quality. We all recognize the need to change. Let’s take it on one step at a time and rack up some wins. Today, customers like what we do. We need to use our expertise and know how to bring them back again. We need to get things back on track. It starts with your knowledge and experience. We need to listen to everyone. It’s time to move forward. We have the team. Let’s work together to stabilize and build our processes.

Application: Be An Ambassador Communication is a Leadership Competency • Training for senior leaders and front-line supervisors • Peer coaching system • Introduction of a new plant communication infrastructure

Application: Encourage Feedback Communication Happens – With or Without Us § Streamlined weekly goals setting process § Redesigned communication infrastructure: § Quarterly all-staff meetings § Monthly newsletter § Weekly goals setting with plant management team § New visual factory system § Daily hot sheets and supervisor updates § Daily shift briefings and frontline problem-solving sessions § Daily senior leader “sponsors”

Application: Live the Values Communicate Through Words & Actions New incentive program emphasizes Simplicity Safety Optimism Innovation Excellence Teamwork Quality Customer Service Speed Integrity Respect Continuous Improvement

Results – Within 2 Months Safety 29% decrease in Lost Time Incidents Quality 600% increase in First Time Yield Production Pieces Packed/Day jumps from 70 to 420 average Morale More than half of employees feel “the company is moving in the right direction” (up from 19%)

Takeaways • Share the vision: employees who know where the company is going and how they can help get the company there are by nature more engaged with their company • Be an ambassador: authentic, open and honest communication seems to be missing for many employees • Encourage feedback: it is important for senior leaders to solicit feedback as well as communicate what is happening; employees indicate that being able to freely share information and ideas is important in making them feel more connected to the organization • Take care of immediate supervisors: middle managers are perceived to be performing at a higher level than senior managers and appear to be the glue holding many organizations together • Live the company values: supporting and living the company values is a key driver in improving employee confidence and closing the employee/employer connection gap

Thank you! Bill Dalbec Morgan Marzec www. apcoworldwide. com www. gagenmacdonald. com www. letgoandlead. com t. (202) 778 -1032 f. (202) 466 -6002 bdalbec@apcoworldwide. com t. (312) 282 -3321 f. (312) 640 -1901 m. marzec@gagenmac. com