First, Break All the Rules: What the World's Greatest Managers Do Differently

by Gallup Press

Just 13% of the world’s workers — and roughly one-third in the U.S. — are engaged at work. Over the past 1½ decades, the percentage of engaged workers has barely budged.

The performance of elite organizations — those that engage nine employees for every actively disengaged employee — far surpasses that of their peers. This didn’t happen by accident. These companies did something different and intentional: They developed a critical mass of great managers who look out for the organization’s best interests while simultaneously improving the lives of the people they manage.

Engaged workers view the world differently than disengaged workers do because they have managers who develop their strengths rather than fixate on their weaknesses. The insights from the study of great managers provide a lens into how your company can keep your best performers, engage your customers, improve performance and profitability — and ultimately improve the economy through authentic job growth.

The greatest managers in the world do not have much in common. They are different sexes, races and ages. They employ vastly different styles and focus on different goals. But despite their differences, these great managers do share one thing: Before they do anything else, they first break all the rules of conventional wisdom.

Great managers are revolutionaries, although few would use that word to describe themselves. This book will take you inside the minds of these managers to explain why they have toppled conventional wisdom and reveal the new truths they have forged in its place.

great managers do not share a standardized style. Rather, our purpose is to help you capitalize on your own style by showing you how to incorporate the revolutionary insights shared by great managers everywhere.

Our research yielded many discoveries, but the most powerful was this: Talented employees need great managers. The talented employee may join a company because of its charismatic leaders, its generous benefits and its world-class training programs, but how long that employee stays and how productive he is while he is there is determined by his relationship with his immediate supervisor.

“How do the world’s greatest managers find, focus and keep talented employees?”

Some of these managers were in leadership positions. Some were midlevel managers. Some were front-line supervisors. But all of them had one or more employees reporting to them. We focused our analysis on managers who excelled at turning the talent of their employees into performance. Despite their obvious differences in style, we wanted to discover what, if anything, these great managers had in common.

Conventional wisdom is conventional for a reason: It is easier. It is easier to believe that each employee possesses unlimited potential. It is easier to imagine that the best way to help an employee is by fixing his weaknesses. It is easier to “do unto others as you would be done unto.” It is easier to treat everyone the same and so avoid charges of favoritism. Conventional wisdom is comfortingly, seductively easy.

This book gives voice to 1 million employees and 80,000 managers. While these interviews ground the book in the real world, their sheer number can be overwhelming. It is hard to imagine what one talented employee or one great manager sounds like. The following excerpt, from a single interview, captures something of both the tone and the content of our in-depth interviews.

GALLUP: Do you have a secret to building great teams? MICHAEL: No, I don’t think there is a secret. I think the best a manager can do is to make each person comfortable with who they are. Look, we all have insecurities. Wouldn’t it be great if, at work, we didn’t have to confront our insecurities all the time?

I tried to create an environment where they were encouraged to be more of who they already were. As long as they didn’t stomp on each other and as long as they satisfied the customers, I didn’t care that they were all so different.

GALLUP: What do you think of the statement “Familiarity breeds contempt”? MICHAEL: It’s wrong. How can you manage people if you don’t know them — their style, their motivation, their personal situation? I don’t think you can.

Because everyone is different. I was telling you about Gary before, how great an employee he was. But I fired him twice. A couple of times, his joking around went too far, and he really jerked my chain. I really liked him, but I had to fire him. Our relationship would have been ruined if I hadn’t put my foot down and said, “Don’t come in on Monday.” After each time, he learned a little bit more about himself and his values, so I hired him back both times. I think he’s a better person because of what I did.

GALLUP: You’ve been managing now for 15 years. If you were going to give any advice to a new manager, what would it be? MICHAEL: I am not an expert at this, you know. I’m still learning. GALLUP: That’s fine. Just tell us a couple of the ideas that have helped you over the years. MICHAEL: Well … I suppose the first would be: Pick the right people. If you do, it makes everything else so much easier. And once you’ve picked them, trust them. Everyone here knows that the till is open.

If you expect the best of people, they’ll give you the best. I’ve rarely been let down. And when someone has let me down, I don’t think it is right to punish those who haven’t by creating some new rule or policy.

Never pass the buck. Never say, “I think this is a crazy idea, but corporate insists.” Passing the buck may make your little world easy, but the organism as a whole — sorry, the organization as a whole — will be weakened. So in the long run, you are actually making your life worse.

MICHAEL: Maybe just this: A manager has got to remember that he is on stage every day. His people are watching him. Everything he does, everything he says, and the way he says it, sends off clues to his employees. These clues affect performance. So never forget you are on that stage.

