How Executive Coaching Forwards Profit and Purpose

Executive Coaching

The business improvement market thrives today. Through books, online programs, real-time seminars and other employee education plans, you can learn about effective leadership, try to increase employee motivation and productivity, and supposedly raise your profit margin in countless ways. The market for these products is ever-renewing for a reason: most of these attempts fail, sending number-crunching executives scrambling to find the next magic bullet.

The reason so many of these changes fail to take root is the same reason employees aren’t happy at their jobs: they’re external rewards, extrinsically-based. Just as money doesn’t work as a motivator for employees; programs geared simply around increasing profit and productivity slip off the organic machinery. Because that’s what companies are: organic production centers. They’re more than assembly lines and statistics; they’re organizations made up of people, a collective of beings with hopes and fears, drives and emotions, beliefs and potentials. People don’t fit into formulas as neatly as numbers do. Abstract goals from the head, or top of the company, don’t often relate to or inspire the heart, the people that make up the business.

Corporate culture has been the focus of countless research studies and how-to programs but the measure of their success can be seen in mental health statistics.

The World Health Organization (WHO) reports that depression is the leading cause of disability in the world today and by 2020, depression will take second place in global DALYs. DALYs stands for Disability Adjusted Life Years and is “the sum of years of potential lost due to premature mortality and the years of productive life lost due to disability.”

It is estimated that work-related stress causes 100 million lost workdays every year and that 50-75 percent of all disease is related to stress. Back in 1997, a long-term study by an American corporation traced 60 percent of work absences to psychological problems due to job stress. Job stress affects every age, gender and race. It affects everyone from call operators, clerks and delivery persons to managers, supervisors and CEOs.

Job stress is not the everyday and even necessary stress we encounter: it’s not about difficulty or challenge says the Centers for Disease Control and Prevention (CDC). Challenge is a necessary part of work. Challenge stimulates and motivates and meeting challenges is extremely satisfying. The CDC defines job stress as “the harmful physical and emotional responses that occur when the requirements of the job do not match the capabilities, resources, or needs of the worker.”

Subha Imtiaz and Shakil Ahmad of the Pakistan Institute of Information Technology report that job stress is rising at alarming rates and results in low performance, decreased productivity, and reduced revenue, along with increasing rates of alcoholism, hypertension and many other health problems. Back in 1992 the United Nations called job stress “The 20th Century Disease” and WHO says job stress has become a world-wide epidemic.

Job Stress and Health

A St. Paul Fire and Marine Insurance Company study found that work problems are more strongly linked with health complaints than any other life stressor, including family and financial problems.
The Journal of Occupational and Environmental Medicine reports that health care expenditures rise by 50 percent when workers are highly stressed.

Work Stress and Environment

The work environment? A 2000 survey conducted by Integra found that:

  • 65 percent of employees reported difficulties in the workplace because of work stress.
     
  • 10 percent of workers say that stress-related problems have major effects and 10 percent claim physical violence has occurred at work because of work stress.
     
  • 42 percent of employees reported that verbal abuse and yelling is common at work.
     
  • 1 in 4 employees have been driven to tears because of job stress.

Dissatisfaction and Profit

Job stress lowers motivation and increases corporate costs. These costs are incurred through accidents, absenteeism, employee turnover, lowered productivity, workers compensation bills and direct payments for insurance, legal and medical fees.

  • Absenteeism costs American companies $602 per year per employee. Large corporations in the US lose about $3.5 million annually because of absenteeism.
     
  • Job turnover is very expensive and 40 percent of turnover is related to stress. Twenty years ago the Xerox Company estimated that it cost them $1.5 million to replace a top executive. It costs $3,000-$13,000 to replace the average employee.
     
  • Work stress contributes to 60-80 percent of accidents on the job.
     
  • Workers compensation claims for mental stress increased by 700 percent over eight years in California and such insurance premiums are bankrupting the system in many states in the US. California paid $1 billion for mental stress claims and resultant legal and medical fees in 1987.

Imtiaz and Ahmad report that increasing acquisitions, economic interdependence and mergers in business due to globalization and technology has increased time pressures, work demands, role conflicts, insufficient work environments and problematic relationships. The researchers found that 77 percent of employees in the Twin Cities of Pakistan report constant stress during work every day for a full year.

