Mark Carney, Bank of Canada governor, recently suggested that companies have "dead money" that they should put to work, increasing innovation, productivity and competitiveness for corporations, thereby creating a stronger economy.
He's right. Corporations do have dead money, but they also have dead staff, and this is also what is really killing productivity in North America. I call this Death of a Workforce.
Death of a workforce
The term Death of a Workforce reflects our review of data from our clients. In the same way that Arthur Miller's Death of a Salesman charts the waning days of a failing salesman, my research has revealed the waning days of an engaged and innovative workforce. Although many corporations will claim their workforces are engaged, or that their engagement numbers are off the charts, neither their productivity nor their innovation measurements reflect these high engagement numbers.
According to business-management analyst Peter Drucker, we shouldn't be surprised. As Carney suggests, current leadership isn't creating the climate for innovative employees. Drucker found that innovation and productivity depend on human perception (cultural transfer), employees' mood (inspiration) and their understanding of the meaning of the organization and their role within the organization (learning from executives vs. leading by gut).
Our clients employ as few as 7,700 employees and as many as a small country. They are located in Canada and the United States. All have asked us to increase their managers' ability to lead through mentoring. In the data below, mentors are senior leaders at the firm while mentees are employee candidates streaming for senior leadership positions within the firm.
Leading by the gut: When asked whether they believed they were a one-person show, at one client we found 90 per cent of mentees and 81 per cent of mentors said no, yet when asked about their own leadership style, 50 per cent of mentees and 56 per cent of mentors said that they adapted a leadership style based on their own personality.
This indicates that people aren't learning from their superiors, and are using their own personalities as barometers for change. Personalities don't develop corporate innovation. Understanding your role in the organization and how it relates to the improvement of the organization is the key to innovation.
With the same client, 96 per cent of mentors and 98 per cent of mentees said they believed they have a good sense of humour, but when asked only about their ability to inspire, 92 per cent of mentors said they believe they inspire people, but only 60 per cent of mentees said they believe they have the ability to inspire, while 30 per cent said they lacked the ability this will hurt innovation, as well. How can you lead when you can't inspire?
Just as Miller's character Willy Loman felt that his son had not reached his potential, employees don't know how to reach theirs. Like Willy, many, managers are questioning their value to the firm or their ability. With the same client we found that 63 per cent of mentors and 56 per cent of mentees had had very poor learning/mentoring experiences with their superiors, which drives the fact that only 7 per cent of mentors and 8 per cent of mentees want to emulate the leadership style of their superiors. These statistics indicated that cultural transfer, i.e. the ability to get buy-in for goals and objectives for the organization is limited to about 30 per cent.
When asked how engaged they felt as employees, 87 per cent of mentees reported they felt very engaged or engaged. When asked whether they were effective at helping their team leaders achieve their goals, only 42 per cent of participants said they were 80 per cent of the time. How can you be an engaged employee if you aren't helping to achieve corporate goals? Are your employees Willy Lomans who just exercise a routine at work?
Interestingly, no matter which client we asked, the answers were relatively the same, representing a deep malaise among workforces. Although this is only the first review of the data for 2012, my team and I were stunned by the similarity of the qualitative answers and the statistics.
What our research has determined is that the underlying problem in business today is that employees are leading by their gut, they are not happy, because they can't inspire their team and they can't transfer culture between older workers and younger workers. Managers feel like an island unto themselves in a corporate sea. They may self-report being engaged, but their walk doesn't match their talk.
Trickle down or trickle in?
Carney was correct: corporations do have dead money, but even worse they have dead staff. Until leaders deal with the death of their workforce they will continue to lose the fight to innovate and be productive, and people like Carney will still be encouraging corporations to invest externally rather than internally to get the economy started again. Trickle-down economics works only when internal economics are sound.
Dr. Mary Donohue is the Founder of the Donohue Mentoring System™. Her third book The Donohue Mentoring System™ is available at Amazon.com.