Like you, we know that change is a fact of life. We know that the business climate is in permanent flux and that different approaches to managing people wax and wane. However, in listening to managers like Michael and the employees they manage, we were searching for that which does not change. What will talented employees always need? What will great managers always do to turn talent into performance? What are the enduring secrets to finding, focusing and keeping talented employees?

A similar drama is playing out in today’s business world. Many companies know that their ability to find and keep talented employees is vital to their sustained success, but they have no way of knowing whether or not they are effective at doing this.

the only way to generate enduring profits is to begin by building the kind of work environment that attracts, focuses and keeps talented employees. It is a convincing case.

Over the last 20 years, most managers have come to realize that their competitiveness depends on being able to find and keep top talent in every role.

The truth is, no one really knows. Why? Because even though every great manager and every great company realize how important it is, they still haven’t devised an accurate way to measure a manager’s or a company’s ability to find, focus and keep talented people.

the most valuable aspects of jobs are now, as Thomas Stewart describes in Intellectual Capital, “the most essentially human tasks: sensing, judging, creating, and building relationships.” This means that a great deal of a company’s value now lies “between the ears of its employees.” And this means that when someone leaves a company, he takes his value with him — more often than not, straight to the competition.

Today more than ever before, if a company is bleeding people, it is bleeding value. Investors are frequently stunned by this discovery. They know that their current measuring sticks do a very poor job of capturing all sources of a company’s value.

“How can you measure human capital?” What does a strong, vibrant workplace look like?

Everything is measured, every measurement is posted and every measurement has some kind of compensation attached. But he doesn’t offer that up as his secret. He says it is just daily work. Talk about the customer. Highlight the right heroes. Treat people with respect. Listen.

In 1666, Isaac Newton closed the blinds of his house in Cambridge and sat in a darkened room. Outside, the sun shone brightly. Inside, Newton cut a small hole in one of the blinds and placed a glass prism at the entrance. As the sun streamed through the hole, it hit the prism, and a beautiful rainbow fanned out on the wall in front of him. Watching the perfect spectrum of colors playing on his wall, Newton realized that the prism had pried apart the white light, refracting the colors to different degrees. He discovered that white light was, in fact, a mixture of all the other colors in the visible spectrum — from dark red to deepest purple — and that the only way to create white light was to draw all of these different colors together into a single beam.

We wanted our statistical analyses to perform the same trick as Newton’s prism. We wanted them to pry apart strong workplaces to reveal the core. We could then say to managers and companies, “If you can bring all of these core elements together in a single place, then you will have created the kind of workplace that can attract, focus and keep the most talented employees.”

So we took our mountain of data and searched for patterns. Which questions were simply different ways of measuring the same factor? Which were th...

Measuring the strength of a workplace can be simplified to 12 question items, now known as the Q12 items. These 12 items don’t capture everything you may want to know about your workplace, but they do capture the most information and the most important information. They measure the core elements needed to attract, focus and keep the most talented employees. Here they are:

Q01. I know what is expected of me at work. Q02. I have the materials and equipment I need to do my work right. Q03. At work, I have the opportunity to do what I do best every day. Q04. In the last seven days, I have received recognition or praise for doing good work. Q05. My supervisor, or someone at work, seems to care about me as a person. Q06. There is someone at work who encourages my development. Q07. At work, my opinions seem to count. Q08. The mission or purpose of my company makes me feel my job is important. Q09. My associates or fellow employees are committed to doing quality work. Q10. I have a best friend at work. Q11. In the last six months, someone at work has talked to me about my progress. Q12. This last year, I have had opportunities at work to learn and grow.

These 12 items are the simplest and most accurate way to measure the st...

If you can create the kind of environment where employees answer positively to all 12 items, then you have built a great place to work.

First, you probably noticed that many of the items contain an extreme. “I have a best friend at work” or “At work, I have the opportunity to do what I do best every day.” When the items are phrased like this, it is much more difficult to strongly agree (to give a 5 on a scale of 1 to 5). But this is exactly what we wanted. We wanted to find items that would discriminate between the most productive departments and the rest. We discovered that if we removed the extreme language, the item lost much of its power to discriminate.

Second, you may be wondering why there are no items dealing with pay, benefits, senior management or organizational structure. There were initially, but they disappeared during the analysis. This doesn’t mean they are unimportant. It simply means they are equally important to every employee — good, bad and mediocre. Yes, if you are paying 20% below the market average, you may have difficulty attracting people. But bringing your pay and benefits package up to market levels, while a sensible first step, will not take you very far. These kinds of issues are like tickets to the ballpark — they can get you into the game, but they can’t help you win.