In a 2000 Gallup Poll, 80 percent of workers reported feeling job stress and almost 50 percent reported that they need help with managing stress. A study published in the Journal of Applied Psychology found that stress management and prevention reduced malpractice claims in hospitals by 70 percent and medical errors were halved.

Foundation Transformation

Employees want to work well. They want their work to be fulfilling. We were all born to contribute to life, not just consume and not just to be producers of profit. People need more reason than money to take their place on the wheel. The “organic machine” needs a very different kind of oiling. Profit follows passion. Productivity follows commitment. Commitment follows purpose. And people need relationships rather than monetary rewards, a sense of mastery rather than checking off corporate goals.

Your company doesn’t need a manual to increase motivation and productivity: it needs passion and purpose. Too many companies write up flowery mission statements that have no basis in their everyday reality. Too many businesses invest in leadership courses that churn out stereotypical executives rather than inspiring and transformative leaders. And too little time is spent on developing relationships and collaborative environments for employees to thrive and progress in. How-to’s are easy. It’s the foundation that needs the real work, the core of the business and the hearts of each person involved. Transformational executive coaching prepares the soil so that any improvement program you then apply can take root.

More Than Profit: A Global Trend

Douglas LaBier, Director of the Center for Progressive Development, says businesses are experiencing a “social psychosis” resulting from a rapidly changing world and changes in values. There’s a revolution going on in terms of long-standing business ideals about profit and self-interest and the growing realization of our interconnectedness and need to contribute to the common good. More than ever before, the personal is the political and our paychecks can’t be divorced from our personal values. Even as consumerism spreads across the globe, so too is personal success coming to mean more than how much we can acquire. Harvard Business Review contributor Umair Haque describes this foundational change as “the new principles of a new economy, built around stewardship, trusteeship, guardianship, leadership, partnership…” and author of What Would Google Do? Jeff Jarvis calls this transformation “The Great Restructuring” of economy and society.

Motivation

Executive coach Eleanor Chin says that instead of asking how we can motivate employees, we should be asking what environments are conducive to motivation. Do employees feel challenged? Interested? Valued? Are they supported? Can they influence the work and how it’s done? Do they believe in the company and its purported mission?

The hardest-working employee doesn’t put in overtime because of pay bonuses. The happiest employee isn’t happy because she achieves meaningless goals consistently. And the leader that inspires does so because his or her values line up with their work and they’re able to share this passion with others. True commitment comes from the inside out and many companies are still lost in the for-profit mentality.
Intrinsic motivation is an inherent human drive. We’re all born with the desire to learn and master our environment. Intrinsic motivation is what drives a toddler’s first steps and what drives all of us to practice any skill or pursue any interest. Studies have shown that students that perform for external rewards such as grades, money or praise fail to sustain such successes later in life. Their natural drives were replaced with systems of extrinsic motivation. Students that love learning for its own sake thrive throughout their lives.

Motivation researcher Edward Deci found that positive feedback is more motivating than a pay bonus. Why? If this feedback addresses the person’s qualities and behaviors rather than results, it tends to improve sense of competency, confidence and self-esteem. Such specific praise feeds our innate desire to create and produce.

Employee passion is ignited by meaningful work, collaboration, fairness, autonomy, recognition, growth, connectedness with leaders and connectedness with co-workers. Profit grows from passion.

Self Discovery is Key

The most successful businessmen in history became so because of identifying their purpose and mission in life. Henry Ford revolutionized industry when he combined the assembly belt and the conveyor belt and thought of his workers as his customers. His purpose? To give every person the ability to own a car. The success of Bill Gates didn’t come from a desire to be one of the richest people on the planet. This occurred because he wanted to make the Internet available to everyone.

A business can only be successful today if it has a greater purpose than making money. An organization is only as healthy as its individual members. And a company’s values must be reflected, in some manner, in the heart of every employee.

The foundation of such a value system lies not only in businesses redefining their purpose: it depends upon each member uncovering their true personal values, their unique talents and finding that medium to express their own mission in life. Businesses should focus on employee self-discovery rather than forcing values or mission goals on workers says Ohio State University Professor Steven Reiss.

Reiss explains that creating a team requires mutual respect for individual priorities, talents and values. He praises consultant Regina Hock who assesses the fundamental motives, needs and values of team members and then uses relational techniques to teach mutual respect. It is the understanding of others that improves relationships and fosters collaboration.

Professor of Leadership and Organizational Psychology Ronald Riggio says that you can’t understand others until you first understand yourself. Executives and other employees need self-insight, self-regulation and self-identity in order to contribute to an organization’s success.

Executive coaching can help employees identify the what, how and why of their every day interactions and work and help them to see how they affect the people around them. Increasing emotional intelligence helps leaders and workers break away from negative habits and ways of interacting that worsen relations at work. Such emotional awareness can help all company employees better control their behavior and impulses.  A 2008 study reported that a leader’s emotional intelligence contributes to 70 percent of an employee’s perception of their work environment. And defining self-identity can help executives and other employees align their lives to their work, strike the proper work/life balance and make work truly meaningful and satisfying.

According to business professor Charles Millick, organizations need to consider their employees as “human capital worthy of nurture, trust and respect” rather than “mere cogs in the machine or links in the bureaucratic process.” The intangible reward such a view can add represents 75 percent of a company’s assets Millick states and depends upon a better understanding of employee needs. The professor stresses that businesses need to work towards happiness in the workplace in order to thrive today, that personal and professional fulfillment is necessary.

“Happiness can be defined as the positive conscious and emotional experience that accompanies or stems from achieving one’s values and goals or exercising one’s individual human potentialities, including talents, abilities, and virtues. In other words, happiness results from personal flourishing.”

~E.W. Younkins

Driving Forces in the Middle East

Emirates 24/7 reporter Shuchita Kapur writes that Middle East companies need to look beyond pay-packages for better employee results. BAC Middle East manager Cliff Single told Kapur: “An excellent compensation package will help you to initially attract better employees, but retaining them has far more to do with management style and company culture. There is a saying that ‘people leave managers not companies,’” Single said. “The nature and quality of an employee’s relationships with their colleagues plays a major role in their job satisfaction and engagement.”

A Dubai-based Operations Director agrees. “In general, money and benefits do not make an employee loyal,” says Konstantina Sakellariou. Its company culture, recognition and opportunities for growth that breed commitment Sakelliariou added.

Pathway Resourcing manager Hasnain Qazi said: “Recognition for effort and intention, as opposed to just rewarding results, is the way to go,” and adds that rapport among staff is also important.

A motivation poll conducted by Bayt.com found these motivation drivers among UAE workers: opportunities for long-term growth, company brand and reputation, manager relations, training and development opportunities, colleagues and environment and nature of daily responsibilities. Three in four employees stressed the importance of work-life balance.

Sources

  • The American Institute of Stress: Job Stress http://www.stress.org/job.htm
  • World Health Organization: Depression http://www.who.int/mental_health/management/depression/definition/en/
  • WBI Con Pro: Impact of Stress on Employee Productivity, Performance and Turnover; an Important Managerial Issue http://www.wbiconpro.com/25.Subha.pdf
  • Centers for Disease Control and Prevention: Stress…At Work http://www.cdc.gov/niosh/docs/99-101/
  • Positive Psychology News: Motivation at Work http://positivepsychologynews.com/news/eleanor-chin/200904041761
  • Ken Blanchard: Employee Passion http://www.kenblanchard.com/img/pub/employee_passion.pdf
  • Psychology Today: Self-Discovery Key to Team Building http://www.psychologytoday.com/blog/who-we-are/201011/self-discovery-key-team-building
  • Psychology Today: Leadership Is a Journey: Steps to Your Personal Leader Development http://www.psychologytoday.com/blog/cutting-edge-leadership/201101/leadership-is-journey-steps-your-personal-leader-development
  • Leadership Performance: Emotional Intelligence – A Leadership Mentoring and Coaching Performance Framework  http://leadershipperformance.blogspot.com/2009/12/emotional-intelligence-leadership.html
  • The Journal of Value- Based Leadership: Values-Based Leadership and Happiness: Enlightened Leadership Improves the Return on People http://www.valuesbasedleadershipjournal.com/issues/vol2issue2/happiness.php
  • Emirates 24/7: A Good Salary Does Not Make Staff Loyal: Experts http://www.emirates247.com/news/a-good-salary-does-not-make-staff-loyal-experts-2010-10-27-1.309549