We were optimistic that the links would surface. But, truth be told, it was entirely possible that we wouldn’t find them. The links between employee opinion and business unit performance seem inevitable. After all, most of us have probably heard ourselves rattle off such clichés as “Happy employees are more productive” or “If you treat your people right, they will treat your customers right.” Yet in their attempts to prove these statements, researchers have frequently come up empty-handed. In fact, in most studies, if you test 100 employee opinion question items, you will be lucky to find five or six that show a strong relationship to any business outcome.

Since each of these four business outcomes — productivity, profit, retention and customer service — is vitally important to every company, and since the easiest lever for a manager to pull is the employee lever, you would have thought the air would be thick with research examining the links between employee opinion and these four business outcomes. It isn’t. You can track down research examining these links within a particular company — with decidedly mixed results — but never across companies and industries.

First, we saw that employees who responded more positively to the 12 items also worked in business units with higher levels of productivity, profit, retention and customer satisfaction. This demonstrated, for the first time, the link between employee opinion and business unit performance across many different companies. Second, the meta-analysis revealed that employees rated the items differently depending on which business unit they worked for rather than which company. This meant that, for the most part, these 12 opinions were being formed by the employees’ immediate manager rather than by the policies or procedures of the overall company. We had discovered that the manager — not pay, benefits, perks or a charismatic corporate leader — was the critical player in building a strong workplace. The manager was the key.

As you might have expected, business units with more employees who said that they know what is expected of them and that they have the materials and equipment to do their work right were substantially more productive than those with fewer employees endorsing these basic necessities. Nearly all of the 12 items linked to productivity, including those measuring recognition, feeling cared about, individual development and opinions counting. People have always believed there is a direct link between an employee’s opinion and his workgroup’s productivity. Nonetheless, it was good to see the numbers jibe with the theory.

There are so many things one employee can do to affect profit — everything from turning off more lights to negotiating harder on price to avoiding the temptations of the till. Simply put, these actions will happen more often when each employee feels truly engaged through his work’s connection to the organization’s mission or purpose, has an opportunity to do what he does best with colleagues he respects, and has ongoing opportunities to learn and grow.

What about employee retention and customer perceptions of service quality? Employee turnover is costly to businesses and affects the service consistency that customers experience. Retention and customer service both improve when employees have clear expectations, have an opportunity to do what they do best and feel like someone cares about them. Strong relationships among employees within business units means handoffs are seamless — and this translates into excellent customer service.

“Engaged employees will stay longer.” But our research suggests that the link between employee opinion and employee retention is subtler and more specific than this kind of generalization allows. The employee’s immediate manager directly influences the items most consistently linked to turnover. This tells us that people leave managers, not companies. Businesses have thrown so much money at the challenge of keeping good people — in the form of better pay, better perks and better training — when, in the end, turnover is mostly a manager issue. If you have a turnover problem, look first to your managers.

Of the 12, the most powerful items are those that have the most consistent links to multiple business outcomes and that are also the most immediately actionable. Armed with this perspective, we now know that the following six are the most powerful items: Q01. I know what is expected of me at work. Q02. I have the materials and equipment I need to do my work right. Q03. At work, I have the opportunity to do what I do best every day. Q04. In the last seven days, I have received recognition or praise for doing good work. Q05. My supervisor, or someone at work, seems to care about me as a person. Q06. There is someone at work who encourages my development.

As a manager, if you want to know what you should do to build a strong and productive workplace, securing 5s to these six it...

your immediate manager is more important. She defines and pervades your work environment. If she sets clear expectations, knows you, trusts you and invests in you, then you can forgive the company its lack of a profit-sharing program. But if your relationship with your manager is fractured, then no amount of in-chair massaging or company-sponsored dog walking will persuade you to stay and perform. It is better to work for a great manager in an old-fashioned company than for a terrible manager in a company offering an enlightened, employee-focused culture.

employees don’t put their faith in the myths of “great companies” or “great leaders.” For employees, there are only managers: great ones, poor ones and many in between. Perhaps the best thing any leader can do to drive the whole company toward greatness is first, hold each manager accountable for how his employees respond to these 12 items, and second, help each manager know what actions to take to deserve “strongly agree” responses from his employees.

On the brighter side, however, these results revealed that this company was blessed with some truly exemplary managers. These managers had built productive businesses by engaging the talents and passions of their people. In its quest to attract productive employees, this company could now stop hunting for the magical central fix. Instead, it could find out what its newly highlighted cadre of brilliant managers was doing and then build its company culture around this blueprint. It could try to hire more like its best. It could take the ideas of its best and multiply them companywide. It could redesign training programs based on the practices of its best.

All it would have to do is learn from its own best.